Property and Asset Division

May
15

Getting a Divorce? Should I Move Out of the Marital Home?

This is a complicated question to answer depending upon the facts of each case.  If you have experienced domestic violence you need to immediately do whatever is necessary to secure you and your child’s safety.  Many times a victim will go to court for a protective order and ask the judge to move the abusive or violent spouse out.  In this situation contact an experienced family law attorney now!

In most cases, absent of violence or risk of abuse, we would not suggest that a spouse move out of the marital residence.

Why is this?  One reason is once you have vacated the residence it may be very difficult to get back in! You have no legal obligation to leave the residence if your name is on the lease or mortgage personally and exclusivity.

Our suggestion to a client might be, to remain in the residence since the person who vacates may still have financial obligations and expenses of the family residence, while paying all expenses on a new residence for themselves. Double expenses are not a desirable result during the divorce process.

The higher wage earning spouse who moves out of the marital home must expect to continue to pay most of the household expenses, including the insurance and mortgage!  What about the personal property and furnishings in the residence?

If an agreement has not been made between the divorcing couple, the moving spouse will generally only be able to leave with personal belongings (clothing & jewelry) until a court rules fairly as to temporary possession.

Secure a court order ASAP to equalize property and household expenses.

By Nacol Law Firm | Property and Asset Division
DETAIL
May
01

For Richer or Poorer, Hire Expert Help to Protect Your Interests in Your Texas Divorce

For better or worse,
For richer or poorer,
Until . . . a divorce is filed.

When there are several zeros at the end of your bank balance, as in $500,000.00; $5,000,000.00 or more, the financial aspects of divorce can be high risk.

Texas divorce laws are the same regarding the division of property whether the money and assets in a marital estate are a lot or a little; however, the courts will inevitably encounter and address more complex issues regarding the property division in a divorce case with substantial financial and business assets.

Texas is a community property state. What does that mean, as a practical matter, when divorce occurs?

1. The law presumes that all property owned by either spouse is community property, meaning that both spouses own an undivided one-half interest.
2. The court cannot divest a spouse of his or her separate property in divorce.

In a very simple explanation: Texas community property is everything earned or acquired during the marriage other than inheritances or gifts. Your paycheck is community property, your rental income is community property, the cars you purchase are community property, retirement funds accumulated during marriage are community property.

At the time of the divorce, the court will make a just and right division of the community property. “Just and right” does not mean 50/50. Often the courts will split the community property equally, but many factors may affect this division including:

1. The spouses’ earning abilities and education.
2. The spouses’ actual earnings.
3. Who has care and primary custody of the children.
4. The value of separate property owned by the spouses. If the wife inherited $3,000,000.00, should the husband be awarded more of the community property?
5. Fault in the break up of the marriage, especially if a cheating spouse spent substantial assets dating or cavorting with others.
6. The debts of the spouses.
7. Tax consequences.

The bigger the marital pocketbook, the bigger the risk to assets in play.

Texas Child Support and High Asset Divorces:

The court also has discretion in setting child support when the parents are wealthy. The Texas Family Code provides guidelines and the guidelines are presumably in the best interest of the child.

The law caps the Texas child support amount guidelines to a percentage of the first $9,200.00 of the paying parent’s earnings. However, the cap is not made of steel. The law is a guideline.

The court has the discretion to order child support in excess of the guidelines based on the children’s best interest which includes an examination of the proven needs of the children. In the case of children growing up in a high-income household, do not expect the court to necessarily limit its consideration to basic food and shelter. The court may consider many factors in setting child support, including the children’s current living standards, such as private education, nannies, medical issues, emotional issues, sports and other extracurricular activities and, in the rare case, a body guard.

When setting child support within a wealthy family undergoing divorce, the court has discretion, based on the evidence, to set order child support above the presumptive amount in the guidelines. The court’s determination is subjective and is reversed by higher courts only if the trial court “abused its discretion,” a high threshold indeed.

With so much at stake, you should hire an experienced family law attorney who can present your case clearly, and persuasively.

DETAIL
Jul
14

Getting a Texas Divorce? Know what Marital Property is Community or Separate

In Texas, Community Property Laws apply in determining the Property Distributions to a wife and husband.  This system is employed to divide the property fairly between the divorcing couple.

What is Separate Property?  Texas Family Law Code, FAM 3.001: A spouse’s separate property consists of:

    1. The property owned or claimed by the spouse before marriage

    1. The property acquired by the spouse during marriage by gift, devise, or descent

  1. The recovery for personal injuries sustained by spouse during marriage, except any recovery for loss of earning capacity during marriage.

The terms “owned and claimed” as used in the Texas Family Code means that where the right to the property accrued before marriage the property would be separate.  Inception of title occurs when a party first has a right of claim to the property by virtue of which title is finally vested.  The existence or nonexistence of the marriage at the time of incipiency of the right of which title finally vests determines whether property is community or separate.  Inception of title occurs when a party first has a right of claim to the property.

Under Texas Constitution, Art. XVI, Section 15, separate property is defined as all property, both real and personal, of a spouse owned or claimed before marriage, and that acquired afterward by gift, devise or descent, shall be the separate property of that spouse; and laws shall be passed more clearly defining the rights of the spouses, in relation to separate  and community property; provided that persons about to marry and spouses, without the intention to defraud pre-existing creditors, may by written instrument from time to time partition between themselves all or part of their property, then existing or to be acquired, or exchange between themselves the community interest of one spouse or future spouse in any property for the community interest of the other spouse or future spouse in other community property then existing or to be acquired, whereupon the portion or interest set aside to each spouse shall be and constitute a part of the separate property and estate of such spouse or future spouse; spouses may also from time to time, by written instrument, agree between themselves that the income or property from all or part of the separate property then owned or which thereafter might be acquired by only one of them, shall be the separate property of that spouse; if one spouse makes a gift of property to the other that gift is presumed to include all income or property which might arise from that gift of property; and spouses may agree in writing that all or part of the separate property owned by either or both of them shall be the spouses’ community property.

What Is Community Property? Texas Family Law Code, FAM 3.002:  Community property consists of the property, other than separate property, acquired by either spouse during the marriage.

Texas Family Code, Section 3.003 states that all property possessed by either spouse during or at the dissolution of the marriage is presumed to be community property and that the degree of proof necessary to establish that property is separate property, rather than community property, is clear and convincing evidence.  Clear and convincing evidence is defined as that measure or degree of proof that will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established.  If property cannot be proved clearly and convincingly to be separate property, then it is deemed to be community property.

The Texas Family Code, Section 7.002, deals with quasi-community property and requires a court divide property wherever the property is situated, if 1) the property was acquired by either spouse while domiciled in another state and the property would have been community property if the spouse who acquired the property had been domiciled in Texas at the time of acquisition; or 2) property was acquired by either spouse in exchange for real or personal property and that property would have been community property if the spouse who acquired the property so exchanged had been domiciled in Texas at the time of the acquisition.

What about Property Acquired during Marriage? Property in which inception of title occurs during marriage is community property unless it is acquired in one of the following manner, in which it becomes separate property of the acquiring spouse:

    1. By gift

    1. By devise or descent

    1. By a partition or exchange agreement or premarital agreement specifying that the asset is separate

    1. As income from separate property made separate as a result of a gift, a premarital agreement or a partition and exchange agreement

    1. By survivorship

    1. In exchange for other separate property

  1. As recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage.

During a divorce, it is important that both parties know what type of property is involved in the divorce and what is separate and community property. This knowledge may determine or influence what each party will receive at the end of the settlement.

By Nacol Law Firm | Property and Asset Division
DETAIL
Jul
05

How To Avoid Major Financial Pitfalls in a Divorce

You are getting divorced!  After the emotional decision is made you must address financial situations impacting the family breakup.

What are the major financial pitfalls of a divorce? Are you prepared to stay on top of all financial problems and decisions in this divorce to strive for a financial win-win situation?

  1. Where’s the liquid cash? Divorce generally never goes as fast as you would like nor do you receive as much as you think you should! If divorce is imminent start saving up money now! You will need to pay divorce expenses and have support for your new household.  There will be many unanticipated costs that may drain you financially.

  • If you don’t have a credit card in your name get one now.  If you share credit with your spouse, close out as many credit cards as possible if he/she can charge on your credit. Even if you don’t use the cards, the account balance will still be owed and both spouses may be legally responsible for the debt.
  1. Not Prepared for this Divorce?  Divorce is a serious change of life event. Get Prepared Now! Timing is all important! When is the best time for you to get divorce?  Make sure your financial situation is good before you take the divorce leap. Need new tires, buy them. Kids need dental work, see the dentist.  Just remember: after the separation, your expenses will be paid by court order and not always be to your liking.

    1. Where are the important divorce financial records? Don’t leave without all your documents that identify what you and your spouse accumulated during your marriage and which can establish the fair market value! Even if you were not in charge of finances while you were married, you must secure copies of all records. You are entitled to your share of financial property and any additional income you find may increase the earnings that calculate child support or spousal maintenance support.  What are you looking for?  At least three years of tax returns, mortgage paper on your home, wills, trusts, bank, credit card, and financial statements, car registrations and titles, insurance policies, and deeds to real estate.  If you have separate property from inheritance or gifts from your family, make sure you have all records of these transactions.  Our blog, Texas Financial Checklist http://dld.bz/dqcej  is a detailed list of items and records needed to have before filing for divorce. A very good item to use for your preparation!

  1. Have you overlooked any Divorce Assets?  If a business is involved a forensic accountant may be hired to look of any signs of additional income or overstated expenses.

  • Hobbies and side businesses that use expensive equipment or generate income needs to carefully be looked out.  Are you entitled to compensation for expenses you paid to get your spouse through school?
  • All assets, big or small can add up. These assets can always be used for trade on something you can use.
  • Your spouse may try to hide assets. By keeping all documents and paystubs to make sure there are not any irregularities, things usually work out fine. Stay honest and reveal your assets.
    1. Do Not Ignore Tax Consequences!  Divorce may or may not create taxable events but you must report it on your tax return. Should you sell the house now to claim the capital gain exclusion? Who should be paying the mortgage until it sells? Should you take your spousal maintenance monthly or in a lump sum? What about retirement funds? An accountant can help to determine the best path for you on these questions.

    1. Passive Observer of your Divorce? NO!  Get control of this process, focus on practical things and work with your future Ex to get this divorce over! You can do this! There is a reason for this divorce and you are the master/mistress of your destiny. Your children need you now to be a responsible parent and wise decision making will save you time and legal fees. Listen to your attorney but you make the decisions!

    1. Is Divorce your survival plan?  Now that you have decided to divorce you must break it to your children. People engaged in a Divorce should be in survival mode.  The person who will be your future “EX” is looking out for themselves and you need to look out for yourself and your children.  YOU must insist within reason on getting what you need and deserve! Emotions and money do not mix!  You must be able to take care of yourself and your family financially so look at all property division decisions very carefully and make good decisions to bring the divorce to a successful conclusion.

    1. Prepare for the worst! When entering into a divorce, prepare yourself for the worst!  If you are prepared for anything, than your fears will not cause you to panic and you will keep control of your situation. Outside of death, divorce is considered one of the worst emotional situations that a human being will ever experience!

  1. How will you support yourself and the kids after divorce? Hopefully this is not a problem, but now would be a good time to get some career counseling at a community college, university or local job center. Having a fulfilling career is lucrative and helps your self-esteem!

  1. Get Good Advice! Decisions you make now will affect the rest of your life.  Find a good, knowledgeable attorney to help you though the rough spots. If you are emotionally a wreck, find a good therapist. If you feel there are hidden assets, hire a forensic accountant. Now is the time to get the best advice you can afford!  You will have to live with your financial decisions for a long time.

DETAIL
Jun
28

Is a Divorce in Your Future? The Time to Prepare your Financials is NOW!

Are you to the point of no return in your marriage?  Nothing left of feelings, just apathy or indifference. Do you feel you must leave this place now or die trying? What about your financial security after the divorce? Divorce is an emotional roller-coaster. How will you take care of your debt, bills, and your children’s needs? 

Time to grab your laptop or pad of paper and start thinking smart about “the first day of the rest of your life. If your “I need a divorce” decision is now made, start work on learning your current family financial situation and what needs to be done to secure your financial security for Post-Divorce life!

Here is a list of some of your most important Financial Information that you need to address before the Start of the Divorce 

  1. What are the Community and Separate Property Laws in Texas?  

Under the Texas Family Code, a spouses separate property consists of 1) the property owned or claimed by the spouse before marriage; 2) the property acquired by the spouse during marriage by gift, devise, or descent, and 3) the recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage.
The terms “owned and claimed” as used in the Texas Family Code mean that where the right to the property accrued before marriage, the property would be separate.  Inception of title occurs when a party first has a right of claim to the property by virtue of which title is finally vested.  The existence or nonexistence of the marriage at the time of incipiency of the right of which title finally vests determines whether property is community or separate.  Inception of title occurs when a party first has a right of claim to the property.
Everything you and your spouse have earned in your marriage except for personal gifts or property from devise or descent will now, absent fault, be divided equally in the divorce. This could make a big difference in your post-divorce financial life! Gather all financial statements: income tax returns, insurance policies, bank statements, Investment Accounts summaries, Retirement Account balances, Bills, anything in your marriage that can show who owns separate assets or what constitutes the community property in this marriage.  

2. DEBT: Deal With it NOW!

Are you and your spouse in a bad financial situation? Do you both have to work to pay the bills or just barely make ends meet?  Now you want to get a divorce and HOW IS THAT GOING TO WORK? How can you be Post Divorce Happily EVER AFTER when you may not even be able to afford a down payment on an apartment?
ORDER A COPY OF YOUR CREDIT REPORT now to see where the damage may exist.  You will be able to see what credit cards, loans, and other debt you all have created. If you and your spouse have be leading “separate lives” for a while, you may be surprised when there is more debt incurred for entertainment you never knew about.
Review this CREDIT REPORT carefully. Find out whether you are a joint owner or just an authorized user. Except for your home, usually the DEBT will be in existing credit card accounts, personal loans, and car loans.  If possible, try to get as much debt as possible paid off before finalizing the divorce. Remember that joint debts remain both spouses’ legal obligation to the lenders, even when the divorce settlement states that only one spouse is responsible for the debt. If the responsible ex-spouse defaults on the payments, it will show up on both ex-spouse’s credit history.
Some good advice? Get your own credit card in your name only. If you keep other credit cards take your spouse’s name off the credit card Now! Get your name off any credit card that your spouse uses NOW! Divorce causes financial upheaval to a family’s budget so protect yourself, so you don’t have to pay or be legally responsible for your soon to be EX’s Bills! 

3. Bank Accounts

Most married couples have at least one joint bank account. Many will have joint checking and savings accounts. You need to get a record of every family bank account in existence. Make sure you have copies of all monthly bank statement for 3 years.
Review these carefully and see if there has been a constant drainage of money from the accounts.
Now open a new account in your name. It is critical to establish your own financial identity when you divorce.
If your spouse does business with the bank in a business capacity or you have car/personal loans with the bank, you need to open a personal account with another bank of your choosing. 

4. What About Our Home? 

One of the hardest assets to deal with in a divorce.  This is where the couple lived as a family, with or without children. If there are children involved, their little lives have centered around their schools, churches, sports teams and friends.  It is heartbreaking to the entire family, but this decision is usually the final family break.
If the decision is for one spouse to take over the homestead and debt, the ideal situation is for such spouse to refinance the home in only their name. The single spouse will be responsible for the debt on the house and full title on the house. Otherwise if the spouse can’t afford to refinance the house, both spouses will have to work out a co-owner agreement and continue to have both names on the title and share the large financial burden. In such event, frequently, sale of the home is the best option.
This is one of the most serious real estate problems we encounter in a post-divorce situation.  Times get tough and the ex- spouse, who took over the house debt, cannot afford to pay the mortgage and the property falls into foreclosure, affecting both ex- spouses’ credit. Sometimes it is better, if one spouse cannot refinance the house loan, to sell the house and divide the proceeds.

Other “To Do” Items to Address Before the Start of the Divorce

    1. Make sure your assets are protected. Check that your car, health, and homeowner’s insurance is up to date and enough for your and your children’s needs. Also start the process of changing beneficiaries on all life insurance policies/annuities and retirement accounts (IRA / 401k at work) you own from your ex-spouse to your heirs or other designees.
    2. Change all passwords on your online accounts and all banking and credit card accounts. Time for some personal privacy!
    3. Time to start thinking about your digital assets that you as a couple developed and shared? This is a community state and how will this affect this type of asset?
    4. Think about reviewing your will and other estate planning documents. We suggest that when the divorce is final, you need to have a new will in place that will be only your heirs minus your Ex.
    5. Very important! Establish your own credit in your single name

This list will give you a start on the financial items that you must be addressed immediately in an upcoming divorce. Be prepared before the divorce and know where you stand financially. This will hopefully give you time to talk with financial and legal experts so you can make wise decisions on addressing the financial aspects of the divorce for you and your other family members.  

The Nacol Law Firm P.C. 

DETAIL

Please contact father’s rights Dallas Attorney Mark Nacol, or father’s rights Dallas Attorney Julian Nacol with the Nacol Law Firm P.C., for legal insight to your rights as a father. Both attorney Mark Nacol, and attorney Julian Nacol , provide counsel in the area of family law including divorce, father’s rights, interstate jurisdiction, child support, child custody, visitation, paternity, parent alienation, modifications, property division, asset division and more. Attorney Mark A. Nacol is board certified in Civil Trial Law by the Texas Board of Legal Specialization. Our attorneys at The Nacol Law Firm P.C. serve clients throughout Texas, including Collin, Dallas, Denton, Ellis, Grayson, Kaufman, Rockwall and Tarrant counties and the communities of Addison, Allen, Arlington, Carrollton, Dallas, Fort Worth, Frisco, Garland, Grapevine, Highland Park, McKinney, Mesquite, Plano, Prosper, Richardson, Rowlett and University Park, Murphy,Wylie, Lewisville, Flower Mound, Irving, along with surrounding DFW areas.

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