Knowledgeable Division of Assets Attorneys Representing Beaumont & Port Arthur Family Law Clients
Texas is a Community Property State
A Texas court will begin its evaluation with the presumption that all property held by either spouse during the course of their marriage is community property. Texas defines “community property” as any property acquired or earned during marriage that is not separate property. In other words, if either spouse wants to keep an asset free from division, he or she must unequivocally demonstrate that the asset is separate property.
“Separate property” includes any and all assets that belonged to one spouse prior to marriage. In order to be considered separate property, these assets must have been kept separate throughout the course of the marriage. Separate property also includes anything given only to one spouse during the marriage — i.e. a gift provided by a friend to only the wife, or an inheritance received by the husband. Once either spouse proves that an asset is his or her separate property, that asset must remain in the possession of the original owner. In other words, the court cannot award it to the other spouse.
Adjustments to Equal Division
When determining whether or not the presumption of equal asset division should be adjusted, a Texas judge may consider factors including the education, ages and health of either spouse, as well as their individual earning capacities, work skills and business opportunities. The court may take into account whether or not a spouse is the primary caregiver for the couple’s child (if applicable), and the amount of separate property each spouse owns. Keep in mind that questions regarding whether or not one spouse was at fault in causing the marriage to fail may also come into play if the judge considers it important.
Closely Held Businesses & Professional Practices
Any closely held business or professional practice will be considered in the valuation and division of community property. If a closely held business or practice has been established during the course of the marriage, there is a community property interest that must be taken care of during the divorce proceeding.
The most complex and time-consuming component of determining the value of a closely held business or professional practice is in valuing “goodwill.” This is the abstract value most businesses possess based simply on their established name and/or reputation. Every closely held business and professional practice has a goodwill value, and this value must be determined when the couple divorces.
Simply defined, a prenuptial agreement is an agreement between prospective spouses made in contemplation of marriage. Prenuptial agreements typically govern the manner in which property will be divided, including land, buildings, retirement accounts and automobiles. It is important to remember that prenuptial agreements must be finalized before a marriage becomes official.