This week’s blog delves into protecting your assets from divorce in Texas. If you are getting divorced in Texas, it is important to understand the laws that protect your assets. So, this week, we’ll discuss some of the most important asset protection measures available to you in a Texas divorce. We will also provide some tips on how to keep your assets safe during and after the divorce process and touch on some of the questions that we are frequently asked by our clients on how to protect specific types of assets.
As we discussed last week, Texas is a community property state, which means that all assets and debts acquired during the marriage are considered to be jointly owned by both spouses. This includes property such as the family home, cars, furniture, and savings accounts. debts such as credit card balances and mortgage payments.
Common Steps to Protect Your Assets
Under Texas law, there are several ways to protect your assets in a divorce. First, you can negotiate a property settlement agreement with your spouse that outlines who will get which assets in the divorce. This can be done through mediation or negotiation between attorneys. If you and your spouse cannot come to an agreement, the court will decide how to divide your property.
Second, you can protect your assets by creating a prenuptial or postnuptial agreement with your spouse. This type of agreement can outline how property will be divided in the event of a divorce. Prenuptial and postnuptial agreements are enforceable in Texas, so long as they are fair and reasonable. However, it’s important to have an experienced attorney draft or at least review any potential pre or post-nuptial agreement to ensure that it is indeed enforceable.
Third, you can also protect your assets by using trusts and other estate planning tools. Trusts can be used to keep certain assets separate from your spouse and out of the reach of creditors. Estate planning tools such as wills and Powers of Attorney can also be used to protect your assets in a divorce. It may be possible to use a will to specify how you want your assets to be divided if you pass away. This can include specifying that certain assets go to specific people, such as your children. In that case, those assets cannot be divided with your spouse and can instead be protected in a trust for your inheritor.
Finally, you can take measures to protect your assets after the divorce is final. This includes transferring ownership of property to another person, such as a child or relative. You can also create a trust or other estate planning tool to hold assets for your benefit.
How to Protect Specific Types of Assets
Aside from general things you can do to protect your assets in a Texas divorce, we also get a lot of questions about how to protect specific types of assets. For example, a key concern among many of our clients is how to protect a business that perhaps they have built during the marriage. While you may not be able to protect 100% of your business assets in a divorce, there are a number of things you can do to protect yourself.
- Get a valuation of your business. This will be important for determining how to divide up the assets in your divorce. Make sure to get a professional valuation so that it will hold up in court, if necessary.
- Consider creating a prenuptial agreement or postnuptial agreement if you didn’t have one before marriage. This can help protect your business interests in the event of a divorce.
- Keep good records of all aspects of your business. This will be helpful in dividing up the business assets in a divorce.
- Be prepared to negotiate. If you and your spouse own a business together, you will need to come to an agreement on how to divide it up. This may require some give and take on both sides.
- Get help from a professional. An experienced divorce lawyer can help you navigate the divorce process and protect your business interests.
If you are facing a divorce in Texas, these tips can help you protect your business. With careful planning, you can minimize the impact of the divorce on your business and ensure that it remains a successful venture after the divorce is finalized.
Another question we frequently get deals with how to protect inherited assets, whether inherited prior to or during the marriage. Fortunately, in Texas, inherited assets are generally considered to be separate property, which means they’re not subject to division in a divorce. However, there is one caveat to that rule. If you inherit assets and then commingle them with other assets (such as putting them into a joint bank account), those assets may also become community property. Therefore, the best thing to do is to keep them separate from any other assets. This means keeping them in a separate bank account and not commingling them with other funds.
We also get a lot of questions about gifts and family heirlooms. Since Texas is a community property state, there is a presumption that everything acquired during the marriage is community property. But there is an exception for gifts and inheritances. As with everything else, there are actions you can take to protect any gifts or heirlooms that were given to you as an individual. Primarily, you will need to prove that they were given to you as an individual and not as part of the marital community.
Taking steps to protect your assets in a divorce can be complex and difficult. If you have any questions about how to do this, you should consult with a knowledgeable divorce attorney. An experienced divorce lawyer can help you understand the laws in Texas and protect your rights during the divorce process. Alexandra Geczi, PLLC, a law firm focusing on divorce for women in Dallas, Collin, and Denton counties, combines its team of skilled divorce attorneys with the best financial advisors, business and estate attorneys, and CPAs in the state to make sure our clients are able to protect as much of their wealth as possible during the divorce process.
If you’re interested in speaking with us about how we can help you protect your assets from a divorce, fill out the contact form below.