When you’re going through a divorce, one of the most contentious aspects is often the division of assets. This becomes even more challenging when spouses need to account for trust and business interests when separating their property. In most marriages, couples only need to worry about real estate, joint bank accounts, and other, more straightforward assets. Working with an attorney who knows how trusts and LLCs affect divorce in Texas can help you protect your rights and your assets.
Understanding Property Division in Texas
Texas follows a community property system, meaning that property acquired during a marriage is generally shared by both spouses. This includes income, real estate, retirement accounts, business interests, and other financial assets. What isn’t included is property gained prior to marriage, gifts, or inheritance.
When dividing property, Texas Family Code §7.001 states the court must divide assets in a just and right manner. While many people believe this means assets must be split 50/50, the court reserves the right to issue a different allocation of property depending on the circumstances of the case. Between trust and LLC laws, determining how to fairly divide these complicated assets takes time and knowledge.
How Trusts Affect Divorce
As an estate planning and asset management tool, trusts can quickly complicate asset division during a divorce. While only about 11% of Americans have trust, knowing how they impact a divorce can be important. Ultimately, how and when the trust was created and funded determine its part in property allocation. If a trust was created and funded before marriage, it’s considered separate property and cannot be divided.
However, if marital funds were contributed to the trust, those funds were subject to division. While many parties try to hide assets in a trust to prevent them from being divided, an experienced attorney can investigate to prove which funds in a trust count as marital property.
How LLCs Affect Divorce
With LLCs making up 72.2% of partnerships filed with the IRS, it’s not uncommon for them to be involved in divorce cases. Because both ownership interest and assets owned by the LLC could be considered marital property, dividing an LLC becomes tricky. If the LLC was formed during marriage or funded with marital funds, membership interest is considered marital property. Dividing LLC assets often requires close security by forensic accountants to fully uncover their value.
Hire a Trust Lawyer in Texas
When you’re going through a divorce that involves complex business and financial assets, you want an experienced attorney by your side to guide you through the process and protect your rights. Hire a trust lawyer to help you protect your assets and secure a favorable divorce agreement in Texas. The team at the Law Office of Ben Carrasco is here to give you the guidance you need through your LLC or trust case. We know Texas divorce laws and how they can impact your case.
Contact us today to schedule a case review. We’ll explain more about how trusts and LLCs factor into asset division and come up with strategies to protect your rights and interests.
