Asset valuation and division are determined in Austin through the discovery process. This is often one of the most contentious parts of the divorce process and therefore requires a skilled attorney. Our team could help you through this part of the process by fighting for your fair share of the marital property.
Exchanging an Inventory During the Asset Valuation Process
Before assets can be divided, we must know what assets actually exist and what they are worth. The discovery process facilitates both of these goals. The first thing we generally do in discovery is exchange an inventory. This is a spreadsheet identifying all of the assets and debts that have been accumulated during the marriage, both community and separate, and what their values are.
Each spouse prepares and submits his or her own inventory. Often, there’ll be agreements between the two inventories. They will reflect the same values and assets, but it is not unusual in a marriage for one spouse to not know what the other spouse has. An inventory is a sworn document that is signed under oath acknowledging that, to the best of your knowledge, what is on this sheet are all the assets and debts in this marriage. Some assets may require further investigation to properly value. A business valuation expert may need to be retained to value a business or an appraiser to value real estate.
The limitation of an inventory is it simply reflects what either party believes to be the current value of their assets at the time. For example, the inventory may list a house, the amount of the mortgage on the house, and what the assumed market value is of the house. For a retirement account, it lists the current balance of a retirement account or a checking account. However, the inventory does not describe what activity happened in those accounts for throughout the marriage—whether money was surreptitiously moved out of an account, for example. . This sheet often does not include any supporting documentation. The single value on these sheets is inadequate and why additional discovery is still needed in many situations.
Property Division and the Discovery Process
In a discovery, one spouse can request that the other spouse produce actual account statements showing the balance in their retirement account or the balance in their checking account for a designated period time—ie several years. Additionally, the spouses may have a formal appraisal done of the house to determine its market value. During the discovery process, a person can identify whether there has been any misconduct with respect to the management of financial assets.
How Marital Agreements Impact Asset Division
A prenuptial agreement is a contract entered into by the spouses before they actually get married. This agreement identifies or lays out how assets are going to be divided in the event these two persons getting married get a divorce. The way it impacts the distribution of assets is if both spouses sign a prenup and then get married and ultimately file for divorce, they have an agreement that governs how assets will be divided by the court. Provided there was no fraud in entering into the prenuptial agreement, the court is going to divide the assets based on what the parties agreed to in their prenup.
A postnup is an agreement regarding the distribution of assets that spouses enter into after they get married. It impacts how the distribution of assets is determined in the same way that a premarital agreement does in Austin. This means if the parties file for divorce, the court is going to look to the postnuptial agreement and enforce whatever terms the spouses made in that postnup regarding how the assets are going to be distributed.
Division of Debt
Debt is factored into a divorce just like assets are. In Austin, part of the process for identifying how assets are going to be distributed is exchanging inventories and conducting discovery, which is the same process for identifying and valuing the debts. When you exchange an inventory in a divorce case, that inventory includes not just the assets but the debts, including credit card debts, mortgages, car notes, any other debts that the parties might owe. Student loans is another common example.
Similarly, with respect to discovery, one spouse can ask the other to produce credit card statements, credit reports, notes, names, any other document reflecting the debt. Regardless of whose name the debt is in, the court is empowered to divide those debts just like it divides assets, meaning both individuals may be responsible for paying off these loans even after they go their separate ways.
Contact an Austin Attorney to Discuss How Asset Distribution is Determined
You do not have to go through the marriage dissolution and property division process alone. A lawyer from our firm could explain how asset distribution is determined in Austin divorce cases. Call today to have any concerns or questions addressed.