In high asset divorces, many people wonder: Do trusts, LLCs, or out-of-state assets change my divorce strategy? In Texas divorces, the answer is most of the time, yes. When handling high-value assets in litigation, it is essential to develop an advanced strategy to enhance asset value before court evaluation and to defend against issues such as valuation disagreements and jurisdictional disputes.
At the Law Office of Ben Carrasco, PLLC, we can help you understand these nuances and develop a strategy tailored to your specific situation.
Texas Divorce Laws
Texas is a community property state, but that doesn’t mean everything is automatically divisible 50/50. Texas Family Code § § 3.002 and 3.001 broadly define community property and separate property, respectively. Most fights over wealth tend to focus on trusts, business interests, and whether money has been commingled or used in ways that make it susceptible to division.
Texas has roughly 2.1 divorces per 1,000 people, according to the most recent CDC data. This was less than the national rate of 672,502 divorces, with a divorce rate of about 2.4 per 1,000 people in the United States.
Trusts and Divorce in Texas
Many husbands and wives believe a trust means the money is safely tucked away from divorce court scrutiny. However, when trust funds flow into a marriage and are used for marital purposes like paying living expenses, investing in real estate, or supporting the family, you could see your spouse argue that a community property interest was created through those distributions.
A spouse can contest a trust during divorce court proceedings if their partner exercises complete authority over trust distributions either through trustee powers or unrestrained discretion.
LLCs, Business Interests, and Valuations
If you own a closely held LLC that was started during the marriage, it is presumed to be community property even if the other spouse’s name is not on the paperwork. If your business was started before the marriage, any increase in value during the marriage is presumed to be community property as well.
At trial, your spouse’s attorney will try to argue your business is worth more than you say it’s worth. They’ll attack depreciation schedules, cash flow, and overhead to paint a picture of depressed earnings and a higher value.
If your spouse owns a business or professional practice, Texas courts can order reimbursement claims and forensic accounting to trace when community income was used to benefit a spouse’s separate property.
Hire a Divorce Lawyer
If you have serious wealth at stake when divorcing in Texas, hire a divorce lawyer before your spouse starts moving assets.
In high-asset divorce cases, strategic thinking is more valuable than rushing to reach a judgment. Numerous clients reach out to us after their spouse transfers significant assets into a trust or new business entity and even moves funds to an out-of-state bank account. At the Law Office of Ben Carrasco, PLLC, we can help you get in front of this. Contact an experienced member of our legal team today to begin fighting for your financial future.
