Just as important as where you file for divorce is how you approach the division of your marital estate. Many people wonder: Does the mix of assets (business, real estate, investments) matter in a divorce? Although Texas is a community property state, meaning that all assets acquired during your marriage are presumed to belong to you both equally, the makeup of those assets can heavily influence your legal strategy.
Texas divorce laws hold that assets accumulated during marriage are presumed to be community property. According to the CDC, the marriage rate in Texas is 5.8 per 1,000 population. The divorce rate was 2.1 per 1,000. Additionally, the fertility rate is 60.6 births per 1,000 women aged 15-44
This presumption of community property is found under Texas Family Code § 3.002. However, the courts have wide latitude under Texas Family Code § 7.001 in dividing that community property. The statute states that the court shall divide the estate of the parties in a “just and right” manner. This means that how your assets are titled, managed, valued, and accrued all play significant roles in divorce proceedings.
Business Ownership Creates Pressure to Value
Some of the trickiest assets to untangle in a high-net-worth divorce involve businesses. Whether started before or during marriage, all businesses are valued by the court when dissolved in divorce. Income streams, growth patterns, and overall market value will be dissected during discovery and, if necessary, at trial.
The business may be separate property if it existed before marriage. Increased revenue and community-contributed labor may create valid claims for reimbursement. Many business owners also rely on their company as their primary source of wealth. This creates significant valuation pressure at trial and a stronger incentive for the opposing party to dispute every aspect of the valuation.
Real Estate Holdings Change Liquidity Considerations
Real estate can be similarly difficult. Multiple properties add equity questions, debt division considerations, and timing pressures. For example, a divorcing couple may have multiple real estate holdings but lack short-term liquidity. This creates unfair pressure to sell or refinance family real estate during divorce negotiations.
Investment and Retirement Accounts Adjust Risk Tolerance
Something else to consider is that not all assets are valued equally. Stocks, bonds, retirement accounts, and home equity all carry unique risks that may make one asset more favorable than another. Combining high- and low-risk investments in divorce negotiations changes your immediate risk exposure relative to future financial gains.
For all of these reasons, it is important to build your divorce strategy around the makeup of your marital estate. Your Austin divorce lawyer should be retained early to ensure you are taking proactive steps to protect your interests, rather than reacting to moves made by your spouse.
Hire a Divorce Lawyer With the Law Office of Ben Carrasco, PLLC Today
Ben Carrasco is an Austin divorce lawyer who focuses exclusively on family law in Travis County, Texas. We believe in personalized service and tailor each case file to your family’s specific needs. Unlike larger firms, we don’t delegate family law to junior associates or paralegals. When you hire the Law Office of Ben Carrasco, PLLC, you hire a divorce lawyer who will go to bat for you and your children every step of the way.
Ben has years of experience handling contested divorces and high-net-worth estates. He understands that every client has the same goal: protecting their family, and he will develop a custom legal strategy to help you get there. Many contested family law cases in Austin are heard at the Travis County Civil and Family Courts Facility, located at 1700 Guadalupe Street, Austin, TX 78701. Contact us today to get started on your divorce case.
