High-Asset Gray Divorce in Texas

 Posted on May 06,2015 in Complex Property Litigation

The marriage dissolution rate for these couples has doubled in the last twenty years. These "gray divorce" matters are often the epitome of a high-asset divorce. While there may be no complex child custody issues to resolve, the property division can be a Gordian Knot of separate assets, community assets, and commingled assets.

Aging baby boomers were the first demographic group to divorce in significant numbers. Many of these people are now in their second or subsequent marriage, and the fact that the divorce rate is significantly higher in these relationships may partially explain the gray divorce phenomenon. In one study, the authors pointed to unique later-in-life issues — such as the empty nest syndrome, declining physical health, and ailing parents — which can put added strain on a relationship.

The study predicted that gray divorce would increase even if the overall divorce rate remained flat, due to the aging American population.

Asset Tracing

In complex property divorce litigation cases, an attorney often partners with a financial professional to conduct a forensic accounting. Especially in marriages that lasted longer than ten or fifteen years, the line between community and separate property can become blurred. Consider the following example:

Prior to the marriage, husband acquires a "project car" that has essentially no objective value. Over time, he uses funds from his paycheck to improve the car. When the couple divorce, the car is appraised at $25,000. Wife may dispute husband's claim that the car is separate property, because husband used community funds — his paycheck — to improve the car.

A forensic accountant can basically go back in time and determine whether or not the item has been transmuted, or converted from separate into community property. This process involves an extensive and thoughtful search of deposits and withdrawals from retirement accounts, deposits and withdrawals from checking and other Demand Deposit Accounts (DDAs), purchase and sale of securities, withdrawals, and transfers within bank and brokerage accounts, and other such transactions. Alternatively, the accountant can determine the amount of reimbursement that is due to the contributing estate.

It is very important to retain an attorney that is experienced in complex divorce matters and regularly practices in the local courts. Many judges have their own procedural rules, and many of these rules are unwritten.

For questions regarding gray divorce, contact an aggressive Leander high-asset divorce attorney. Call Powers Kerr & Rashidi, PLLC at 512.610.6199 for a consultation. Mr. Powers is a board certified family law expert.