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Inappropriate Behaviors to Avoid in a Texas High Asset Divorce
Divorce can get ugly, especially when the couple has a high net worth. If the relationship between the two spouses has become contentious, then one or both may feel that they deserve the majority share of the marital estate, despite the fact that Texas follows the community property method of asset and property division in divorce. And although it may be tempting to take certain steps to ensure that you get the majority share, it could result in some serious sanctions by the court if those steps are discovered. The following are some of the things you should avoid in your high asset divorce.
“Shopping” for an Attorney
When you are going through a divorce, you want to make sure you have a skilled attorney advocating for your best interests. It is not uncommon – in fact, it is recommended – that you meet with a couple of attorneys to make sure that you find one that you are comfortable with and that is qualified to meet your legal needs. However, what is not acceptable is meeting with multiple attorneys in order to prevent your spouse from also retaining a qualified attorney.
Dealing with Complex Child Support Issues in Texas
Under Texas law, when parents split up, all child support orders are issued in compliance with the state’s child support guidelines. There are situations, however, when the child or the parents may have what is referred to as extraordinary income or expenses. This is often the case in divorces involving a high net worth couple. In these situations, the court may deviate from the traditional guidelines and come up with a different amount.
Texas Child Support Guidelines
Generally, the court will take the parent’s net monthly income (based on the formula put in place by the state) and the parent will pay a percentage of that amount based on how many children the couple has. As of this writing, the current guidelines are:
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One child – 20 percent
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Two children – 25 percent
Tips for Negotiating a Complex Asset Division in a High Net Worth Texas Divorce
It is rare that a divorce does not have some level of complexity involved. These complications become even more compounded if a couple has substantial assets that need to be divided. This is usually because the more assets and property there are, the more there is to fight over, especially if the divorce is an acrimonious one.
Many high net worth divorces involve real estate, stocks, trusts, business interests, jewelry, art, antiques, and more. In order to ensure that there is a fair and equal division of your marital estate, it is important to have a qualified and experienced high-asset divorce attorney representing you. The following tips can also help to ensure that the process goes as smoothly as circumstances allow.
Keep It Civil
The end of a marriage is often filled with stress and anger. It can be difficult to communicate with your soon-to-be-ex-spouse about financial issues, but it is important to make an effort to keep it as civil as possible. This is a time to try to put that anger aside and not only share your wishes with your spouse but also listen to what they are saying and try to understand where they are coming from. This attitude makes asset negotiation much easier.
Challenging a Texas Prenuptial Agreement
When it comes to the division of the marital estate in a divorce, Texas is a community property state. This means that the court generally divides the marital estate in half unless there is some type of valid legal document in place that states otherwise. One such legal document is a prenuptial agreement.
A prenuptial agreement is a legal contract that the spouses enter into before they get married. A prenup can cover a number of issues should the marriage end, including what assets and property are separately owned, which are marital, how the marital assets should be divided between the couple, and whether any alimony will be paid.
Prenups also enable a couple to have significant and important discussions about finances that they may not otherwise have prior to the marriage – something that can cause marital problems in the future – since both spouses are required to disclose all assets and debts they are bringing into the marriage. This can help open up the discussions about what kind of spending habits each spouse has and what each spouse’s financial goals are for the future.
Using a Private Investigator in a Texas Divorce
Divorce is messy. Divorces that involve complex child custody issues, a high-net-worth marital estate, hidden assets, or other significant issues are even messier. In many of these types of cases, a divorce attorney may recommend hiring a private investigator to uncover evidence to help a spouse prevail in the final divorce settlement.
However, it is important that the private investigator you hire is a skilled professional who can produce results and is also aware of the legal limits that they are supposed to be following. Conversely, if your spouse has hired a private investigator to try to dig up evidence against you, it is also important to let your attorney know if that investigator is breaching those limits.
What Are Private Investigators Allowed to Do?
An investigator has many methods and tools to work with. The following are some of the most common methods that a private investigator is allowed to engage in:
How Do I Know How Much My Private Practice is Worth in a Divorce?
Divorce can have a significant financial impact on a person, especially if they are involved in running their own business. A business is usually among the marital assets that need to be divided under Texas community property laws. But before a business can be divided, its value needs to be assessed. Some businesses are easier to value, while others, such as private practices, can be more difficult. If you are a physician with your own practice, you likely have questions about how your business will be valued for the purposes of divorce.
Determining the Value of a Medical Practice
In order to determine the actual value of your medical practice, you will need to hire a financial professional who specializes in medical practice valuation. It is critical that you hire your own professional to make an assessment of your practice since it is also highly likely that your spouse’s attorney will also recommend they hire a professional to do the same.
Using Cryptocurrency to Hide Assets in a Texas Divorce
What was once just a hobby for a few has turned into a significant form of investment for many. It is estimated that more than 20 million people in this country own cryptocurrency. The value of the cryptocurrency market hit an all-time high of $2 trillion in April, an obvious boom for anyone who owns crypto assets. But this popularity of cryptocurrency has also created a way for some spouses to hide assets in a divorce.
How Is Cryptocurrency Treated in a Texas Divorce?
Cryptocurrency is considered a marital asset, just like funds in financial accounts, stocks, bonds, 401(k) accounts, and IRAs. Since Texas is a community property state – meaning the marital estate is divided in half in a divorce – the value of any crypto assets the couple owns is also required to be split between the couple.
In situations where one spouse purchased crypto assets prior to the marriage, the growth in those assets may be deemed a marital asset depending on how the couple approached this growth. For example, if both spouses worked together in making decisions in purchases, investing, etc., during the marriage, then the court could rule that profits made during the marriage are not separate belonging to the spouse who purchased the original assets, but are instead marital assets.
Are You Considering a Texas Divorce?
When a marriage has broken down, it can be difficult to decide which way to turn. Do you stay and try to work through the issues that have come between you and your spouse or do you finally walk away and start a new life for yourself? There are many aspects to ending a marriage – both emotionally and legally. Before making the final decision, the following are some of the issues a person should think about when considering divorce.
Will You Be Able to Support Yourself Financially?
If you are the primary wage earner, then this may not even be a question for you to consider, but if you are a stay-at-home parent or only work part-time, you will need to consider how you will be able to cover all of your expenses after your divorce is final. If this is your situation, your attorney may recommend seeking spousal support from your spouse.
Where Will You Live During and After the Divorce Is Final?
Tax Obligations to Consider in a Texas High Asset Divorce
There are many complex financial issues that need to be addressed in a high-net-worth divorce. Unfortunately, one of those issues is taxes. When marital assets are divided in a divorce, the IRS considers this income. This is why it is critical to have a skilled high asset divorce attorney advocating for you and ensuring your financial future is protected.
Spousal Support
Prior to 2019, spousal support payments were fully deductible for the spouse who was making the payments and the receiving spouse was required to claim the payments as income on their tax returns. However, for anyone divorced after January 1, 2019, the law was changed so that the spouse making the payments must pay taxes on this money since it is no longer deductible. The receiving spouse no longer has to report the payments as income.
Dependent Exemption
Whenever there are children in the marriage, a decision must be made in the divorce agreement over which parent will be able to claim the child as a dependent on their tax return. There are several common options that the court may order. For example, the parents may alternate years, where one parent takes the claim on even years and the other parent takes the claim on odd years. If the couple has more than one child, the option may be to “divide” the children on their tax returns.
Steps to Take If You Suspect Your Spouse of Hiding Assets
When it comes to divorce, Texas is a community property state. This means that the marital estate is supposed to be divided 50/50. Unfortunately, many spouses do not feel that their spouse is entitled to half of everything the couple owns and will do all they can to prevent that from happening–even if what they are doing is illegal. If you suspect your spouse is hiding assets, there are steps you can take to determine how they are doing it and where the assets are. A skilled Austin complex divorce attorney can help.
Steps Your Attorney Can Take
During the divorce process, there are many types of legal documents and records that must be shared between both parties. Many of these documents are handed over during the discovery phase. All information exchanged between spouses is done so under oath and consequences of intentionally omitting or covering up information can result in serious consequences.
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