Category Archives: Property Division

Divorce Concerns For High Net Worth Couples

When a couple with a high net worth files for divorce in Texas it often involves a number of unique issues and concerns. This articles highlights some of the issues and concerns that frequently arise in a divorce involving high net worth couples.

Existence of Martial Property Agreements

A divorce involving a high net worth couple in Texas will often involve a marital property agreement.

This may be a prenuptial agreement entered into before the marriage or a marital property agreement entered into after the spouses were married.

The marital property agreement may divide the couples property and identify which property is treated as separate property and which is treated as community property.

This is important because only community property is subject to division in a divorce and a court will enforce the terms of a properly executed marital property agreement.

The agreement may also provide for a specific division of property in the case of divorce as well as additional terms specifying each spouse’s obligations following divorce.

Child Support Guidelines Do Not Apply in High Net Worth Divorces

The child support guidelines used in most divorce cases in Texas only apply to the first $8,550 of net resources of the spouse obligated to pay child support.

Net resources are different from gross income. Gross income in child support calculation includes all sources of income. Gross income is not limited to a spouse’s salary, but also distributions and dividends from business income.

Usually, if the spouse obligated to pay child support has monthly gross income in excess of $11,000 then his or her net resources will exceed the $8,550 limit to the child support guidelines.

A high net worth couple will usually have at least one spouse that exceeds this level of income.

Unique Lifestyle of the Children

Invariably, as a family’s income increases so does the amount of money spent on their children. This leads to unique needs for the children of the divorcing couple that are not present in most divorces.

Private school tuition is a common example. Child support paid under the statutory guidelines is likely not sufficient to pay for the usual care of the children as well as tuition at a private school. The spouses will have to reach an agreement on who will be responsible for or how they will divide these additional expenses.

The children may have become accustomed to annual family vacations, especially if the couple owns multiple real estate properties such as a vacation house or beach house. In addition to dividing those assets, the divorcing couple may need to provide a schedule for access to the properties by the other spouse.

Another issue that may arise is the use of in-home child care in the form of a Nannie or other assistance. The spouses will have to coordinate issues such as payment of salary and use of the Nannie’s services during the divorce.

Spousal Maintenance

High net worth couples frequently have one spouse who owns a business or provides all of the income for the family.

This means spousal maintenance is a much more important issue for the non-income earning spouse so that he or she can maintain some semblance of the lifestyle that he or she was used to prior to the divorce.

Lack of Information

In situations where one spouse is the primary income earner, you will often find that the other spouse is at a disadvantage when it comes to knowledge of the family’s assets and income sources during the divorce.

This inequality in information often requires more effort be put forth during discovery to properly identify all assets of the marriage before entering into any agreement regarding property division.

In these cases some of the best sources of information will be third parties and the use of financial investigators.

Property Division

There are other unique issues that arise in a high net worth divorce when it comes to dividing the couple’s property.

Often times there are unique items of personal property that may have sentimental value or be difficult to value. This can lead to contentious negotiations when trying to arrive at an overall property division which is just and equitable.

When there are multiple real estate properties in multiple jurisdictions, characterizing those assets can be difficult as can be dividing the assets up.

It is common in a high net worth divorce for one or both spouses to own a business. Texas is a community property state which means that even if that business is titled int he name of one spouse, if the interest was acquired during marriage then it is community property and subject to division during the divorce.

Dividing a business can be tricky and you can read more about those issues by reading this article.

Privacy Concerns

A couple with high net worth will rightly have concerns about privacy concerning the value and nature of their marital estate – even after divorce.

In most cases, the property division is described in detail in the final decree of divorce filed with the court. However, that is a public document.

It is possible, if the spouses agree, to keep the details of any property settlement out of the public record. This is often in the interest of both spouses.

If you would like to schedule a consultation to discuss your divorce case, then please send me an e-mail or send a request through my contact page.

How Do I Keep My Spouse Out Of The House During Our Divorce?

One of the biggest initial concerns when you file for divorce is how to keep your spouse out of the house until the divorce is final.

There are a lot of good reasons to be concerned about this.

At best, living in the same house with your spouse while you are getting divorced could lead to some very awkward moments.

At worst, living in the same house with your spouse during divorce could lead to nasty verbal or even physical confrontations.

So how do you keep your spouse out of the house during your divorce?

There are several options but it is important to remember that, absent agreement between the spouses or exceptional circumstances involving family violence, there is no immediate option to force your spouse out of the house.

By Informal Agreement

The first option is to come to an informal agreement between you and your spouse. This could be done verbally.

Preferably, this would be done in writing. Texas rules allow you and your spouse to enter into enforceable agreements if certain requirements are met. It could be as simple as documenting the agreement in writing signed by both of you and your attorneys.

If needed, you can file that agreement with the court and then it becomes an enforceable agreement between you and your spouse.

By Formal Agreement

In some cases, one or both of the spouses will ask for the court to issue temporary orders. Temporary orders govern the conduct of the parties during the divorce with an eye toward maintaining the status quo while preserving community property until the court renders a final decree of divorce.

Temporary orders can be contested in which case the issues are decided by a judge at a hearing. You and your spouse can also enter into agreed temporary orders that are filed with the court and signed by the judge.

This makes your agreement regarding who remains in the house a court order – hence the formal agreement aspect.

By Court Order

So what happens if you and your spouse do not agree on who can stay in the house during the divorce?

In that case, you would request the court to issue temporary orders as discussed above. The difference in these circumstances is that it will be a contested hearing with no agreement between you and your spouse.

You will have the burden of persuading the judge why you should be allowed to stay in the marital residence during the divorce and your spouse should be forced to relocate.

If you are awarded custody of minor children, it is likely you will also be awarded the exclusive right to remain in the residence so that the children can remain in the environment that they are accustomed to living in.

But what factors would a court consider if there are no children in the marriage?

The court might consider the relative earning capacity of you and your spouse in relation to your abilities to afford alternative housing. The court might also consider family and other alternatives available to you and your spouse during the divorce. The court will also consider whether remaining in the house would be more beneficial to you or your spouse.

Exceptional Circumstances

Court’s have the power to issue temporary restraining orders (“TRO’s”) for the purpose of protecting people or property. TRO’s are common early in divorce cases. However, a TRO ordering a spouse out of the house can only be issued in limited circumstances.

TRO’s are issued ex parte – which means on request of one spouse without a hearing or participation by the other spouse against whom the TRO is issued. Because the other spouse does not have an opportunity to participate in defending against the TRO, Texas law places strict rules on TRO’s

For example, the court must schedule a hearing on the TRO within 14 days when it issues the TRO. TRO’s expire after 14 days unless the TRO is converted into a temporary injunction at a temporary orders hearing.

Texas law also prohibits a court from issuing a TRO that excludes a spouse from occupying the residence where that spouse has been living except in the case of protective orders to prevent family violence.

For more information:

If you would like to schedule a free consultation to discuss your divorce case, then please send me an e-mail or send a request through my contact page.

General Rules of Property Division in a Texas Divorce

With few exceptions, every divorce in Texas will require a division of property. This article provides a quick overview of the general rules that govern property division in a Texas divorce as well as some of the key issues.

Community Property vs. Separate Property

Texas is a community property state. This means that, absent a marital property agreement, all property acquired during marriage is community property.

In fact, there is a presumption that all property in the possession of either spouse at the time of divorce is community property. If one spouse wishes to claim a particular piece of property as separate property, then that spouse has the burden of establishing its character as separate property.

So what is Separate Property?

Separate property is property that meets any of three characteristics: (1) it is property owned by the spouse before marriage; (2) it is property acquired by the spouse during marriage by gift, devise, or descent, or (3) it is a monetary recovery for personal injuries sustained by the spouse during marriage.

Just and Right Standard

Under the Texas Family Code, a judge is required to order a division of the community estate of the spouses in a manner that the court deems “just and right” with due regard for the rights of each party and any children of the marriage.

What is “just and right” can vary significantly and will be based upon the specific facts of each marriage. There are also a variety of factors a court will consider when deciding what constitutes a “just and right” division.

What Property is Subject to Division?

Only community property may be divided between the spouses or awarded to one spouse in a final decree of divorce. A divorce court does not have jurisdiction or authority to award the separate property of one spouse to the other spouse.

However, as you will see below, the judge may consider the existence of a spouse’s separate property and the value of the property in making a “just and right” division of the property.

Factors Affecting a Just and Right Division of Property

There is no limit to the factors a court can consider in arriving at what constitutes a “just and right” division of the community estate. However, there are a number of common factors a court will consider that I have listed below:

  1. Fault in the breakup of the marriage.
  2. The relative education of the spouses.
  3. The employment, earning capacity, and business skills of the spouses.
  4. The age and physical conditions of the spouses.
  5. The financial obligations of the spouses.
  6. The existence and value of the separate estates of the spouses, including any expected inheritances.
  7. Whether the nature of a particular piece of property might benefit one spouse over the other.
  8. Whether a spouse wasted community assets.
  9. Whether a spouse provided temporary support.
  10. Whether there were any excessive gifts by one spouse to the children or another person.
  11. Needs of any adult children residing with either spouse.
  12. The tax consequences of any property division.
  13. Whether either spouse committed fraud on the community estate.
  14. Which spouse will have primary custody of any minor children.
  15. The behavior of the spouses during the divorce proceedings.
  16. Whether either spouse’s separate property was a source of income creating the community estate.
  17. The existence of any reimbursement claims.

What are reimbursement claims?

To understand a reimbursement claim, you must first understand that there are three estates in any divorce proceeding.

The first is the community estate consisting of all community property. The second and third estates are each spouse’s separate property estate.

It is not uncommon during a marriage, for one of the estates to provide funds that are used to benefit or improve another estate.

For example, one spouse might sell his or her separate property residence after the marriage and use those funds as a down payment on a new marital residence.

Another common example is that the spouses may spend their community income during the marriage to make improvements to a residence or other property that one spouse owned prior to the marriage.

At the time of divorce, the contributing estate may have a claim to recover those funds or some portion of those funds against the estate that received the benefit of those funds. This is called a reimbursement claim.

Key Issues When Dividing Property in a Texas Divorce

In any case, there are four key issues when it comes to dividing property in a divorce case:

  1. Identifying the property.
  2. Characterizing the property as community property or separate property.
  3. Locating the property (things sometimes disappear while the case is pending).
  4. And last, valuing the property.

If you would like to schedule a free consultation to discuss your divorce case, then please send me an e-mail or send a request through my contact page.