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Tips on How to Protect Your Assets in a Divorce


When you decide to get divorced, your mind is likely inundated with questions and concerns. What will happen to your home? What about your business and investments? What about your retirement benefits and pension plan? These are extremely important questions that need to be answered. In most divorce cases, these questions are addressed during negotiation or mediation with your soon-to-be-ex-spouse and their legal counsel. 

Understanding Separate and Community Property

The first step in addressing how assets will be divided in a divorce is to determine whether the asset is separate property or community property. This is because Texas is a community property state. All property is owned by the community estate unless you can show that the property or asset is owned by you or your ex-spouse separately. Under Texas law, when two people marry, a community estate is automatically created and is owned by both you and your spouse.

Common types of separate property include:

  • property owned by you prior to marriage;
  • property that was gifted to you (e.g., car from your parents); or
  • property that you inherited.

In order to protect your separate property, be sure to keep detailed financial records during your marriage and try to avoid commingling with community property. 

How Commingling Can Turn Separate Property Into Community Property

When community property and separate property are mixed together (i.e. commingled), it can get to the point where proving which property is separate and community is virtually impossible. If you cannot prove your asset is separate property, then a court will consider it to be community property and divide it equitably.

For example, let’s say you have a 401k that you opened prior to getting married. You make contributions to the 401k during the marriage. These contributions are considered community property, not separate property, even though the account was opened prior to the marriage.

Another example is when you purchased a home prior to your marriage, but your spouse moves in and it becomes your marital residence. During the marriage, both you and your spouse make payments on the mortgage. This means the reduction in the mortgage balance and/or increase on home value can be claimed as community property.

If you and your spouse decide to start a business prior to the marriage, dividing the ownership interest and other aspects of the business can become quite tricky. The distinction between separate and community property in the context of a business will likely depend on the articles of incorporation, the business structure you decided to use (e.g., partnership, LLC, S-Corp, etc.). Given the complexities of the situation, it is highly recommended that you speak to an experienced Houston divorce lawyer.

Speak to a Houston Divorce Lawyer Today

As you can see, dividing property during divorce can become complex and create friction between you and your soon-to-be-ex-spouse. This is why you need to retain the services of Lindamood & Robinson, P.C. Our legal team is here to help. We are comprised of skilled Houston divorce lawyers who can meet with you when you are ready and discuss your legal options and strategies. Contact our office to schedule a consultation.



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