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Houston Preserving Separate Property Lawyers

Retaining separate property in a divorce settlement is often a high priority, as it is all too easy for funds and holdings that are separate from marital property to become depleted during the course of the divorce, resulting in serious adverse financial effects for one or both parties. Protecting this property requires a clear understanding of the laws which define marital and separate property, as well as how your actions during your marriage or over the course of the divorce can affect these holdings.

Without knowledgeable and experienced guidance from a Houston asset division attorney, many individuals are shocked to discover that their individual and separate property becomes part of the divorce settlement due to factors of which they were unaware. To learn more about how to protect yourself against such losses, call Holmes, Diggs & Sadler today at (713) 802-1777.

What are the Different Types of Property?

Property, or assets, are divided into two general types: community and separate. Separate assets are investments, properties, funds, and possessions you own independently. That typically includes assets you owned before you got married or anything you inherited, received as a gift, or acquired with your personal funds.

Texas law states that community property includes assets either person acquires during the marriage. Items such as vehicles, properties, and retirement accounts purchased through shared accounts that both spouses use or have access to are community property. Even if you bought something on your own, it’s still community property if it’s an asset purchased while you’re married.

How Property is Evaluated During a Divorce

When it comes to property division, the court doesn’t follow the same set of rules for everyone. Each couple, and every individual, is different. How each separate and community property gets divided depends on each person’s life circumstances, such as economic standing, and the length of the marriage.

In Texas, property must get divided in a manner that is equitable, meaning 50/50, in most situations. The court might determine equitability based on who was at fault for the marriage ending, differences in earnings between the two, each person’s health, who has custody of the children, and both party’s education and ability to become employed in the future.

How Separate Property Is Depleted

Although both spouses will bring their own individual assets into the marriage, if these assets are not kept separate and distinct, they are considered to be community property under the doctrine of commingling, granting each spouse equal entitlement to the funds. Property which is clearly separate can become depleted or made into community property in the following ways:

  • Paying for marital living expenses with separate property rather than marital property
  • Commingling separate property with marital property to the point that they are indistinguishable
  • Failing to fully identify separate assets through asset tracing before using separate property from a commingled asset

A skilled attorney will be able to offer guidance and strategies to protect your assets from depletion through commingling, giving you a better opportunity to retain this property at the completion of the divorce rather than committing a certain percentage of the assets to settlement.

How Do I Keep My Separate Property Separate?

Commingling assets always causes problems for divorcing spouses. It’s difficult to distinguish which property is separate and which both parties share. In a Texas court, there’s the presumption that all property in possession by the couple when they file for divorce is community property.

If you want to avoid losing any part of your separate assets, you could hire a forensic accountant. A forensic accountant’s main job is to review each spouse’s assets to determine which are separate and which are community. They could also search for any undisclosed assets you didn’t know existed.

Is My Spouse’s Pension or Employment Benefits Separate or Community Assets?

If someone accumulates interest from retirement, pension, profit-sharing, or additional benefit through their employer during the marriage, it’s community property in a divorce. A court could potentially award a portion of the retirement fund to the other spouse. If there’s a division of that particular asset, the employer would distribute the benefits according to the court’s order.

In a situation where there’s a cash account, such as a 401k, the employer ends up disbursing the funds to the other individual within 30 to 90 days of notice. Retirement benefit payments usually begin based on a court order sent to the employer.

Unlike most community property assets, it’s not a requirement to divide pension and retirement accounts equally between both spouses. If each person has separate accounts, the court will likely allow them to keep those accounts and not split them.

What if One or Both of Us Owns a Business?

Generally, a corporation is its own entity and falls under the category of separate property. During a divorce case, the court handles the division of any spouse’s interest in a corporation, and the remaining property remains separate. However, the exception to this rule is the existence of an “alter ego.”

Under certain circumstances, a business may be considered the owner’s alter ego if the court determines there’s no distinction between it and the spouse who owns it—if, for example, there’s an intermingling of business and personal funds. Additionally, if the company damaged the marital assets beyond repair, that would also fall under the alter ego exception. This often occurs when someone’s personal business funds their family’s entire income.

Contact Us

At Holmes, Diggs & Sadler, our experienced Houston divorce lawyers are committed to providing knowledgeable and effective counsel to our clients, protecting their rights and interests over the course of a divorce.

The Houston divorce lawyers from Holmes, Diggs & Sadler are ready to answer your questions. We’ll review all your assets and advise you on your best course of action moving forward. We’ll use the full weight of our experience and resources to protect you throughout the divorce process. For a consultation to discuss the details of your case, call us today at (713) 802-1777.

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Holmes, Diggs & Sadler
5300 Memorial Dr #900
Houston, TX 77007
Phone: (713) 802-1777
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