Can You Divorce Without Splitting Assets in Texas?

Divorce can be a complex and emotionally charged process, especially when the prospect of dividing significant assets is involved. One of the most pressing concerns for individuals with substantial wealth is whether they can divorce without splitting their assets. This blog explores the intricacies of asset division in Texas, focusing on property sharing, the impact on family-owned businesses, and the specifics of the divorce decree in Texas. If you have questions about an anticipated divorce or want to learn more about your legal options, a qualified Texas asset division attorney can help.

How Is Property Shared After Divorce in Texas?

Texas is a community property state. Most property acquired during the marriage is considered community property and is subject to division upon divorce. Community property generally includes income, real estate, and personal property obtained while married. The law presumes that nearly all assets acquired by either spouse during the marriage are community property unless proven otherwise.

Equitable Division

In Texas, the court aims for a “just and right” division of community property, which does not necessarily mean a 50/50 split. Instead, the goal is for both parties to have an equitable division of assets acquired during the marriage. When dividing community property, the court considers several factors, including:

• The length of the marriage
• The earning capacity of each spouse
• The age and health of each spouse

Separate Property

However, Texas law also recognizes separate property, which includes assets acquired before the marriage, gifts, inheritances, and specific personal injury awards. To avoid splitting these assets, an individual must provide clear and convincing evidence that it is separate property, such as:

• Records of inheritance, such as a last will or trust
• Separate bank accounts to prove that marital funds did not co-mingle
• Prenuptial agreements in which both parties agree before marriage that these assets are not community property in the event of divorce

Family-Owned Business and Divorce

For married couples who also own a business, splitting assets can be complex. An experienced family law attorney can help couples through the process, which might look like this:

• Determine the Value of the Business — The first step in dividing a family-owned business is determining its value. To make the determination as fair as possible, consult a professional business valuation expert. They consider all factors, such as assets, debts, income, fair market value, and future earning potential. 

• Consider the Impact on Business Operations — A contentious divorce can negatively impact a family-owned business. To avoid a significant revenue loss and preserve the company’s reputation, spouses should consider less harmful options than a drawn-out court battle. One spouse could buy out the other’s interests. They could sell the business and split the proceeds. They could decide to remain business partners despite being divorced. 

• Take Steps to Protect the Business — Ideally, a married couple who owns a business could reduce potential conflicts with a prenuptial or postnuptial agreement. These are valuable when both individuals desire to protect the family-owned business or leave it intact for their children or grandchildren. 

• Consider Tax Implications and Legal Matters— Divorcing couples who co-own a business must also consider the tax implications of their divorce on the business. Proper tax planning is crucial to minimize tax liabilities during the asset division process. This involves understanding how different scenarios, such as selling the business or transferring ownership, could impact personal and business taxes. Additionally, both parties, their attorneys, and a tax advisor should coordinate to manage the financial and legal aspects to ensure a smooth transition and avoid future disputes. 

What Types of Assets Are Divided in a Divorce?

Each situation is different, but many high-income couples have a long list of accumulated assets to divide in a divorce:

• Real Estate — Homes, vacation properties, investment properties, land, and timeshares
• Bank Accounts — Checking, savings, credit cards, mortgages, vehicle loans, personal loans, and other lines of credit
• Investments — Stocks, bonds, mutual funds, and other investment accounts
• Retirement Accounts — 401(k)s, IRAs, pensions, and other retirement savings plans
• Vehicles — Cars, trucks, boats, airplanes, RVs, and motorcycles
• Livestock and Pets — Livestock, horses, exotic animals, and pets 
• Personal Property — Jewelry, artwork, furniture, electronics, clothing, musical instruments, and family heirlooms
• Collectibles — Antiques, coin collections, stamp collections, and other valuable collections
• Intellectual Property — Patents, trademarks, copyrights, and royalties
• Insurance Policies — Life, health, home, and vehicle insurance policies
• Digital Assets — Cryptocurrency and digital media libraries
• Income and Benefits — Current and future income streams, bonuses, and veterans benefits

Understanding the Divorce Decree in Texas

The divorce decree is the court’s final order that legally ends the marriage and outlines the terms of the divorce. It is legally binding and enforceable, meaning both parties must adhere to its terms. In Texas, the divorce decree includes:

• Property division 
• Spousal support
• Child custody and support

Modifying the Decree

Post-divorce, circumstances may change, necessitating modifications to the divorce decree. Texas law allows for modifications, but they require demonstrating significant changes in circumstances. For instance, if one spouse experiences a substantial change in income, they may request a modification to spousal support or child support orders. The court will review the case and determine whether the changes warrant an adjustment to the original terms.

Enforcing the Decree

If a spouse fails to comply with the terms of the divorce decree, Texas courts can enforce the order through various means, including wage garnishment, property liens, and even contempt of court charges. Ensuring compliance with the decree is crucial to protecting each party’s financial interests post-divorce. In extreme cases, the court may impose additional penalties to compel adherence to the decree.

Call a Texas Divorce Attorney Today

Texas has a community property law that can make splitting significant assets a challenge. An attorney experienced in both family law and business transactions can provide invaluable guidance to help protect both the business and each spouse’s financial interests throughout this intricate process. 

At Balekian Hayes, PLLC, we focus on assisting families through the legal complexities of high-net-worth divorce, custody, paternity, spousal support, and more. With decades of legal experience and attorneys who are board-certified in Family Law and Child Welfare by the Texas Board of Legal Specialization, we can help you achieve an equitable outcome in a Texas divorce. Contact us today for a confidential consultation.