Besides dealing with child custody, one of the most sensitive aspects of the marital dissolution process is dealing with finances. This is especially true for those who have major investments in business ventures, real estate, mutual funds and stocks, as the divorce process can drastically impact their net worth. Here is a look at how the asset distribution process is handled in Texas.
Texas is one of nine states that follow the community property principle. According to this principle, two people who are getting divorced must split their assets 50/50 when they get divorced. This is the opposite of what happens in the other 41 states, which follow the equitable distribution principle. In an equitable distribution state, asset division is much more subjective, with the divorce court looking at factors like the spouses’ personal needs and the length of their marriage to decide how to divide their assets.
However, in all states, marital assets are treated differently from separate assets. Separate assets refer to any assets acquired before a couple got married, whereas marital assets are acquired during a marriage. Separate assets are protected from asset division during a divorce proceeding.
A mistake that some people in Texas make when it comes to asset division is to simply let the matter play out. When divorcing individuals do this, they can easily lose control of the situation because their divorce proceedings may begin to unravel. Instead, it is wise to consultant an attorney early on in the divorce proceeding to receive the guidance need to address asset distribution with confidence in the Lone Star State.