Because divorce can be an extremely difficult time for both parties, it’s easy to fall into the mindset of “just get it over with.” When you sign a quick agreement to hurry up and finish a divorce proceeding, you may end up losing a significant amount of assets that could greatly impact your life later. This is particularly true of women with children who are at a significant financial disadvantage and can also result in the loss of valued property and precious possessions.
These are some of the pitfalls that you should be wary of in a divorce proceeding.
Yours, Mine, And Ours
Texas is a community property state, meaning that nearly anything acquired during the marriage is considered marital property, with a few exceptions. However, this doesn’t mean that the division will be equal or equitable.
There are two kinds of property in a divorce:
- Separate property, which includes property acquired before marriage, a gift or inheritance during the marriage, and a legal settlement such as a personal injury case.
- Marital property, including the family home, vehicles, earned income, debts, as well as other property and assets.
If one party owns rental property prior to the marriage, but uses the profit generated from the rental to pay joint bills such as the marital home, the funds will become marital property, and possibly the rental property.
One issue that complicates property division is the comingling of separate and marital funds, such as depositing an inheritance into a joint marital account or using it to pay marital debts. At this point, the funds become community property and will be considered community property. It is possible to recover the “separate” possession of the property in a divorce by making a claim for reimbursement.
Even with considerable marital assets, the division isn’t always “equal.” The judge takes into consideration factors about both parties, particularly if one is economically disadvantaged due to age, health, separate assets and liabilities, and their education, vocational skills, and earning abilities. A judge may also award assets unequally due to one party acting as the other’s caretaker, or if one party intentionally worked to deplete the marital property
Retirement Assets
Retirement assets are also considered community property, but companies that administer retirement accounts are not required to abide by divorce orders awarding a former spouse any retirement income. Therefore, couples are required to submit a document called the Qualified Domestic Relations Order (QDRO) to ensure that any retirement funds and assets are properly divided.
Because these are complex and difficult, it’s best to have your attorney create a QDRO ahead of time, submit it to the pension plan and make sure it’s approved by the plan’s administrators before finalizing the divorce. Otherwise, you may be required to go back to court to change the terms of the divorce later.
Update Your Estate Plan
Many times after a divorce, people forget to update their wills and estate plans. What happens next is that a former spouse is given some—if not all—of the marital property when one party dies or becomes incapacitated.
If one party is unable to speak and/or care for themselves, and assigned healthcare power of attorney names the person who will make medical decisions for them. If that party is remarried, the previous spouse will be that person making decisions, leaving the current spouse out.
If the will and estate plan aren’t updated, the subsequent spouse will receive nothing out of the estate, even though the deceased never intended for the first spouse to receive anything. This could lead to a long, drawn-out court battle that sees the deceased’s assets depleted in legal fees and litigation.
Pets In A Divorce
This seems like a trivial issue to some, but it isn’t to those with beloved pets. Texas pets are considered part of the property division, but more and more, couples are unable to settle the issue of who gets Fido or Fluffy on their own. No one wants the animal abandoned when everything is all over, so it’s important to make sure the pets are taken care of.
If a couple can’t decide, a judge may make the decision for them based on factors such as who cared for the animal and whether the pet was a gift from one to the other, or if the decision to adopt was a joint decision. Your divorce attorney can also work with you to draft an agreement that is amenable to both parties.
Get Help From Wendy L. Hart With Property Division In Fort Worth
Wendy L. Hart is an experienced family law attorney helping people throughout Tarrant County are facing property division and other divorce-related matters. Wendy understands the process as well as the difficulties involved and will work to make sure your property division is done fairly. Representing both for men and women, Wendy will make sure you’re treated fairly, protect your interests and those of your children.
Visit our Mansfield office, use our online contact form, or call us at (817) 842-2336. We’re ready to help.
