One of the major tasks divorcing couples face is how to divide their assets and debts. Under Texas law, all property accumulated during the marriage is presumed to be community property which is owned equally by both parties. The same principle applies to accumulated debt. The first step a divorcing person needs to take is to make an inventory of all their assets and debts.
The Inventory of Assets and Debts
The inventory of assets and debts should include:
- A list of all real estate owned.
- All automobiles.
- All bank accounts, including both checking and savings.
- Investment and retirement accounts, including IRAs and 401(k)s.
- Insurance policies and annuities.
- Other items of value such as jewelry, antiques, art, guns, collections, and any other item of value.
A similar list is made of debts. One needs to list real estate mortgages, vehicle loans, student loans, credit card balances, and any other debt the spouses have. The next step is to put a value on each asset.
At the end of this list, each spouse will list their separate property. Separate property includes assets a party owned prior to the marriage and assets one acquired during the marriage via gift, inheritance, or personal injury award. Separate property must be acknowledged and reaffirmed by agreement or by the Court.
Working Together to Divide the Property and Debts
The asset division can be determined in several ways:
- Negotiation. The spouses along with their attorneys can work together to come to an amicable agreement about how the property and debts should be divided.
- Mediation. The parties and their attorneys meet with a mediator who acts as a go between for the spouses to assist in coming up with an agreement to divide the assets and debts.
- Court intervention. If the spouses cannot agree on asset values, characterization of the property, or on a fair division of assets and debts, the Judge will decide. The spouses will go to trial, will present their inventories and explain why their proposed property division is fair. The Judge will review the evidence and ultimately decide which spouse will be awarded which assets and be responsible for which debts. Judges start with the presumption that the marital estate should be divided equally between the husband and wife.
Whether the spouses can agree without court intervention or the Judge decides, the division of assets and debts is written up in a Divorce Decree and filed with the court. This becomes the Court’s final order.
Whittemore Law Firm is dedicated to helping clients navigate difficult family law issues. Whittemore Law Firm serves clients in The Woodlands, Conroe, Montgomery County, Houston, Harris County, and throughout the surrounding area. If you need help, Whittemore Law Firm can help you protect your rights and the rights of your children. For a free 20-minute consultation, contact the Whittemore Law Firm at 832-215-3706