- December 13
- Evans & Herlihy
- Family Law
Even an amicable divorce can be a complex matter if a couple has accumulated a lot of assets during their marriage. As you begin the process of dividing these assets, you may have several questions about which assets should be included in the division and which ones are off the table.
Many divorcing couples ask, “How do I prepare my assets for divorce?” A qualified and experienced divorce attorney can help you to list your assets and get everything you’re due, but there are a few tips you should know going into the process.
What Assets Should Be Included in a Divorce?
Let’s start by defining what counts as an “asset.” For the purposes of the division of property, an asset is any item that can be converted into cash, which is to say, anything that has monetary value. This is different from items of sentimental value.
When you’re trying to figure out how to list assets for divorce, you’ll want to start with shared assets, also known as community property. This typically includes any assets that you and/or your partner have amassed during the marriage.
In some cases, it may also include items you owned before the marriage but subsequently commingled as part of your joint marital property.
Community assets could include:
- Financial accounts
- Real estate
- Other tangible assets
Below, we’ll explore each of these categories in depth.
The average couple has any number of financial accounts that are considered to be community property, starting with joint and personal bank accounts.
You might think that a personal account would remain your own, but if earnings have gone into the account during your marriage and/or you’ve used the account to pay for joint expenses, it is considered to be commingled.
Retirement accounts like a 401K or IRA are also considered to be community property, but only the portion that was earned during the marriage.
Any investments made during the course of your marriage will likely need to be listed as assets in your divorce, including a portfolio of stocks, bonds, mutual funds, and so on.
If you or your spouse purchased life insurance, it could be considered a marital asset, even if your spouse is not listed as the beneficiary on the policy.
Annuities purchased during your marriage are considered to be community property, but those purchased prior to marriage may not be if no party made premium payments during the course of your marriage. For that reason, annuities are something that you’ll want to discuss with your divorce attorney.
Real estate, particularly the primary residence, often serves as the biggest asset couples have to split during a divorce. If this is your only major asset, you should prepare for the fact that you may have to sell it and split proceeds with your spouse or, alternatively, pay them their portion of fair market value if you want to retain your residence.
Other real estate that is considered community property could include secondary residences, like vacation homes, income properties (rentals, Airbnb properties, etc.), and land.
Other Tangible Assets
During the course of your marriage, you may purchase all kinds of tangible assets, including vehicles (cars, motorcycles, boats, etc.), jewelry, art, antiques, collectibles, and more. Items like heirloom furniture that one spouse brings into a marriage may be considered to be personal property during the divorce, along with any gifts like jewelry. In the state of Texas, for example, an engagement ring is considered to be the property of the recipient.
How Do I Prepare My Assets for Divorce?
Arrange for Valuation, if Needed
Now that you have an idea of what should be included in your assets for division, you might be wondering, “How do I prepare my assets for divorce?” The first step you might need to take is to is determine each asset’s value.
In some cases, as with bank accounts and investments, this may be as easy as looking at the most recent statement. As for real estate, vehicles, art, and other assets that may fluctuate in value, an appraisal may be necessary.
Oftentimes, some amount of swapping occurs during the division of assets, since Texas requires that community property be divided more or less equally in a divorce. However, if a couple simply can’t agree on who gets what or one party wishes to retain a piece of property, valuation can determine a buyout amount for the monetary value of an asset that is legally due to the other party.
Are Debts Included When Determining How to List Assets for Divorce?
When it comes to how to list assets for divorce, you can’t forget to account for debts, as well. Some debts, like a student loan, may be considered to be a personal debt, if it was incurred prior to marriage, but it may be counted as marital debt if it was incurred during the course of the marriage.
Other loan types are also included in marital debt; but where assets like property, vehicles, and so on are concerned, remaining debt may pass to whoever is awarded the asset. Credit cards and other types of marital debt will most likely be split between both parties.
What Won’t Be Included in Divorce Assets?
In addition to determining what assets should be included in a divorce, you need to know which ones will not be included as community property.
In most cases, the only assets that are not included as part of marital property are items that were in the possession of one party or the other prior to the marriage. This could include personal assets, like property, jewelry, art, and so on, owned prior to marriage. However, it could also include assets gifted to one party during the marriage, provided they were not commingled.
The same is true for inheritance. As long as it remains separate, it could be considered personal, rather than community property. However, in the state of Texas, an inheritance becomes community property when it is commingled with joint finances.
If you have a prenuptial agreement, any assets listed therein as personal property in the event of divorce would not be included in the division of assets.
Experienced Legal Support for Divorce
Our Attorneys Can Explain How to List Assets for a Divorce
If you’re looking for an experienced Texas divorce lawyer to offer legal guidance, representation, and support throughout your divorce, the qualified and compassionate attorneys at Evans & Herlihy are ready to help. We can discuss the details of your divorce and how a division of assets may work as your divorce proceeds. Contact us today or call our office at (512) 732-2727 to schedule a free initial consultation.