Protecting Your Assets In A Divorce: Strategies For Residents Of Harris County

In this article, you can discover…

• What marital assets are, and the role they play in divorce.
• How to hold onto your personal property in a divorce.
• The benefits of mediation in protecting your assets in a Texas divorce.

What Are Marital Assets?

In simple terms, marital assets are the things you and the other party have acquired during your marriage. Since Texas is a community property state, anything bought, earned, or obtained while you were married is generally considered joint property. This typically means both you and your spouse are presumed to own it equally, no matter who earned or purchased it.

There are, of course, exceptions. If you can provide proof—such as receipts, financial records, or other evidence—they might be able to show the court that a particular asset is not marital but instead your separate property. Examples of separate property might include:

• Property owned before marriage.
• Inheritances or gifts received by one spouse during the marriage.
• Assets specifically protected by a prenuptial or postnuptial agreement.

How Can I Ensure My Separate Property Stays Separate During Divorce?

Keeping your property truly separate during a divorce can be challenging, but it’s essential to ensure that what is legally yours stays that way. In Texas, separate property includes anything you own before entering a marriage, inheritances you receive, or gifts given exclusively to you. Any assets explicitly protected by a prenuptial or postnuptial agreement also qualify as separate property. Here are some ways to maintain separate status:

Avoid Mixing Separate And Marital Assets

If you have a bank account or other financial asset that you brought into the marriage, keep it separate. Do not deposit money earned during the marriage into that account. Doing so will commingle funds and make it far more difficult to get them sorted out should it ever be necessary. Once funds are mixed, it can become incredibly difficult to prove what portion is yours.

Be Prepared To Trace The Origin Of Your Assets

If you use separate funds to purchase a property or asset during the marriage, keep clear records showing where the money came from. For example, if you bought a car with money you had before the marriage or received it as a gift, maintain documentation that clearly ties the purchase to your separate bank account or inheritance.

Be Cautious With Joint Accounts

When you add your spouse to an account or asset, it often converts into marital property. For example, if you owned a bank account before marriage but added your spouse’s name to it later, that account may now be considered community property. Be mindful of this and act accordingly.

Document Inheritances And Gifts

If you receive an inheritance or gift during the marriage, keep the funds or assets separate. Deposit funds into an account solely in your name, and avoid using those funds for shared marital expenses.

Understand Real Property Issues

Real estate is perhaps the most common and dramatic point of contention in divorce. If you owned a property before marriage, maintain clear records of ownership. If marital funds were used to pay the mortgage, make improvements, or cover taxes, your spouse can claim a portion of the property’s value.

Be Prepared To Provide Evidence

In Texas, the court relies heavily on the date of acquisition to determine whether an asset is separate or marital property. Be ready to show:

• Bank statements, purchase receipts, or other documentation proving the source of funds.
• Evidence that an asset was acquired before the marriage or gifted exclusively to you.

Rachael Aminu, a skilled family law attorney and founder of Aminu Law Firm, PLLC in Texas, has extensive experience navigating complex property division cases. Her deep understanding of Texas’s community property laws means she can help protect your rights and secure fair outcomes during divorce proceedings, ensuring you’ll feel empowered and well-prepared throughout your case.

If you’re facing property division challenges, you can trust Rachael Aminu and her team to guide you every step of the way. Contact Aminu Law Firm, PLLC today to schedule a consultation.

Get your questions answered - Request a phone consultation now! Call (832) 937-4039

How Can I Ensure My Separate Business-Related Property Stays Separate In A Texas Divorce?

For business owners in Texas, protecting a business as separate property during a divorce can be a complex process, particularly if the business grew or changed during your marriage. Here are some key things to keep in mind if you ever find yourself in this situation:

Understand How Separate Property Is Defined For Businesses

If a business was started before the marriage, it is generally presumed to be separate property. For example, if you started a business in 1998 and married in 2000, it would likely be considered separate property. Complications can arise when:

• The spouse becomes involved in the business, namely via contributing time, skills, or effort.
• Marital funds are used to support or grow the business.
• The value of the business increases significantly during the marriage.

In these instances, the non-owner spouse may have claims for reimbursement or even a share of the business.

Avoid Mixing Marital Efforts and Funds

If the non-owner spouse contributes to your business during the marriage—whether as a co-owner, manager, or unpaid worker—they could claim a portion of your business’s value. Additionally, using marital funds to support the business, whether it be to do things like paying for supplies, rent, or expansion, can create a claim for reimbursement.

Create a Post-Marital Agreement

One of the most effective ways to protect your business as separate property is through a post-marital agreement. This document clearly establishes the business as your separate property and outlines any financial arrangements if the marriage ends. For validity:

• Both spouses must agree voluntarily.
• The agreement must be in writing, signed, and preferably notarized.

Maintain Clear Business Documentation

Ensure that all business records reflect sole ownership. This includes:

• Certificate of Formation or Articles of Incorporation clearly stating sole ownership.
• Operating Agreements or partnership agreements showing ownership percentages.
• Keeping business finances completely separate from personal or joint accounts.

Document Any And All Contributions

If the non-owner spouse contributes to your business, document their role and whether they were compensated. Uncompensated efforts could lead to claims during divorce proceedings.

Be Prepared For Claims To Be Brought Against The Business

Even if a business was started before you entered marriage, the court may consider how the non-owner spouse’s indirect contributions benefited the business. Courts have the discretion to award:

• A reimbursement claim.
• A percentage of the business’s value or dividends, depending on the circumstances.

How Does Texas Law Treat Retirement Accounts During A Divorce?

Retirement accounts are oftentimes a central part of property division in a Texas divorce. With that, they can be among the more complex assets to divide. Keep the following in mind regarding how Texas law addresses them:

Community Or Separate Property

Texas is a community property state, which means that retirement account contributions made during the marriage are generally considered community property, regardless of whose name is on the account. Contributions made before the marriage or after the date of separation are typically classified as separate property.

Common types of retirement accounts include:

• 401(k) plans
• 403(b) plans (often for teachers and medical professionals)
• Roth IRAs and traditional IRAs
• Railroad retirement accounts
• Pensions

Factors Considered By The Court

When dividing retirement accounts, Texas courts evaluate several factors, including:

• The account holder’s name and employment status.
• The length of the marriage.
• The contributions made to the retirement account during the marriage.
• Whether both spouses have retirement accounts and the value of each.

QDROs

A Qualified Domestic Relations Order (QDRO) is often required to divide certain types of retirement accounts, such as 401(k)s and pensions. They specify the division of funds and provide instructions to the plan administrator, typically a large financial institution.

A best practice you may find helpful is to draft and submit the QDRO alongside the divorce decree to avoid the need for separate court proceedings later. Some investment companies may not require a QDRO, but it’s a critical document for many types of accounts.

Similarly-Valued Accounts

If both you and your spouse have your own retirement accounts with similar values, the court may allow each of you to retain your accounts without dividing them further. Yet, if one of you has a significantly larger account, the other party may be entitled to a portion of it.

Optimal Timing And Execution

If your QDRO isn’t addressed and filed during the divorce proceedings, the process of obtaining one after the divorce can be more time-consuming and costly. Delays may affect your ability to access your share of the funds.

Plan Administrators And Division

Plan administrators play a vital role in the division of retirement accounts. They review the QDRO to ensure compliance with federal and plan-specific rules before executing the division. Working with third-party services that specialize in QDRO drafting can simplify this process and ensure accuracy.

Rachael Aminu, a skilled family law attorney and founder of Aminu Law Firm, PLLC in Texas, has extensive experience navigating complex property division cases. Her deep understanding of Texas’s community property laws means she can help protect your rights and secure fair outcomes during divorce proceedings, ensuring you’ll feel empowered and well-prepared throughout your case.

If you’re facing property division challenges, you can trust Rachael Aminu and her team to guide you every step of the way. Contact Aminu Law Firm, PLLC today to schedule a consultation.

Get your questions answered - Request a phone consultation now! Call (832) 937-4039

How Can Mediation Help Protect My Assets In Divorce?

Mediation can be a valuable tool for protecting your assets during a divorce by providing a structured, less contentious environment where you and your spouse can work toward a mutually agreeable resolution.

Mediation allows both of you to discuss and negotiate the division of assets, focusing on the strengths of your case. Unlike a court trial where decisions are made by a judge, mediation gives you much more control over the outcome, lending itself to reaching agreements that suit your unique circumstances much better.

Before mediation, thorough preparation is essential to protect your assets. This includes discovery, where you’ll need to conduct a detailed review of your assets, including property, vehicles, retirement accounts, investment accounts, and other significant items like boats or even planes.

Completing a sworn statement listing all known assets acquired during the marriage provides a clear starting point for discussions and ensures transparency. In Texas, courts in counties like Harris, Fort Bend, and Montgomery often require this form to be filed. It serves as an official declaration of marital assets and helps ensure that hidden or undisclosed properties are accounted for.

This means mediation can empower you to uncover discrepancies or hidden assets that your spouse may have acquired during the marriage without your knowledge. A thorough inventory and appraisement, coupled with limited discovery, can reveal such attempts and ensure a fair division.

What Are Some Benefits Of Mediation Over Litigation?

Mediation offers a practical and efficient alternative to litigation, especially in emotionally charged matters like divorce or property division. It provides several benefits over taking your case to court.

While Texas law requires a just and fair division of assets, this doesn’t necessarily mean a strict 50-50 split, despite what most people may think. Mediation offers the freedom and flexibility to consider:

• Contributions of each spouse to the marriage.
• The presence of fault-based grounds like adultery or abuse.
• The unique needs or circumstances of each party.

More than this, mediation gives you the flexibility to negotiate terms. You’re not confined by rigid legal standards or court-imposed solutions, allowing for more creative and personalized agreements.

Unlike seeking a resolution to your divorce in court, where your story is limited to the answers you provide during questioning, mediation allows you to actively participate in the process. It’s your chance to share your perspective and negotiate terms that work best for you without being constrained nearly as much as you would be in court.

On top of this, in court, the judge—neutral, yes, but someone entirely unfamiliar with your family or personal dynamics—makes the final decision based solely on evidence and legal arguments. If you lack compelling evidence or fail to present a strong case, there is a good chance you will lose control over the outcome. Conversely, mediation empowers you to craft your own agreement, greatly reducing, if not eliminating, the unpredictability of a trial.

Mediation is far more time- and cost-effective than litigation. By resolving disputes outside of court, you avoid:

• Expensive trial preparation.
• Lengthy courtroom proceedings.
• Additional legal fees.

A court trial can take months or even years to conclude, whereas mediation can often resolve disputes within three to six months. This quicker timeline helps you move forward sooner and avoid prolonged stress.

Mediation is also a private process. This confidentiality can be particularly beneficial for protecting sensitive information about your assets, ensuring that details about finances, properties, or business interests remain out of the public record.

A mediated settlement agreement is binding and enforceable, offering you the clarity and finality you want after a divorce. However, once signed, the agreement cannot be revoked or easily modified. This ensures both of you are committed to the terms. This facilitates the process overall being far more stable and as amicable as possible.

Still Have Questions? Ready To Get Started?

For more information on Protecting Your Assets In A Divorce, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (832) 937-4039 today.