What Is Needed to Prepare for a Texas Divorce?
Many stressed couples wait until the New Year to file for divorce. For many the relationship strains of the holidays may be the last straw. For others waiting until January is a matter of convenience or for the sake of the children. January has traditionally been the month with the most divorce filings.
Those considering divorce must start to gather and make copies of financial documents. A clear picture of all the family assets will be required before any Texas property division can be determined. All assets must be documented in order for them to be considered in the property settlement.
Concerns Regarding Missing Assets
Generally, spouses are not able to hide a large amount of assets; however, many ways exist to keep assets out of the property settlement.
One of the most common ways is to move money from a joint bank account into a new sole account at a bank located in another city. Other ways to hide money include: buying collectibles, purchasing savings bonds, or investing in an offshore or a shell corporation. An overpayment to the IRS may also be a way to reduce apparent income, with the knowledge a tax refund will come after the divorce is final.
An employer may even help a soon-to-be ex-spouse by delaying a bonus, stock options or a raise. Municipal bonds and Series EE Savings Bonds do not provide statements and are not registered with the IRS, thus provide an easy place to hide money.
Divorces involving business assets can be even more complicated. When family companies are involved or one spouse owns a company, it can be harder to get a true account of his or her income and assets.
Marital assets can easily be disguised in the business setting. Cash may be skimmed, money may be paid to someone who never worked for the company or lucrative business contracts might be delayed until after the divorce is final. These tactics lower the value of the business or reduce income, but are generally considered as hiding assets.
If a spouse is intent on hiding assets it may difficult to find hidden bonds or dishonest business accountings. However, gathering and copying all financial documents will provide a first glimpse of overall assets.
Prepare an Asset Checklist
An inventory of assets will be needed. Certain assets will require more detailed information, such as, real estate. The following list can be used as a starting point and may be compiled in a spreadsheet format for ease of use:
- Real Estate - Obtain the legal description, address, approximate fair market value. How is the property owned, when was it purchased and for how much? Who made the down payment and how much is currently owed on the property?
- Bank Accounts - What is the type of account, the name of the bank and account number and name(s) on the account? When was the account opened? What is the current balance?
- Automobiles, motorcycles, boats, etc. - What is the year, make and model, whose name is on the title, who drove the vehicle? Is there a loan balance?
- Furniture - Describe the pieces, their condition and when purchased. Are there any outstanding loan balances?
- Paintings, Antiques and collectibles - Again, it is important to describe the item and when it was purchased. If you do not know the fair market value, an appraisal might be needed.
- Insurance - What is the type of policy, the policy number, name of the insured, beneficiary? When was the policy purchased? Is there any loan balance that was taken out against the policy?
- Stocks - What is the name of the company, number of shares, what type of shares (preferred, common or other), and how much were they purchased for? What is current value of the shares, and whose name is on the title?
- Bonds - What type, date of maturity, what is the face value? Whose name appears on the bonds?
- Pensions, 401 (k), IRA - What are the pension rights, what are the account numbers and the amount of money vested in the accounts? Also consider, Keough plans, bonuses and any possible military pension.
- Business Interests - What is the name of the business, the type of business, percentage ownership and name in which shares or ownership interest is held? What is the value of any interest, are there any stock options?
Several other assets to consider are the amount of cash in bank accounts, the value of livestock, tools and machinery. Club memberships, oil royalties, tax refunds and trusts might be other assets that might not readily come to mind. A list of your joint assets will be helpful for a Texas divorce attorney who reviews your case.
In cases where you believe your spouse may have hidden assets, consulting an experienced family law attorney is essential to protecting your future income.
Written by the Office of Richard T. Bell