The division of financial accounts can be one of the most contentious issues in a divorce. Texas residents who maintain accounts separate from those of their spouse should be aware that having assets in their name only will not protect those assets from being divided in a divorce.
For people who reside in community property states, anything that is obtained during a marriage is considered property that belongs to both spouses. This includes any funds that are in separate bank accounts.
For people who reside in one of the states that follow equitable distribution laws, any assets that are obtained during the marriage are generally believed to belong to the party who earned it. However, during a divorce, an argument could be asserted that the assets obtained by either party should be considered marital property and be divided. Also, the court may determine that the separate property of one spouse should fund a fair settlement for both people in the divorce.
In order to protect their assets in the event of divorce, individuals should complete a prenuptial agreement before getting married. Obtaining the legal document is considered the easiest and most effective way of protecting assets. An additional benefit of a prenuptial agreement is that it compels couples to discuss their finances openly. The prenuptial agreement can also be modified; in some cases, some couples may decide to nullify their agreements in the future.
A family law attorney may assist clients in a high-asset divorce by working to protect the assets they earned during the course of the marriage. Litigation might be used to obtain the desired divorce settlement terms regarding the division of financial accounts, business assets, 401(k)s, real estate and other high-value assets. Depending on the factors of the divorce, negotiation may be used to obtain asset division terms.