Divorce is an emotionally draining experience, and the financial implications of this process can be equally stressful. If you’re contemplating divorce, you might be worried about splitting assets, spousal support and affording to live on your own.
While divorce can take a significant chunk out of your wallet, it’s unlikely to leave you with absolutely nothing. Knowing what to expect regarding asset division during divorce can help to prepare you for this life-changing transition.
Understanding marital property vs. separate property
The key to understanding how much you might lose in a divorce lies in differentiating between marital property and separate property. Marital property is any assets and debts acquired during the marriage. This could include your house, cars, retirement accounts and even furniture. In simpler terms, anything you and your spouse jointly obtained while married falls under this category.
Separate property, on the other hand, is an umbrella term for assets you owned before the marriage, inheritances you received during the marriage (if kept separate), any personal injury settlements or even a business you started and maintained independently before the marriage.
In Texas, property division during divorce follows the community property principle, which means a fair but not necessarily equal split. This doesn’t always translate to a 50/50 division. Factors like the length of the marriage, the earning capacity of each spouse and contributions made towards acquiring assets can all influence the final outcome.
Protecting your assets
While a fair division is the norm, there are ways to protect certain assets in some situations. For instance, suppose you established a prenuptial agreement before tying the knot; it likely specifies how property should be divided in case of divorce. Moreover, gifts and inheritances received during the marriage can also be protected if kept separate from marital funds. Yet, it’s also important to remember that trying to hide assets during a divorce is not advisable and can have legal repercussions.
While divorce can cause significant financial strain, it’s highly unlikely to leave you with nothing. By understanding the distinction between marital and separate property, and with the guidance of a qualified legal team, you can navigate the financial elements of divorce and more effectively secure a stable future.