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TX divorce lawyerMany parents make an effort to diligently put away money in a 529 college savings account each month for their children’s higher education. However, these accounts, like any other asset, are divisible upon divorce, which means that they could be put in jeopardy, so if you have a college savings account for your child and have questions about its fate in the event of divorce, you should strongly consider contacting an experienced high asset divorce attorney who can help ensure that your child’s future is protected.

What Are 529 Savings Plans?

Also known as qualified tuition plans, 529 savings plans are tax-advantaged plans that are sponsored by the state and that help families save for future education costs. There are two main types of 529 plans: prepaid tuition plans and education savings plans. The former allows account holders to purchase credits or units at specific colleges and universities to cover future tuition and fees for a beneficiary at current prices. Education savings plans, on the other hand, allow account holders to save for a beneficiary’s tuition and mandatory fees, but also room and board. Funds from these types of accounts can be used at any college or university.

College Savings and Divorce

While a couple may have invested in a 529 college savings plan for their children, those assets are still considered to be marital property until the beneficiary actually enters college. This means that the contents of a college savings plan are eligible for distribution between two spouses upon divorce. While both parties could theoretically continue to place funds in the account after the divorce is finalized before turning it over to their children, this isn’t a guarantee, as some spouses value higher education more than others. In some cases, an account holder could remarry and have more children, at which point, he or she may want to use some of the funds in the account for those beneficiaries as well.

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TX divorce lawyerWhether an agreement is reached in an out-of-court setting through negotiation, or as the result of litigation and a court order, the terms of any finalized divorce decree must be followed. Unfortunately, it is not uncommon for one of the parties to refuse to comply with certain terms, especially in regards to property division. In these situations, courts can step in and enforce a property settlement following divorce, so if your former spouse is refusing to comply with a court order by failing to turn over certain assets, it is critical to retain an experienced high asset divorce attorney who can help you seek a request for relief from the court.

Enforcing a Temporary Property Division Order

During many divorces, the parties are required to address temporary property-related issues while the divorce is pending, such as: who will retain the family home, who will be responsible for paying certain bills and expenses, and who will cover debts, such as loans, credit cards, and lease payments. To address these matters, a court may issue a temporary order that has some or all of the following effects:

  • Restrains one spouse from damaging or selling certain property;
  • Requires an inventory and appraisal of all community and separate property;
  • Prohibits the parties from wasting marital assets; and
  • Assigns responsibility for certain household expenses and childcare costs.

These temporary orders play a critical role in helping spouses resolve certain issues during divorce, but also provide the grounds for an enforcement action if one spouse fails to comply with the terms. Temporary orders are as legally binding as final orders, so when one party fails to abide by their terms, the court can intervene by transferring liability, ordering eviction, foreclosure, or wage garnishment, or holding the non-compliant party in contempt.

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TX high asset divorce lawyerIn Texas, assets acquired during a marriage are subject to equitable division upon divorce. Whether a couple is able to reach a divorce settlement on their own in an out-of-court setting, or a court orders property division after the parties’ litigate the issue, a divorce will only be officially granted when an arrangement has been reached. In most divorce cases, all property-related issues are resolved by the time the court issues a divorce decree. However, it is also not uncommon for one party to discover, after a divorce has already been finalized, that his or her former spouse was hiding assets in an effort to retain sole possession. Concealing assets during divorce is unlawful, so parties who determine that they were unfairly denied an equitable portion of a specific asset can ask the court to step in and distribute the previously undivided property. This can be a difficult endeavor, so if you recently discovered that your former spouse was hiding assets during your divorce proceedings, it is critical to contact an experienced high asset divorce attorney who can help you collect your rightful share of your marital property.

Dividing Assets

During divorce proceedings, courts require couples to provide evidence of all of their different assets, including titles, deeds, bank statements, and receipts for collectibles like artwork or antiques. Providing this documentation helps give courts a good idea of each party’s financial holdings, which in turn, enables them to fairly and justly divide those assets between the parties. Obviously, a fair distribution of marital assets isn’t possible if one of the parties, or the court, is unaware that certain property exists. For this reason, when a party later learns that a former spouse was concealing assets, courts allow them to file a new lawsuit requesting distribution of the remaining undivided property.

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TX high asset divorce lawyerIn Texas, most assets acquired by a person before he or she entered into a marriage will remain in that individual’s sole possession in the event of divorce. In fact, even some assets obtained during a marriage can qualify as separate property, including gifts, inheritances, and personal injury awards. There are, however, certain situations where assets that were clearly acquired prior to marriage are actually considered by the courts to be marital property, and so, are also divisible upon divorce.

In most cases, this occurs when there is evidence of commingling, which is a term used to describe the mixing of separate assets with marital property. When this occurs, the original owner will most likely have to share the asset with his or her soon to be ex-spouse. This can be a significant financial burden, so if you are concerned about the fate of some of your own property, you should strongly consider contacting a high asset divorce lawyer who can advise you.

Did I Commingle My Assets?

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Posted on in High Asset Divorce

TX high asset divorce lawyerWhen considering divorce and the division of assets that must inevitably follow, it is important for divorcing couples to remember to account for all trusts that they have established, including those created prior to their marriage. Depending on when it was created and the types of funds and assets that it contains, a trust might completely protect one spouse’s property from division during divorce. On the other hand, the contents of a trust might still end up being divided equitably between the spouses. If you or your spouse have a trust in place and have questions about its fate in the event of divorce, you should consider consulting with a high asset divorce lawyer who can advise you.

Irrevocable Trusts

Although Texas courts have not addressed all types of trusts in relation to divorce, a number of judges have indicated that separate irrevocable trusts, when created prior to a marriage, do shield separate property from marital property. As a result, the contents of those trusts are not subject to division upon divorce. In fact, even the income from these types of trusts, even if it was earned during the marriage, will remain separate property and so also won’t be subject to division. However, this is only true if the beneficiary of the trust, whether the spouse him or herself or a third party, will not be considered to have a present possessory right to any of the assets contained in the trust. In the event that the trustor is granted a present possessory right to a portion of the trust, then the income would become marital property and would have to be divided equitably between the parties.

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TX high asset divorce lawyerAlthough ensuring that your assets are secure is one of the most important aspects of any divorce, it is especially true for those with substantial or unique property. Fortunately, there are a few simple steps that Texas residents can take to protect their assets, so if you are thinking about filing for divorce, it is critical to speak with an experienced high asset divorce lawyer who can explain your legal options.

Listing Your Assets

One of the most crucial steps that divorcing couples should take is determining which assets belong to whom. This is because Texas is an equitable distribution state, which means that only marital assets must be divided equitably upon divorce. Separate property, or assets that belong to one spouse alone, however, can remain in the sole possession of the original owner. For this reason, providing proof of when and how an asset was purchased is critical to the property division process. In fact, a spouse who can prove that he or she received a particular asset as part of a gift or an inheritance can retain that asset, even if it was obtained during the marriage.

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TX divorce lawyerCouples who live in Texas and have unique or diverse assets and are considering divorce may want to consider filing by the end of 2018, as new federal tax laws that affect alimony payments are set to go into effect next year. To learn more about filing for divorce and the effect that the new tax law could have on your own case, please contact one of our dedicated Cedar Park high asset divorce attorneys for assistance.

Current Law

Under current federal law, those who pay alimony to ex-spouses can deduct those payments when calculating their taxable income. Similarly, alimony recipients must include spousal maintenance payments when calculating their income. This has proven to be extremely helpful to taxpayers who are being taxed at a high rate based on their income. In fact, the IRS estimates that as many as 600,000 people take advantage of this deduction. However, next year, this option will no longer be available.

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TX divorce lawyerDivorce can be a financially and emotionally stressful time. This is true regardless of how much a couple’s assets are worth, especially when children are involved. However, families with unique or valuable assets do face specific issues when it comes to divorce, such as property division disputes, valuation problems, and attempts to hide assets. With this in mind, it is important for couples with business interests, complex assets, or significant financial interests to try and avoid certain pitfalls. Consulting with an experienced high asset divorce attorney can be crucial to the success of this endeavor, so if you are considering divorce and have diverse or substantial assets, you should consider contacting an experienced high asset divorce attorney for advice.

Making Emotional Decisions

One of the worst things that a divorcing couple can do is make decisions based purely on emotion. For instance, one spouse may attempt to relieve themselves of guilt for past wrongdoings by agreeing to pay more spousal support than is necessary or by giving the other party a greater share of marital property. Later, when tempers have cooled, the parties could realize that the decisions they made were not in their best interests. Unfortunately, it is often too late by this point and they will most likely be stuck with their court-ordered property settlement.

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8911 N. Capital of Texas Highway, Building 2, Suite 2105, Austin, TX 78759