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Divorcing couples are normally faced with a new set of goals and concerns for their post–divorce lives. As family law practitioners, it is imperative that we help our clients get the right assets in their divorce, not just 50%.
Texas is a community property state, so the marital property is split equally. That doesn’t necessarily mean that it is split fairly. It is important to ask what assets your client NEEDS. Oftentimes, each asset is split in half and each party gets their respective share. Your client may be in a situation where they need more liquid funds immediately to start rebuilding their life as a single person.
Or perhaps they need more retirement assets. Rather than just splitting each asset in half, it may be beneficial to allocate different percentages of an asset to each spouse, as long as it is equal in total. It is usually better to project your client’s income earning and wealth accumulation ability going forward to determine which assets they need.
All assets are not created equal. For example, retirement assets such as 401(k)’s and IRA’s will be taxed to the recipient upon withdrawal. Other assets such as savings accounts or proceeds from the sale of the house may not be taxable. For some divorces, it may be wise to adjust the “value” of an asset for taxes. This is easily done with the proper software.
At the end of the day, most divorces in Texas end with a 50–50 split of the marital estate. However, we need to make sure that it is also the best split for our clients.