In Texas, all property that is acquired during marriage will be divided equally if the parties file for divorce. Unfortunately, it can be hard to determine how to equally divide assets that are illiquid, such as a partnership interest in a family business. In community property states like Texas, if two parties to a divorce cannot agree on which of them will keep a contested asset, a judge may order the parties to sell the asset to ensure that the profits can be equally split.
In one case, a couple jointly owned a biotech company and needed to create a plan to determine the amount of shares that each of them would hold in the company. A judge may normally order one spouse to pay the other over time for that spouse’s interest in the company, but he warned that such an order may not result in an equal division if the company changes in value over time.
Individuals may also agree to keep an investment interest with one spouse holding onto the investment and the other receiving all of the documents and being named in an agreement. However, in a contested divorce, parties may not be able to come to a settlement agreement such as this one. Parties in a divorce may even have doubts as to whether another spouse is being truthful about all assets that are in existence.
Some people may try to hide assets by making an interest-free loan to a family member to make it seem as though they have less money than they actually do. Family law attorneys in Texas may request the discovery of financial documents and even issue subpoenas to a spouse’s place of work or bank if a client believes that spouse has been making illicit withdrawals.
Source: Financial Planning, “Finding Hidden Assets: Digging Deep in HNW Divorce”, Andrew Pavia , March 24, 2014