Complex Marital Estates

Premarital Agreements

When one or both parties in a marriage have substantial assets, property, or business interests, they may choose to sign a prenuptial agreement before getting married. Although prenups are intended to simplify the process of dividing assets in the event of a divorce, a poorly drafted or executed agreement may be challenged and declared invalid. For instance, if one party failed to fully disclose their financial obligations before signing the agreement, the other party may argue that the agreement is invalid and unenforceable. If you have a prenuptial agreement and are seeking a divorce, it's advisable to consult with a knowledgeable family law attorney who can review the agreement's validity and anticipate any issues that may arise during the divorce proceedings.

Transmutation of Property in Divorce Cases

Even if property is characterized as either separate or community at the time it is acquired, the nature of the property can change throughout the marriage due to transmutation. Transmutation refers to the conversion of property from separate to community or vice versa. This conversion may result from an agreement or gift between spouses, but it's more frequently due to the merging of assets. For instance, if one spouse has a home that is considered separate property, but community funds are utilized to make substantial repairs or upgrades to the property, it may become a community asset. When the nature of property is uncertain or contested, it may be necessary to hire a forensic accountant to track the property's origins and determine its proper classification.

Business Valuation in Divorce Cases

In a divorce involving a complex marital estate, the ownership of a business interest can further complicate matters. If the business is considered community property, evaluating its worth can be challenging. Texas law provides several approaches for determining a business's value, but the parties may have different opinions on which method is most suitable. Even if the parties agree on the value of the business, they may still disagree on how to divide it and whether one party should maintain control over it.