Divorce: What's a Disproportionate Award?
When spouses decide to divorce, there a number of issues to address. From parenting plans outlining custody and visitation arrangements to negotiations over support for children and spouses, each party needs to protect their rights and interests as they seek resolutions that will affect them for years to come. This is especially true of property division, in which the physical assets, financial accounts, and debts of spouses are split.
Texas is a community property state, which means that typically the majority of the couple’s property can be divided in divorce. This property division is handled in a manner that is “just and right,” not necessarily an equal 50/50 split. The nature of this marital property system makes it possible for disproportionate awards, meaning property acquired by spouses during the course of a marriage (including debts) can be allocated out of proportion, or other than equally, between spouses.
At CokerLegal, we assist clients in all aspects of their divorce cases, including property division. Some of the most common types of assets divided in divorce include:
- Real estate, including the family home
- Personal property, such as motor vehicles or jewelry
- Financial accounts, including investments and retirement accounts
- Businesses or business ownership interests
If these or other assets are acquired after the date of marriage, Texas courts presume they are community property and subject to division in a divorce. In order for assets to be characterized as separate property and exempt from division, a spouse must prove that through clear and convincing evidence – such as demonstrating that a particular asset was acquired prior to marriage, through the use of wholly separate funds, or as a gift or inheritance.
Once assets and debts are accurately defined as community or separate property, spouses must resolve how they are to be divided and distributed. This can be an immensely challenging task, especially when unique assets like family businesses, large estates, valuable collections, or stocks and investments are involved. Challenges can also arise when spouses dispute the nature of property as community or separate, allege a spouse is hiding assets, or generally disagree about how it should be divided.
What Issues Can Result in a Disproportionate Allocation of Assets?
In Texas divorce cases, disproportionate awards are not uncommon, although it is rare that the Court orders a significantly disproportionate share without significant reason to do so. While every divorce is different and property division is dependent on the unique circumstances present in a case, there are generally a few common factors that can lead to a disproportionate award:
- Disparity in Income – A disparity in income between spouses, or any disparity between their earning capacities, can result in a disproportionate award. A disparity in income or factors that may affect a spouse’s employability (i.e. their education, training, work experience, physical and mental health, age, and whether or not they have been out of the workforce for a period of time) may be taken into account.
- Separate Estates – If spouses have separate estates, including assets accumulated prior to marriage or through gifting and inheritance, they can factor into any disproportionate award. While the separate property cannot be divided in the divorce, courts can consider the size of each spouse’s separate estate, and whether some portion of it was spent on community assets, in making a disproportionate award.
- Misconduct – Although Texas allows for no-fault divorce, there are circumstances where certain misconduct can impact legal proceedings. This can be true of property division, potentially in cases involving long-term abandonment, domestic violence, and fraud or misrepresentation involving community property (such as fraudulently concealing assets). A party found to have hidden or wasted community assets can be penalized by a disproportionate award to the other side.
- Needs of the spouse or children – unusual needs, such as disability of the spouse or a child of the marriage, can lead to a disproportionate division.
- Financial Considerations – Disproportionate awards are made in consideration of the overall financial picture. Factors to consider may include temporary support paid (which can be offset in the final property division award), expenses to maintain community property while a case is pending, attorney fees and costs incurred in litigation, tax consequences (including tax liabilities affecting property in the future), shared debts, and more. Another issue to consider is whether or not one spouse requires an arrangement for a consistent source of income, which may require creative solutions that utilize disproportionate support awards, structured buyouts of a family home or other assets, or periodic disbursement of retirement savings, among others.
Because property division awards are generally permanent in nature and cannot typically be modified post-divorce, protecting your rights during the divorce process is of the utmost importance. This may require the use of financial experts such as forensic accountants or appraisers, as well as the representation and guidance of experienced attorneys who have the insight and resources to advocate on your behalf during out-of-court negotiations, collaborative divorce, alternative dispute resolution such as mediation, or trial when necessary.
Learn How CokerLegal Can Help
CokerLegal has established a reputation as a client-focused and insight-driven divorce and family law firm. Since 1998, individuals and families across Texas have continually chosen our firm during difficult times, recommended us to others, and even voted for our distinction as Best Family Law Firm by the Best of Denton County. Our team has also been named to the “Best Law Firms” list by U.S. News & World Report. This reputation was earned because we prioritize the needs of our clients, work personally to tailor the legal strategies that resolve their unique issues, and leverage decades of collective experience to protect their rights and interests.
If you have questions regarding property division or would like to discuss how it may work in your particular situation and divorce, do not hesitate to reach out to our firm for help. We proudly serve clients throughout Denton County, Collin County, and beyond, and make it our mission to treat them as family. Call (940) 293-2313 or contact us online today to set up an initial consultation.