Dallas Divorce Law Blog : Dallas Texas Divorce Lawyer & Attorney : O'Neil Anderson Law Firm : TX Child Support & Custody Issues

As a Dallas divorce lawyer, one of the most frequently asked questions I receive is how can a client control the costs of his or her divorce.  Understandably, clients expect top notch service in a cost effective manner.  One of the more costly aspects of any divorce involves dividing up the community estate.  I recently came across a great blog post that offered some practical ways to help keep costs down in dividing the community estate.  Although the focus of the post dealt with dividing personal property contained in the home, a lot of the suggestions are applicable to dividing other parts of the community estate.  Here are the tips:

1.  One spouse makes two lists of the personal property.  The lists should contain property roughly of equal value and the spouse who didn't make the list gets to pick which list of property they want.  Because the spouse who didn't make the list gets to pick first, there is an incentive to make the lists as equal as possible --- otherwise the drafting spouse will get burned in the process. 

2.  Hold a silent auction.  This creative method allows the parties to ensure they get the property that they really want.  In the silent auction approach, each party blindly puts a dollar value next to a piece of property that is listed out on a sheet.  Since the parties don't know what dollar amount the other placed on the property, the process is pretty fair to all involved.  The spouse with the highest "offer" on a certain piece of property gets to keep it.  Once the auction is over, then the parties add up the total winning bids and divide the property accordingly.

3.  Arbitration.  Alternative dispute methods, such as arbitration, are frequently used in divorce cases.  Although there is a cost associated with using alternative dispute methods, couples can use an arbitrator to divide the community estate which is typically less expensive than presenting the matter to a judge.

4.  Rotating lists.  In this method, the parties simply make a master list of all their property and then take turns selecting one item at a time that they want to keep.  Spouses can simply flip a coin to see who gets to go first. 

Bottom line is that there are many creative ways to divide up property fairly, and in a cost effective manner.  Hat tip to the Minnesota Divorce and Family Law Blog for the idea behind this post.

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In some cases, dividing the small stuff in a divorce can be at least as costly and time consuming as dealing with the big stuff.  People often have an emotional attachment to the small stuff even though the items may not have monetary value. 

The small stuff, called "personal property", includes items such as dishes, linens, clothing, knick-knacks, furniture, art, computers, and even the family pets. The personal property divisible during divorce only includes those items purchased during the marriage that are not gifts or inheritance.  Items received as a gift, such as jewelry, would be considered the separate property of the person and not subject to division in the divorce.

The first step in dividing the personal property is to make a list of all of the "stuff" the spouses have and assess a value for each item.  Usually the value is what the item could actually sell for (like at a garage sale) . Then, the spouses should identify the "stuff" that each person wants.  For items desired only by one person, the division should be easy. 

If there are items that each person wants, several methods of negotiation can be used.  For example, one judge in Collin County often orders the parties to participate in the "coin flip" method.  So, one spouse flips the coin, the other spouse "calls it" heads or tails to pick a disputed item on the list.  Then the spouses take turns picking an item until all of the items are gone.

If the spouses are unable to reach an agreement on how to divide personal property, the issues can be presented to the judge in a trial for the judge to divide.  When this becomes necessary, I advise clients to think about division of personal property from a cost-effectiveness standpoint.  Often, the cost incurred in attorneys fees to argue over division of the personal property may very well exceed the value of the property or even the cost that a spouse might incur to replace the item or items.

See our prior article Custody Suit Over Pet Gets Expensive.

Hat tip to Daniel Margolin of The Oregon Divorce Blog for his post entitled How to divide personal property in a divorce for the idea for this article.

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Part of any divorce in Dallas Texas is dividing the marital estate. A marital estate includes both the assets and debts that are considered community property and does not include any separate property assets of either spouse.

1.  Identify the property.

The first step in dividing the marital estate in a divorce is to identify all of the property that either spouse owns, without regard to when or how the property was acquired.

2.  Characterize the property.

The second step in dividing the marital estate involves characterizing the marital property as either community property or separate property. Community property includes any asset that was obtained during the marriage. For example, a person's earnings received during the marriage are community property so anything purchased with those earnings would also be community property. Any asset owned before the marriage or acquired through gift or inheritance would be that spouse's separate property and would not be subject to division by the divorce court. Likewise, any debt incurred during the marriage based on the spouse's credit would be a community debt. Any debt that was obtained prior to the marriage or during the marriage but where the creditor agreed to look only to the spouse's separate property for satisfaction, the debt would be separate.

3.  Value the community property.

Before a court -- or the parties in negotiations -- can assess whether a division of the marital estate is "just and right" under the law, a value must be assessed to each asset. For example, a residence or antique collection may need to be appraised. Often the marital estate will own an interest in a business entity, so the business entity will need to be valued. Pension plans can be troublesome to value because of the future time value of money. Debt values also need to be obtained.

4.  Undertake a just and right division of the community estate.

The legal standard for division of property in Texas is that the division must be "just and right". The courts are required to begin with a 50/50 division of the entire estate (assets and debts) and adjust from there based on whatever equities exist in a particular situation. Such equities may include that one spouse has a disability, or the other spouse has much greater earning capacity. Custody of children and the size of a spouse's separate estate can also be considered. The division does not have to be half of each asset. Much like a balance sheet in the business context, one asset can be awarded to one spouse and another asset can be awarded in its entirety to the other spouse with an adjustment for the value of each asset. Also, one asset may not be worth the same to a particular spouse as another asset. One spouse may value cash in the bank more highly and the other spouse may value maintaining retirement assets. All of these factors must be considered in the division.
 

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