Married individuals who have built a stock portfolio may worry about the division of assets in the event that their marriage ends.
Understand how courts in Texas divide assets to avoid shock as you navigate your divorce.
How are assets divided in a Texas divorce?
Courts view any assets accumulated throughout the course of a marriage as community property. Wealth, including stocks, gained prior to the marriage is typically considered separate property. The court in Texas determines how to distribute community property. Some elements a judge may consider include:
- Each party’s income
- Fault in the divorce
- Size of community and separate property
- Each party’s health
- Child custody
- Spousal support determinations
How are stock earnings divided?
Though initial stock purchases and their earnings bought before your nuptials remain separate property, any dividends paid to you during the course of your union are usually marital property. Many financially savvy couples choose to reinvest those gains into the stock market, making it difficult to determine exactly how to split stock in some divorces.
Stock options can also create complex situations in the dissolution of a marriage. For instance, typically if you earned a stock option while married, even if it vests post-divorce, it is community property. The exact terms of your stock agreement may differ, potentially impacting whether those holdings are separate or community property. An experienced attorney can assist you as you navigate this complicated process.
In Texas, the divorce court has the final say on how to divide a divorcing couple’s separate and marital assets.