It is common for one spouse to make a lot more than the other spouse in a marriage, but how does this affect a divorce? Does it change how the court divides property and debt? Is one party favored over the other?
Generally speaking, property and debts are divided the same in a divorce involving a high-earner spouse as they are in a divorce involving spouses with lesser incomes. In either case, the community property and debts are divided in what is called a “just and right” manner.
In other words, neither party is favored, or punished, for being a high-wage earner in a Texas divorce.
However, there is no exact formula that determines what is “just and right,” so judges decide what is appropriate on a case-by-case basis. That is why it is so important to have a skilled lawyer on your side, looking out for your best interests and making your case to the judge.
Significant income and assets cause complexities
Even though divorce cases involving high-wage earners follow the same rules and procedures as cases involving less income, dividing property and debts can be much more complex.
These cases often involve multiple homes, business interests and special compensation packages. Additionally, spousal maintenance and supplemental costs such as private school tuition may be involved.
In a high-asset divorce, the first step must be to identify and assess all community property and debt, which is property and debt that is owned jointly by the spouses and subject to division. Separate property and debt, which is owned by just one spouse, is not divided.
If part or all of a business is considered to be community property, then it must be appraised by looking at bank statements, tax returns and other documentation. Money and time can be saved by working with a divorce lawyer who can handle business valuation in house.
Before the divorce even begins, high-earners and their spouses will want to (separately) take steps to carefully plan in order to achieve asset preservation and allocate debts to one spouse, if necessary.
Parties in cases involving high-earners and business owners must rely on an attorney who has experience handling these complex and unique issues.