Drafting divorce decrees and other legal documents is an art form. It requires understanding what the law requires. One must also know the balance between what may appear and what should appear. The answers may not be a black and white issue. There may be competing concerns and what is right is often a judgment call. Today’s post will address what Texas law requires in a divorce and some reasons why you may want to include specific financial accounts or debts in your divorce decree.
The Texas Family Code does not require any specific language awarding financial accounts or liability for debts to the parties. However, it is almost always necessary to include some language regarding these assets and debts. A divorce decree in Texas can include general language instructing the parties how to deal with accounts and debts after the divorce. This type of general language is common but not always the right answer. Sometimes it makes sense to identify some or all of the financial accounts or debts in the divorce decree and clarify how to treat them in your post-marriage life.
Reasons to Include Accounts and Debts in Your Divorce Decree in Texas
1. Sometimes one must include this information so the parties have a clear and permanent description of how to divide assets. This can be especially true when there are joint accounts or debts where the parties have co-signed. If everything is split down the middle it may be easy enough to include language to that effect. The alternative, and it’s a very good alternative, is to include those terms in a mediated settlement agreement and avoid putting those specific terms directly into the court order.
2. The custodian of an account may require specific language in the divorce decree to change the debt or account. This is a very good reason to include whatever is necessary to accomplish the intended division of property between the spouses. Debts usually cannot be reformed merely by language in the divorce decree. Court orders can often transfer financial account ownership.
3. Sometimes including specific language about the division of community property and award of separate property in the divorce decree will help prevent post-divorce conflict over what belongs to which party or what responsibilities the parties have to each other. If a paragraph in the divorce decree can avoid a costly post-divorce lawsuit or enforcement action then it may be a good idea.
Reasons not to Include Accounts and Debts in Texas
1. Whatever goes into the divorce decree becomes public record. Pointing out that you were just awarded a sum of money might encourage criminals to pay you or your home a visit. This is extremely rare and unlikely for most people but it has happened in the past. People with large marital estates with expensive tangible property may have cause for concern.
2. It exposes the existence of accounts that may be available for garnishment or other capture to satisfy a judgment against a party now or in the future. Locating financial assets as a judgment creditor. Once written into the divorce decree then they become public record.
3. There may not be any meaningful benefit to either party to take the time to specify accounts or debts. If that is the case then there is probably not a good reason to expose that information in public records. Once it’s in the divorce decree it’s difficult to take it back out.