The divorce between two Texas billionaires has brought asset trust laws into sharp focus. This billionaire couple is currently embroiled in a legal battle over what is considered marital property. Although the case was supposed to be heard in court in April, it has been delayed indefinitely by the COVID-19 crisis.
The couple married in 1989 and had very little money at first. However, they built a company in the 1990s that eventually made them billionaires. Their assets now include a private island, yachts, multiple homes and more. When the husband filed divorce papers in 2017, his wife assumed she would be getting half of their fortune. However, she discovered that he had moved nearly all of their assets, including such personal items as a diamond necklace he gifted her and tableware, into asset trusts in South Dakota.
The man’s attorneys said the property belongs to the trust rather than either individual. The amount listed as marital property is just $12 million. Since the woman’s legal fees are already in the millions, if half of this is all she receives, she may be left with nothing. The privacy laws around the trusts are so strict that she and her attorneys are struggling to get any information about them at all.
Since Texas is a community property state, most property acquired since the marriage is considered to be marital property and is supposed to be split equally. This can mean the stakes are very high in a high-asset divorce, and one spouse might try to hide assets using offshore trusts, shell companies and many other methods. It may be necessary to work with a lawyer and forensic accountant to identify assets during the property division process.