Texas is a community-property state, which means that most property and debts acquired during marriage belong to both spouses. However, each spouse gets to keep his or her separate property when the marriage ends. A divorce must therefore consider the division of marital property.
Community Property vs. Separate Property
All of the property a couple owns is considered to be one of two types of property, which together form the basis for any division of marital property:
- community (owned by both spouses)
- separate (owned by only one spouse)
Everything either spouse owns or owes is presumed by law to be the community property/debt of the couple unless a spouse can prove otherwise by clear and convincing evidence that it is his/her separate property. It does not matter whose name the debt or property is in.
Separate property is anything owned before marriage and the appreciation or increase in value of that property, inheritances or gifts (from others or from a spouse), personal injury damage awards (except for loss of earnings), and property exchanged for other separate property, or property designated as such in a premarital/post-marital agreement
Dividing Community Property and Debts
During the division of marital property, figuring out how community property and debts (who gets what and who pays for what) should be allocated is often very difficult and confusing for a couple.
In many marriages, one spouse has more knowledge of the household finances. Even if you have all that knowledge, it can be overwhelming to figure out what you have, where it is, how much it is worth, what you owe, whether it is community or separate property and debt, and how to split it.
I use my knowledge of the laws affecting the real value of property awarded to each spouse to help my clients with issues that most people do not take into consideration.
There are three main steps to dividing property and debts in Texas :
- Characterize the property: Is the property or debt part of the community estate or is it separate property of one spouse?
- Value the property: What is the property worth, or how much is the debt?
- Divide the property: How will the property and debts be divided or allocated between the spouses?
When a couple divorces, Texas law requires that their property be divided in a manner that is “just and right.” This means that the division of property must be equitable under the circumstances. There are many circumstances that the court can consider in determining what is “equitable,” including fault in the breakup of the marriage, disparity of earning power between the spouses, each spouse’s health, which spouse has custody of the children, each spouse’s education, and the future employability of the spouses.
A judge can only divide community property in divorce and cannot award the separate property of one spouse to the other. However, after hearing evidence from the spouses, as well as any experts, the judge can decide whether property is part of the separate or community estate and can determine its value. In addition, a judge may consider the value of one spouse’s separate property and the contributions the other spouse made to the separate property (e.g., to improve or maintain it) when he or she divides up the couple’s community property and debt.
In Texas, judges rarely award a 60/40 split; a 70/30 split would be extraordinary. However, judges are very likely to approve whatever split you and your spouse agree to in a settlement agreement. I advise my clients to weigh whether fighting for an uncertain property division in a court trial is worth the cost of attorneys’ and experts’ fees, your time and energy, and the potential long-term damage to family relationships. However, if we do need to go to trial, I represent my clients with a strong, aggressive approach.
If you have any questions about the division of marital property and debts or need an attorney to guide you through the process, please call me today at 682-234-2006 or email me to schedule your free initial consultation.