How Property Is Divided in a Texas Divorce
Texas follows a handful of other states that observe community property during a divorce. This means that both income, property, and other assets acquired by a couple belong to both parties equally. This standard applies to financial liabilities as well; any debt that is incurred by either spouse during the marriage belongs to both spouses equally. There are certain circumstances, however, in which the judge may order that the division of property is unequal so long as there are “just and right” reasons as stipulated by Texas family law. Let’s take a look at how property is divided in Texas and what it means for couples who are moving forward with a divorce.
Community Property vs Separate Property
Community property is defined as any assets or liabilities that belong to both parties equally. This type of property is typically incurred during the time that the couple was legally married.
Unlike community property, separate property refers to assets or liabilities belonging solely to one spouse. Assets or liabilities that are defined as separate property are typically acquired by one spouse before the couple entered into the marriage.
Trusts, Inheritance, and Settlement Rewards
There are instances where one spouse may receive an inheritance, piece of property, or other assets through a trust or other means during the marriage. In these instances, that asset may be able to fall under separate property for the spouse that acquired it.
There are circumstances where if one spouse comes into money, that money may be classified as both separate and community property. For example, if one spouse is awarded a financial settlement due to an injury and a portion of that money was issued to compensate for the loss of income, then that sum might be declared community property. Any compensation allocated for the individual could fall under separate property.
In Texas, judges have the discretion to determine what falls under community property and what is classified as separate property when it comes to the division of assets.
Retirement accounts can also be subject to division during a divorce. A judge may look at retirement accounts including 401ks and pensions to determine how much of it is community property and how much is separate property. Typically, all earnings that were collected before the marriage is deemed separate property. Any funds that were placed into a retirement account or grew during the marriage can be divided as community property.
Division of Community Liability
Any debts that are incurred during the marriage are also regarded as community liabilities. This means that both spouses will be responsible for paying that debt off through either community property, separate property, or both.
A judge also has the discretion on how to divide those community liabilities as well. Dividing debt in a marriage can be tricky because a judge has to analyze how that debt was incurred, and whether the other spouse’s community and/or separate property is liable for it. In some instances, a debt that was incurred during the marriage by one spouse may be required to be paid back by the other spouse’s community property but not their separate property.
Discretion When Dividing Community Property in Texas
Texas courts allow a judge discretion when determining how to fairly split community property. When distributing community property, the judge has to do so in a manner that is supported by reasonability, not just fairness. Judges will often take into consideration the following when deciding how to divide the community property:
- Whether one spouse is the primary caregiver for children
- The education level and career paths of both parties
- Whether one spouse gave up their education or career to raise children and/or to support their spouse
- Considering how much separate property one spouse owns
- Whether or not one party was at fault for causing the divorce to happen
- The nature of the assets
- Age and physical health of both spouses.
Speak With a Divorce Lawyer
Regardless of how amicable your divorce may be, when it comes to the division of property, divorce proceedings can be complicated and even difficult to go through. It’s important to have a divorce lawyer on your side who can walk you through the process and alert you on what you can expect every step of the way. To speak with someone about your case, reach out to our team of lawyers who can help answer any questions or concerns you may have.