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Property Division: What Can I Keep & What Must I Divide in Texas?

Car keys closeup, couple signing divorce documents about property division

Divorce is a difficult time for any couple, regardless of whether the separation was amicable or not. One of the most important aspects of a divorce (and one that is often hotly contested) is the division of property.

Texas is one of nine states that are classified as community property states. This means that all assets that have been acquired during the marriage by either spouse are considered equally owned by both parties, hence the term community property. As such, when a divorce happens, those marital assets must be divided in a “just and right manner” between both spouses. Texas has clearly defined laws to provide equal division of assets once a marriage ends.

If you are going through a divorce, it is important to understand your rights and options when it comes to the division of your marital property. At the Law Office of Maria Lowry, our experienced attorney can help you navigate what can be a complex road. Our team is here to help you understand your legal rights in what can understandably be a difficult process. Get in touch today to schedule a consultation on your case.

Community Property vs Separate Property

As the name implies, community property is designed to ensure that all marital assets that were acquired during the marriage are split as equally and equitably as possible, as outlined in Texas Family Code § 3.002.

In many marriages, both parties make sacrifices that can inhibit their individual financial growth. For example, it’s common for one spouse to put their career on pause in order to stay home and take care of children and tend to any other domestic chores. While that spouse might not be financially contributing to the household, they are still contributing nonetheless. Community property laws were designed to ensure that those spouses are equally represented during the division of property.

Texas Family Code § 3.003(a) goes on to highlight that it does not matter if a financial account or asset is in one person’s name only. If that account or asset was acquired during the marriage, it is subjected to community property laws. Other assets can include but are not limited to:

  • All income earned during the marriage
  • Retirement account contributions and retirement benefits
  • Long-term Investments
  • Personal assets including vehicles, rental homes, boats, etc.

It’s important to note that just as all assets are considered community property, so too are debts that were incurred during the lifetime of the marriage. These marital debts are treated like community property during the division of property following a divorce.

Separate Property

According to Texas Family Code § 3.001, separate property is used to define any property or asset that was owned by a spouse before they entered into the marriage. Separate property can also be applied to assets that were acquired by only one spouse during the marriage if that asset was acquired as a gift, an inheritance, or a personal injury settlement. It’s important to know that separate property must be traced to its source and proven to be separate. Under Texas law, all property is presumed community property until it is proven to be separate.

What Is Commingled Property?

In cases where an asset cannot be distinguished as community or separate property because its acquisition, retention, or maintenance has been dabbled in by both parties, it is deemed commingled property. Commingled property can make it challenging to determine who ultimately owns it. If it’s too difficult to discern whether it should be separate property and to whom it belongs, it is generally regarded to be community property and will be treated as such.

How Is Property Divided in a Just and Right Manner?

As community property is divided among two spouses during a divorce, Texas law requires that the courts divide the property in a manner that is “just and right.” While there are guidelines in place that help determine what is just and right, it largely depends on why the divorce is happening, and whether one spouse is more at fault than another.

When determining how to divide property in a manner that is just and right, a court will look at several factors including but not limited to the following:

  • Fault regarding the marriage’s breakdown (whether or not one spouse cheated, engaged in fraud, or in any other behaviors that led to the failure of the marriage)
  • Earning capacity disparities
  • Size of the marital estate and marital property
  • The amount of separate property each spouse owns
  • Whether one spouse has been gifted assets
  • Whether one spouse stayed home to care for children, thereby limiting their earning capacity
  • Health
  • Age difference
  • Whether there is wasteful use or spending of community assets
  • Spousal or child support responsibilities

When to Seek Out Legal Guidance

If you have many assets at play, including ones that come in all varieties including jewelry or art, rental property, business interests, retirement plans, and savings accounts, it can be difficult to navigate what falls under community property and what is deemed separate property.

The experienced team at the law firm of Maria Lowry is here for you. Our dedicated team will work to ensure that you experience a just and right division of your community property during what is undoubtedly a difficult process to navigate. As difficult as it may be, having experienced legal counsel on your side can help you gain the legal guidance and confidence you need to move forward through the process. Reach out today to learn more.

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