Protecting You & Your Finances
What is the Division of Community Property in a Divorce?
When it comes to divorce, the State of Texas is a Community Property State. This means that all jointly-owned assets, debts, and liabilities fall in the community estate. These assets, debts, and liabilities are owned by both the husband and wife and are divided equitably during divorce proceedings.
Many Texas couples considering divorce assume that as a community property state, the court is obligated to divide the marital property equally between the two spouses; however, this is not true. The judge must weigh all the facts and impose a “just and right” division of assets and debts. The court’s decision may differ greatly from what a party views as a fair allocation of the property, which is why it’s important to get a Houston divorce lawyer involved to protect your interests.
What are Community Property Assets?
Community property assets in Texas may include:
- Real estate
- Other valuables received during the marriage
Generally, any asset acquired during the marriage -- regardless of whose name is on the title -- belongs to both spouses. Both spouses own an interest in all property acquired by either of them during the marriage. A provision in the Family Code requires the judge to assume that all property accumulated during the marriage is community property unless one of the parties proves otherwise.
What are Community Estate Liabilities?
Liabilities include debts or other obligations incurred during the marriage, such as:
- Credit card debt
- Student loan debt
- Vehicle loans
- Home equity lines of credit
- Payday loans
- Other secured or unsecured financial obligations
Dividing Community Property in a Texas Divorce
If there is no pre or postnuptial agreement, the court considers all assets and liabilities gathered during the marriage to be community property. Exceptions include assets or liabilities received before the date of the marriage, which are considered separate property.
Separate property generally consists of:
- Property owned before the marriage
- Property acquired by inheritance
- Property that was gifted to a spouse
- Some recoveries for personal injury claims
All other items are classified as community property, including income received during the marriage from a spouse’s separate property (such as interest and dividends). Salaries, commissions, bonuses, and other earnings are community property.
It’s crucial to distinguish community from separate property in a divorce because the divorce court may only divide community property among the two parties. So, if one party can prove that a certain item is his or her separate property, the court must award it in full to that spouse.
What Does the Court Consider when Dividing Community Property in Texas?
The trial judge in a Houston divorce must determine what is a “just and right” division of community property. The most common reasons for ordering an unequal division of marital property involve responsibility for raising children and differences in the earning capacities of each party. Other considerations may include:
- Fault in the failure of the marriage. The “innocent” party may receive a disproportionate division of the marital estate based on an assessment of fault in the marriage’s failure. Texas still has fault grounds for divorce, such as adultery and cruelty.
- Benefits the Innocent Spouse would have received if the marriage had continued. The party not considered “at fault” for the marriage may receive compensation for the losses they may suffer due to the divorce.
- Disparity of earning capacities. If there is a significant difference between the business opportunities available to each party, their incomes, abilities to earn an income, and related factors may affect the way the judge divides the property.
- The health and physical condition of each party. Each party’s health and physical condition may affect the division of community property.
- The size of the community estate. The size of the marital estate could affect how the court distributes the properties. Generally, the larger the estate, the closer the court will come to a 50/50 division.
- The size of separate estates. Deciding how to allocate property may be influenced by the nature and extent of each party’s separate property.
- Spousal support. The payment of -- or failure to make the payments of -- spousal support ordered while the suit is pending may influence the court’s final division plan.
- Child custody. Court orders related to the custody of minor children may influence the division of marital property.
- The cost of litigation may be considered when determining property division, including attorney fees.
Other factors may also play a role in helping the court decide the best way to split marital or community property. It’s best to consult a knowledgeable Houston property division lawyer to understand how the court will most likely distribute your property if you have filed for divorce.
Houston Property Division Lawyers are On Your Side
During a divorce, just like in marriage, compromise is key. When you seek to protect your personal belongings, income, and other important assets during divorce proceedings, you need quality representation from the experienced lawyers with Stepp & Sullivan, PC. Our Houston property division lawyers have more than 70 years of combined experience tackling legal issues pertaining to divorce, property division, child support, child custody, spousal support, and other family law issues. Our legal team is prepared to answer your questions and put your mind at ease during this challenging and confusing period.