As you figure out what steps you need to go through to finalize a divorce, you will eventually have to make a decision on the division of property in a divorce. As expressed throughout these pages, in a divorce, it is always preferable to reach a settlement agreement with the other party versus taking the matter to court for a judge to decide. To that end, an attorney knowledgeable in Texas' division of property laws and, specifically, community property, will give you the information you need to form a fair property division agreement with your spouse. If an agreement cannot be reached with the other party, then our community property lawyer will work with you to determine the division of property you will ask from the Court. Your divorce and community property attorney with Baucom Family Law is the best person to assure you of a fair and equitable division of property with your spouse.
In a divorce one of the most important aspects is deciding on an equitable division of marital property. Texas is a community property state. You may be asking, "What does it mean to be a "community property state?" Applying Texas law, a "community property state" is one in which all the property and assets acquired during marriage are jointly and equally owned by both spouses, regardless of whose name is listed on the title or deed to the property. However, there are many misconceptions about community property, such as what property and assets are actually considered community property under Texas law, and what happens to community property in a divorce.
Complex issues regarding community property certainly arise in various situations, but the general rule is fairly easy. Under Texas law, any property or asset ACQUIRED during marriage is "community property." It doesn't matter if only the husband's name is listed on the deed to a house or if the wife's retirement was funded exclusively by the wife's income and her employer, if such asset or property was acquired during the marriage, then it is community property, unless an exception applies as discussed below.
By way of further explanation, here is a real-life example applying Texas' community property laws: A couple gets married in March 2015. The wife has been saving money from her job for two years to purchase a car. One month after the couple gets married, the wife buys a new car, using only the money she saved prior to marriage for a large down payment. The car is registered solely in the wife's name and only her name is on the car note. The wife continues to use only her income to make each monthly car payment. In November 2017, the couple begin divorce proceedings. Even though all the money paid on the car had come exclusively from the wife's income, the wife's car is community property under Texas law. As a result, until the divorce is final and the property is divided, the husband is a 50% joint owner of the vehicle.
Property or an asset that a spouse acquires prior to the couple's wedding date is the separate property of that spouse and, generally, will remain his or her separate property throughout the marriage. As always, exceptions do apply to the general rule and our family law and divorce attorney can explain the exceptions and determine if any such exceptions apply to your situation.
There are also exceptions to the general rule that property acquired during marriage is community property. When one of these exceptions apply, even though the property or asset was in fact acquired during the marriage, it is the separate property of one spouse. These exceptions include property or assets that are acquired:
Under these exceptions, anything a spouse receives as a gift or inherits during marriage is NOT community property, rather it is that spouse's separate property and it cannot be awarded to the other spouse in a divorce.
For example, if a husband receives a house as a gift from his mother, which the spouses subsequently move into, the house does not become community property. Because it was a gift to the husband, he owns 100% of the house as his separate property. In this example, if the couple divorce, there are other financial issues that could result in the wife having a claim against the husband for reimbursement for money that was used during the marriage to make improvements to the house. Our family law and divorce lawyer at Waco Family Law can provide you more information regarding complex issues of community property.
The "character of property," as used in this context, refers to whether particular property is determined to be "community property" or "separate property." During your consultation with our family law and divorce lawyer, the attorney will ask you preliminary questions about your property and assets so that we can characterize each property and asset as community property or separate property. This is an extremely important determination because community property is treated very differently than separate property in a Texas divorce. In a divorce, community property is subject to equitable division by the court. That means the Judge may EQUITABLY divide community property between the spouses, but the Judge may not award any part of one spouse's separate property to the other spouse in a divorce.
One common misconception is that community property must be divided 50/50 between the spouses in a divorce. Although during the marriage, each spouse jointly and equally owns community property, the divorce court is NOT required to divide community property equally between the spouses. Thus, it is important to remember that you do not automatically get 50% of what you own as a couple. Instead, the standard the judge applies is an "equitable" division of community property between spouses. This means the judge decides what he or she thinks would be a fair and just division of the community property. The starting point for the division of community property in a divorce is generally 50/50, but there are various factors that can cause a judge to award one spouse a bigger share of the community property than the other spouse. The community property attorney at Waco Family Law can explain what factors the judge may use to award a disproportionate percentage of community property to one spouse over the other.
Just like property acquired during marriage is community property, debt acquired during marriage is referred to as "community debt." Although "community debt" is not an accurate term since the "community" is not an entity in and of itself, we use that term since it is the easiest way to understand the concept. As such, any debt acquired during marriage, regardless of whose name is on the loan, credit account, or note, is a community debt and can be equitably divided between the spouses by the Divorce court. Any debt a spouse acquires before marriage remains that spouse's separate debt and the other spouse cannot be held responsible for it by the divorce court.
Usually, if a spouse is awarded property that has a note attached to it, such as a car note, then the spouse who is awarded the property will also be responsible for the debt attached to it. This is certainly not always the case and how the court divides the community debt depends on how the property and assets are divided, any child support or spousal support (spousal support is rarely awarded in Texas), and the purpose for incurring the debt. Our community property and divorce attorney will work with you to determine what would be a fair division of the community debt.
*See FAQ for more information regarding inheritance and devise.
The division of property can be a complicated and difficult issue in a divorce, especially in a community property state like Texas. An experienced community property attorney can take this stress off your shoulders, while providing you information that is easy to understand and guidance as to the best way to proceed under your circumstances. Our community property and divorce attorney has extensive experience handling community property issues and with more than 13 years experience, she can determine the character and ownership interest of all your property and assets, along with the character of all the existing debts and obligations of both spouses. To talk to our community property and divorce lawyer, contact our law firm today. We can give you the assistance you need to create a property division agreement that works for you and your spouse.