How are Property and Debt Divided in a Texas Divorce?
Dividing property can be simple for some and highly complex for others. The length of your marriage, the accumulation of assets, and a variety of other factors can play into this process.
Texas is a community property state. Property will generally will fall into one of two categories: either separate property or community property. Community property belongs to both spouses, and the Court can divide that property in a divorce. Meanwhile, separate property belongs to one spouse only, and is not subject to division in a divorce.
Texas law defines separate property as:
- Property owned by one spouse before marriage;
- Property one spouse receives as a gift or by inheritance during the marriage; and
- Personal injury awards received by one spouse during the marriage.
Generally, income from a spouse’s separate property (such as interest, dividends, and rental income) is considered community property. Salaries, commissions, and bonuses are also community property.
The court will assume that all property that exists at the time of divorce is community property unless a party proves otherwise, by clear and convincing evidence. It generally makes no difference if only one spouse is named on a bank account, brokerage account, or car title. The question is whether the account or asset is in fact separate property or not.
In most divorce cases, spouses are able to reach an agreement on how their property should be divided, often through mediation. If spouses can’t agree, a judge will weigh all the facts and devise a “just and right” division of the assets and debts. The Court is not required to equally divide the community property on a 50/50 basis.
The distinction between community property and separate property is critical because the divorce court can only divide the parties’ community property. If a party can prove that a certain item is his or her separate property, the court must award it to that spouse.
Reimbursement claims are another important aspect of property division in a divorce. One example of a reimbursement claim is when one spouse owns a separate property house prior to marriage, and the mortgage debt is paid during the marriage with community income. When this occurs, the court can order that the spouse who owns the separate property must reimburse the other spouse for a portion of the community funds used to pay down the mortgage. This is just one of several possible reimbursement claims that a court can consider at the time of divorce.
Texas marital property law can be complex and there is no set equation for how a judge must divide the marital property. Therefore it is important to consult with an experienced attorney who can help you understand the law and decide how to best approach this crucial part of your divorce case. The impact can be long lasting.
Professional Guidance For Individuals Who Are Dividing Property
At Adam L. Seidel, P.C., our attorneys have more than 30 years of legal experience. We can help you determine how best to divide property, including homes, bank accounts, retirement plans and brokerage accounts. We will carefully explain to you how the law works and give you the information you need to make intelligent choices about your case. By taking a close look at the history of your marriage, our attorneys will make sure your assets and debts are titled and structured properly (for example, completing a QDRO that divides retirement account assets).
We are wholly invested in the outcome of your case. We want to help you form an agreement that supports your financial and personal well-being for years to come. The sustainability of your future is important to us and we are driven to help you plan a life that is profitable and supportive of your needs and goals.