Divorce brings a lot of changes to people’s lives. It can change where you live, how often you see your children and even the people who you consider to be members of your family. On top of that, it almost certainly impacts the things you own – or thought you owned.
Divorces in Texas, as in every other state, come with a division of assets. Savings, property, and pretty much everything else you own will be divided between you and your soon-to-be ex-spouse. Not only is a property division in a divorce inevitable, but it also can be one of the most divisive issues in the entire proceeding—sometimes even more than child custody, visitation, and support. That raises the question: how does Texas approach the division of assets?
Texas Is A Community Property State
Texas is a community property state. In Texas Family Code Sec. 3.002, it states that everything you acquire during your marriage – money earned, real estate purchased, and any other property obtained– is considered to belong equally to both spouses and will be divided by the Court. Texas divorce courts are required to consider and divide all marital property between the two spouses, usually treating all debts and assets incurred during the marriage as shared equally between the divorcing spouses.
There is a caveat to this, however: the court can order a division of property that is not equal when there are “just and right” reasons to do so. While “just and right” is only two words, it actually consists of many factors left to the discretion of the Court, after considering both spouses’ rights.
Initially, the court proceeds from the assumption that everything is community property to be divided equally. To show that something acquired during the marriage is not community property requires clear and convincing evidence in support. General categories of non-community “separate property” are items owned before marriage, items acquired by gift or inheritance, certain types of disability benefits, and some personal injury lawsuit proceeds. This being Texas, there are specific complicated rules for separate and community interests in certain assets such as ranches, livestock, and mineral interests.
If something is shown to be separate property, it is not part of the Court’s division of property and would be confirmed as belonging to the separate estate of the party who owns it.
Frequently Asked Questions About Asset Division In Texas
What is community property?
Community property includes all assets and debts acquired by either spouse during the marriage, regardless of whose name is on the title. This can include income, real estate, vehicles, retirement accounts, and other personal property.
What is separate property?
Separate property includes assets and debts that were acquired by one spouse before the marriage, as well as gifts, inheritances, and personal injury settlements received by one spouse during the marriage. Separate property is not subject to division during the divorce.
How is community property divided in Texas?
Texas follows the “equitable distribution” principle, which means that community property is divided in a manner that the court deems fair and just. This does not necessarily mean a 50/50 split. The court considers factors such as the length of the marriage, each spouse’s financial situation, contributions to the marriage, and any marital misconduct.
Can spouses agree on how to divide their property?
Yes, spouses can reach an agreement on how to divide their property through negotiation or mediation. If they can agree, they can present their agreement to the court for approval. If they cannot agree, the court will make the final decision.
What happens to debts in a divorce?
Just like assets, debts acquired during the marriage are considered community property and are subject to division. The court will consider each spouse’s ability to pay and the nature of the debts when dividing them.
Can one spouse be awarded more property than the other?
Yes, the court may award one spouse a larger portion of the community property if it deems it fair based on the circumstances. Factors such as the needs of the children, the earning capacity of each spouse, and any misconduct can influence the division.
How are retirement accounts divided in a divorce?
Retirement accounts, including 401(k)s and pensions, are considered community property if they were earned during the marriage. The court may divide them through a Qualified Domestic Relations Order (QDRO), which outlines how the funds should be distributed.
What if one spouse tries to hide assets during the divorce?
If a spouse tries to hide assets, the court can take action to uncover the hidden assets and ensure a fair division. This can include financial investigations and penalties for the spouse attempting to conceal property.
Are there any tax implications for asset division?
Yes, there can be tax implications for dividing certain assets, such as retirement accounts and real estate. It’s important to consider the tax consequences when negotiating a property settlement.
What role does a prenuptial agreement play in asset division?
A valid prenuptial agreement can outline how property will be divided in the event of a divorce. If the agreement is fair and enforceable, the court will generally follow its terms.
Consult The Dallas Asset-Division Lawyers Of Orsinger, Nelson, Downing, and Anderson LLP
Divorce isn’t easy, and neither is the division of property that inevitably follows. To ensure that you get all of the community and separate property to which you are entitled, you need expert help. The Dallas asset-division attorneys of Orsinger, Nelson, Downing, and Anderson, LLP can provide that help. You can reach us at (214) 273-2400.
Our talented Texas divorce attorneys also have offices in Frisco, Fort Worth, and San Antonio. Out of 100,000 lawyers in Texas, there is no other law firm that has more attorneys on the Thomson Reuters list of Top 100 Texas Super Lawyers. That means you can have confidence that you will be getting quality work on your behalf.
(1/28/2025)