Anyone who is planning to file for divorce in Dallas should learn more about asset division and how assets are divided in divorce in Texas. When it comes to the division of assets in a divorce, Texas is a “community property” state, which is distinct from an “equitable distribution” state.
In most community property states, the court divides assets and debts from a marriage in a 50/50 split between the spouses, but the Texas Family Code requires courts to handle asset division in Texas a bit differently. Our Dallas asset division lawyers want to provide you with more information so that you can be prepared for the division of community assets in your Texas divorce.
Classification of Separate and Community Assets
Before a Texas court can even begin the process of dividing assets in your divorce, the court will first need to classify all assets owned by you and your spouse as separate property or community property. According to the Texas Family Code, separate assets include any assets you owned prior to the date of your marriage, any assets you acquired during your marriage as a gift from a third party or through an inheritance, and any assets you acquired during your marriage as a damages award in a personal injury case.
Nearly all other assets, unless they have been expressly excluded from the possibility of division through a prenuptial or a postnuptial agreement, will be classified as community property. The Texas Family Code defines community property, which includes both assets and debts, as “the property, other than separate property, acquired by either spouse during the marriage.”
You should also know that there is a presumption that any assets possessed by either spouse at the time of the divorce case are community property unless the spouse can prove otherwise. To prove that your assets should be classified as separate property, you must meet a high burden of proof: you must show that your assets are separate property by the standard of “clear and convincing evidence.”
Division of Community Assets in a Manner “Just and Right”
Any assets that are classified as community property will be divided “in a manner that the court deems just and right, having due regard for the rights of each party and any children of the marriage,” according to the Texas Family Code.
To be clear, although Texas is a community property state, assets are not simply split 50/50 between the spouses but rather are distributed between them in a way that is “just and right” based on the particular circumstances of the couple. In some marriages, a 50/50 split might be considered “just and right” by the court.
What factors will the court consider in deciding what a “just and right” division of community assets looks like? The following are some examples of factors the court might consider:
- Length of the marriage
- Health of the spouses
- Education of the spouses
- Size of the separate estates (or assets) of the spouses
- Differences in the spouses’ earning capacities
- Custody of minor children from the marriage
- Business opportunities for each of the spouses
- Nature of the assets being divided
- Contributions of one spouse to the home and to raising children during the marriage
- Fault for the divorce
Frequently Asked Questions About Asset Division In Texas Divorce
What is community property in Texas?
Community property refers to all possessions and income acquired by either spouse during the marriage. This includes salaries, real estate, and other assets1. By default, the court considers these jointly owned.
How is community property divided in Texas?
Community property does not automatically mean a 50/50 split. Instead, the division aims to be equitable1. Courts look at numerous factors to decide what is fair, such as each spouse’s earning capacity, health, and future needs.
What qualifies as separate property in Texas?
Separate property includes items owned before marriage, inheritances, and specific gifts. These assets remain with the original owner, provided they can prove their separate nature.
Can gifts be considered community property?
Gifts received during the marriage qualify as separate property, even if received during the marriage. However, if both spouses were meant to receive the gift, each might claim half as separate property.
What is the “inception of title” rule?
The “inception of title” rule helps determine whether an asset is community or separate property. This rule considers the status of the property at the time of its acquisition.
How are digital assets divided in Texas?
Digital assets like cryptocurrency, NFTs, online businesses, and social media accounts with monetary value are treated as property and valued at the time of division. Specialized expertise may be required to properly assess and divide these assets.
What should I do if my spouse starts selling off assets before the divorce?
Suspecting your spouse of selling off valuable community assets before the divorce is grounds for a court injunction. This will ideally stop your spouse from profiting off shared property before the separation3.
Are there any tax implications for asset division in Texas?
Yes, any assets awarded in a divorce settlement are subject to taxation and carry with them all outstanding debts.
Why is legal advice important in asset division?
Understanding Texas property division laws can be challenging. Consulting an experienced Texas divorce attorney can provide clarity and protect your interests.
What resources are available for understanding asset division in Texas?
You can seek guidance from family law attorneys, mediation services, and legal aid organizations to help you navigate the asset division process
Contact Our Dallas Asset Division Attorneys
If you have questions about asset division in your Texas divorce, an experienced Dallas asset division attorney at our firm can help. Contact Orsinger, Nelson, Downing, and Anderson, LLP for more information.
(Updated 2/3/2025)
