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Equitable is Not Always Equal: What to Know About Texas Division of Property in Divorce

by | Dec 11, 2023 | Community Property, Divorce

During a divorce in Texas, either the parties or the court must determine what happens to community property. Parties who work together to determine division of property may pursue alternative dispute resolution methods such as mediation, but in some cases, these soon-to-be-former spouses cannot agree, and it falls to the judge to determine how to split this property.

Community property division is just one element of decision factors made during a divorce, as this process can also include things such as determinations over spousal support, and child custody, among other things. While all aspects of a divorce could be complicated and have a big impact on your new life, community property is one of the most widely misunderstood aspects of Texas family law.

Many people are under the mistaken impression that community property will be divided on a 50-50 basis, with each party receiving a relatively equal share of the property accumulated during the marriage.

Since so many factors may influence the division of property and since this is likely a major consideration for your financial life after divorce, it is extremely important to find a Texas family lawyer who understands these complex issues and will help you navigate the divorce process.

What is Community Property?

Texas law defines community property as all of the earnings and property of both spouses that is acquired during the course of the marriage. It does not matter whose name is on the note, title, account, or contract, so long as the item in question was purchased between the date that the parties got married and the date of the divorce. There are some exceptions to this general community property definition, including assets a spouse had prior to marriage, awards from personal injury settlements, inheritances directed to one spouse, and gifts that were designated for one spouse.  These exceptions are identified as “separate property” and the court cannot award one party’s separate property to the other party.  However, the party claiming to have separate property is responsible for proving to the court that certain property is, in fact, that party’s separate property.

Some of the most common examples of community property that may be totaled together for the process of property division include:

  • A home or real estate purchase during the marriage
  • Vehicles purchased during the marriage
  • Income from employment, including all tips, salaries, wages, and overtime
  • Retirement contributions to a 401k or pension accounts starting on the date of the marriage
  • Balances in savings and checking accounts (regardless of whether these are joint or single-owner accounts)
  • Payment for lost wages
  • Unemployment compensation

From the outset, it’s vital to hire the right attorney who understands your financial position, your concerns heading into the divorce, and property you may wish to push harder for in court.

What Do Texas Judges Look at in Determining Community Property Division?

The Texas Family Code outlines that community property should be divided in a “just and right manner.” Even when a judge tries to make things relatively equal, note that not all assets are necessarily equal. For example, dividing up a cash checking account may be relatively quick, but when compared with receiving a higher cash amount, the illiquid family home may have different financial implications for the receiving party. The home may be worth the same amount of money but must be sold at full market value to provide that person with the funds. For someone with more immediate cash flow needs, these are important considerations to discuss with a Texas family lawyer.

It is important to be able to come to the court with a full list of any and all community property so that you can verify that the total amount of accurate assets will be included in this division. While it is not uncommon for attorneys on both sides to aim for a 50-50 division of property during divorce, judges do have the discretion to apply numerous other factors to determine their final decision. Judges are not required to split things down the middle.

When deciding how to split up property, judges will look at things like:

  • Separate property owned by each spouse
  • Employability of the parties
  • Income earning potential of each spouse
  • Health needs or disabilities of a spouse
  • Health of each person
  • Ages of both parties

For example, perhaps one spouse does not have a high level of employability because they do not have proper education, training, or background. If this party gave up these opportunities in exchange for assisting as a homemaker, the judge may consider this in awarding property.  The judge may determine that due to this spouse’s inability to earn a living at the same level as the other party, that the homemaker spouse should be entitled to more in property division.

Hiring a Texas Family Lawyer Who Understands Community Property Division

When you get a divorce, there are many changes in your life. One of the biggest changes, and likely the most difficult change to adjust to, is your new financial position. Being able to step out of your divorce with a clear understanding of your assets and enough support to step into this new chapter can make a big difference in your life. As soon as you decide to file for divorce, or as soon as you learn that your spouse has filed, you need to discuss your specific case with the help of an attorney.

Working with the right lawyer can make it that much easier to understand all of the assets at play in a community property division and to have a comprehensive conversation about which assets make the most sense for you to receive. Your lawyer is then able to articulate these points in any conversations with the judge or the other attorney as necessary.

Contact Lacey N. Richmond to discuss your Texas divorce case today.