Texas Property Division Overview
Texas is one of nine states in the United States operating under a community property system. In dividing an estate upon divorce, the property will be characterized as either community or separate.
Property division can be one of the most hotly disputed aspects of a Texas divorce case. Individuals are not only in the process of separating from their family member, but they also must consider how to divide the assets each of them has accumulated during their married life together.
This often exacerbates the already stressful considerations individuals experience during divorce. Property acquired by a spouse during the marriage is presumed to be community property subject to division by the court.
Although the preference in any divorce situation is for parties to be able to work together to reach an agreement regarding the division of their assets and liabilities, there are times that an agreement proves impossible due to polarizing opinions of the parties regarding how the community estate should be distributed between them.
When this occurs, it becomes necessary for the court to apply Texas state law and divide the estate in what the court determines to be a just and right manner. The process is rarely as easy as divvying existing assets up evenly between the parties.
The initial inquiry for a court always revolves around classifying separate versus community property. Once the community estate is established, the court must also consider other factors including:
- Length of the marriage
- Income disparity between spouses
- Existence of minor children
- Health of the spouses
- Educational background and; each spouse are all relevant considerations for the court.
- Business opportunities
The initial inquiry in determining what property is available for the court to actually divide between the spouses in a Texas divorce case centers around determining the character of the property in existence at the time the divorce is filed. Generally speaking, assets and liabilities will be characterized as either separate or community at the time of the divorce.
- is the property that is owned by a party prior to marriage, inherited during the marriage, or given to a spouse during the marriage.
- All assets acquired by spouses during their marriage are legally presumed to be community property.
- In divorce proceedings, this presumption can be rebutted by offering clear and convincing evidence that an asset or liability belongs to one of the party’s separate estates.
At the outset of a case, it is essential to begin classifying assets and liabilities into one of these two categories in order to determine what property should be included in the community estate. A Houston property division attorney can help start that process by guiding you in gathering the documentation and information you may need to ensure your assets and liabilities are accurately identified as separate or community property.
‘Just and Right’ Property Division
As a community property state, Texas law begins with the premise that the community estate should be divided between the parties in a ‘just and right’ manner. What constitutes ‘just and right’ however, varies based on the circumstances of each particular case.
In some instances advocating that an estate be divided equally between the parties may be appropriate. In other cases, a more aggressive approach may be warranted. This may include seeking a disproportionate division of the community estate in favor of one spouse, alleging waste claims, and/or seeking a reimbursement claim from one marital estate to another.
Frequently Asked Questions About Asset Distribution
Once you categorize separate and community property, Texas law requires that all community property be divided in a just and right manner between the parties.
Unfortunately, there is no precise formula for the division. Rather, the court looks at a variety of factors in determining what a just and right division may include and this can vary depending on the circumstances of each individual case. Some commonly asked questions include:
Does community property have to be divided equally?
Assets must be distributed between divorcing spouses equitably, but this does not always mean a 50-50 split.
Instead, the statute provides that division of community property must be a just and right division, as referenced above. There may justifiable reasons to for a disproportionate division of the estate in favor of one spouse over the other, especially when one spouse will be a custodial parent, there is an income disparity, a fault-based grounds for divorce, and/or a party possesses separate property of considerable value.
Can we agree on property division?
Texas law encourages parties to agree on asset distribution whenever possible and generally when this occurs the agreement will be approved by the court.
Houston property division lawyers can be very valuable in assisting litigants in negotiating the terms of the agreement, drafting the final agreement and decree of divorce, and ensuring a litigant obtains proper court approval.
Does fault matter for property division in a Texas divorce?
For the most part, Texas is a no-fault state for purposes of divorce; even though there are grounds for dissolution of marriage under the statute, most couples opt for “insupportability,” which does not place blame on either spouse for the dissolution of their marriage.
However, there are instances when it is appropriate to plead a fault-based ground in divorces such as cruelty, adultery, or abandonment. If the court determines the divorce was based on one of these fault grounds then that is something the judge may consider in determining how to divide assets between the parties.
How do I know what assets are community property for purposes of property division?
The inquiry begins by properly identifying all assets and liabilities on hand at the time of divorce. This can be achieved through issuing various forms of discovery and by the parties exchanging sworn inventories and appraisements with supporting documentation for the same.
What if my spouse is hiding assets?
If you have concerns about community property items that do not appear on the inventory, there are tools that property division lawyers can use to find them.
Discovery rules allow you to present written interrogatories and requests for documents, and you can depose your spouse. The same court procedures enable you to bring assets properly before the court, so they can be divided equitably. In the event of misconduct, the court may also issue sanctions against the offending party.
How are debts divided?
Financial obligations are divvied up just as community property, in a just and right manner; however, you should exercise caution if your name appears on a debt that your spouse is directed to pay.
Your credit may be negatively affected by non-payment or late payments, so it is wise to consult with an attorney to help you determine how to eliminate any shared debts.
Complex Property Division Issues
While real estate, bank accounts, vehicles, and other personal property may not be difficult to divide between divorcing spouses, other assets are not so straightforward. There may be disputes because of valuation methods, tracing separate property claims or the validity of appraisals pertaining to certain property. Issues often arise with:
- Ownership interests in a business, especially as they pertain to goodwill;
- Complex investment accounts;
- Retirement benefits;
- Beneficiaries to a trust; and
- Other complex property division questions.
Our Houston Property Division Attorneys Can Advise You on Your Rights
Considering the complex legal landscape and emotional factors involved in a divorce action, it is essential to have a Houston attorney familiar with all aspects of property division at your side to help you navigate the process. Our lawyers at the Stout Law Firm possess more than 20 years of combined experience in a wide range of family law issues, including property division.
Please contact our office to schedule a consultation with an attorney, and read on for some important information about your rights.
At The Stout Law Firm, P.L.L.C. our lawyers have in-depth knowledge about a marital property in Texas and relevant considerations in the distribution of assets in a divorce case. We will protect your rights if you would like to pursue an agreement on property division, and will strive for fairness in the process.
If a compromise is not possible, we will advocate fiercely on your behalf in court. In addition, our attorneys have extensive experience in dealing with complex assets and high net worth estates. Our Houston property division lawyers are here to assist you in navigating this difficult time in your life. For more information on how we can help, please contact our office at 713.980.4300. We are happy to schedule a consultation with you today to review your legal options.
Angela A. Stout is an experienced Houston attorney and qualified in handling complex characterization claims and stands ready to guide you through this important process.
Contact us today to set up a consultation regarding the options available to you.