Property division is often the biggest source of anxiety in a Texas divorce. People don’t fully understand community property laws and often worry that they could end up at a major financial disadvantage when dividing their resources with their spouses.
Contrary to what people might believe, community property rules do not always lead to a 50/50 division of marital property. A judge dividing marital assets and debts often starts with the assumption that an even split would be reasonable but can set whatever terms they ultimately decide are equitable based on family circumstances. Judges typically only have control over the distribution of marital property in a litigated divorce, not separate property.
What is the difference between marital property and separate property in a Texas divorce?
How and when someone acquires property matters
Some people assume that anything they own or anything their spouse owns is subject to division in a Texas divorce. However, it is very common for people to enter a marriage with pre-existing resources or financial obligations.
Property that someone acquired before marriage and debts that they already owed at the time of marriage are typically their separate assets and debts. Barring some kind of marital agreement establishing other terms, property accumulated prior to marriage remains the separate property of one spouse, well whatever people acquire or earn during the marriage is marital property subject to division.
Similar rules apply to debts. The timing of the acquisition of the debt and sometimes also the intent behind taking on the financial responsibility influence how the courts divide resources and obligations during a divorce.
For the purposes of property division, there are a few other types of assets that could also be separate property. Gifts that someone receives during a marriage are usually their separate property. Additionally, someone’s inheritance is usually separate property that they do not need to share with their spouse when they divorce.
Occasionally, property that could be separate is at risk of division in a divorce if one spouse can prove that there was commingling of that separate property with marital resources. Additionally, the use of marital assets to maintain separate property could put some of the value of those resources at risk. Both business holdings and real estate are types of assets that require ongoing investment during a marriage and could be partially vulnerable during divorce proceedings.
Someone who is concerned about securing fair terms in a Texas divorce may need to go over their financial records very carefully with a skilled legal team to establish which assets are part of the marital estate and what property they could potentially protect as their separate resources. Learning more about the basics of Texas property division laws may benefit those preparing for divorce.