All states provide for a more-or-less equitable, but not necessarily equal, division of marital property. Texas is a “Community Property” state, meaning that most of the property – including both spouses’ incomes – acquired during marriage belongs to both spouses, and that property will be divided during divorce. That does not mean that every asset gets split 50/50: the separate property of each spouse will remain their own at divorce. In Texas, however, all property is presumed to be community property unless you can show sufficient evidence to prove that it is separate.
According to the Texas “Family Code,” a spouse’s separate property consists of:
Examples of property that could be separate include:
If you and your spouse are able to come to a mutual agreement of how to divide your community property, that will likely save you both time and money. However, your Texas property division agreement could be subject to the court’s approval. In a divorce case, the judge must weigh all the facts in evidence and create a “just and right” division of the community assets and debts. Of course, what you consider “just and right” may differ greatly.
Despite lore to the contrary, most divorcing couples are able to negotiate a relatively fair division of their community property without having to ask a judge to make all the decisions for them. For those unable to come up with a mutually agreed upon division of property, most state law provides a list of factors that courts consider in making a final. The factors that Texas courts may consider when dividing your property could include the following:
When the actions of one spouse during or after the breakdown of the marriage results in the loss of property owned by both spouses, the innocent spouse usually harmed because there is less property to distribute upon final dissolution of the marriage. The concept of dissipation of marital assets has developed to discourage such actions and to provide a remedy for innocent spouses.
In general, only conveyances of marital assets that are made or caused by one spouse, in anticipation of divorce, and for a non-marital purpose constitutes a dissipation of marital assets.
The following remedies may be available to a person whose spouse has caused the dissipation of marital assets:
Debt division is considered part of the property division process. In community property states like Texas, liabilities, like assets, that are brought into the marriage belong to the spouse who incurred them. In equitable distribution of property states, the debt, like the property, is divided equitably between the parties. If the debt is secured debt, the general rule is that the value of the encumbered asset is reduced by the amount of the debt in determining division. For instance, this often happens in the case of family cars. For many divorcing couples, each spouse has a vehicle, but one may be a paid-for clunker worth relatively little with no car payment. The other may be a late model car worth well over $10,000, but with a loan balance equal to its present value. Despite the fact that the vehicles may have very different gross values, the net value for them is equal.
A very common problem for couples in our current economy is that they have accumulated high amounts of unsecured debt, with little asset acquisition during the marriage. This situation poses a complicated issue for debt division. In cases such as these, the advice of a financial consultant, or even a bankruptcy attorney, could be very helpful to the parties.
As with other property issues, if the parties cannot come to a fair and equitable division of debt on their own, state laws typically provide a rationale for courts to follow in making debt division decisions.