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Yours, mine and ours: Navigating community property laws in Texas

| Apr 19, 2018 | Blog |

Right up there with child custody, property division is a hotly debated topic during divorce proceedings. Both spouses worked to amass wealth during the marriage, whether by working or supporting the other spouse’s career by maintaining the household. When it comes time to divide the assets garnered together, correct property classification is key.

The basics of community property

Under the community property standard, both spouses own an interest in property acquired by either spouse during the marriage. Texas law specifies the property division during divorce needs to be “just and equitable”, which translates to fair but not necessarily even.

When determining property division, a judge will consider factors such as the age and earning capacity of each spouse, and the size of both the community and separate estates. For divorces involving children, custody may affect property division. Prenuptial agreements and other special orders may also come into play.

Marital or separate?

Although exceptions exist, separate property generally includes property owned before the marriage and inherited or gifted property. If a person can prove the property is separate, the court must award it to that individual. However, the court may classify property owned before the marriage as marital if a spouse used marital funds to pay off a mortgage. Alternatively, the court may order a spouse to reimburse the other spouse for a portion of funds used to pay the mortgage debt.

Marital property includes incomes for both spouses, such as salaries, bonuses and commissions. Retirement funds are also marital property. The name on a title, such as a vehicle, generally does not bear significance for property acquired during the marriage. Any property considered marital is subject to division by the court, which is why it is important to correctly classify property.

Texas marital property law is purposefully broad to function on a case by case basis and community property does not mean the marital estate gets split in half. Judges review the unique factors of each case and distribute assets according to relevant factors.

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