Dividing Marital Property Equally in Texas
Property division is often the most controversial aspect of Texas divorce. Here’s what to know about equitable distribution of marital property in Texas.
Texas is one of nine community property states, which means most property acquired during the marriage equally belongs to both spouses. However, Texas community property laws do not automatically divide property 50/50. The court considers several factors to award an equitable distribution.
What is considered community property in Texas?
In Texas, community property is all property either spouse acquired during the marriage, excluding separate property. All property is presumed community property unless one spouse claims an asset is separate property and not subject to division. A spouse desiring to protect an asset from division must provide clear and convincing evidence to prove the asset is separate property.
Related: Equitable Distribution vs. Community Property in Divorce
What is considered separate property in Texas?
Texas Family Code Section 3.001, et seq. classifies separate property as:
- The property owned or claimed by the spouse before marriage
- The property acquired by the spouse during marriage by gift, devise, or descent; and
- The recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage.
Providing a written agreement between spouses may also cause the court to classify an asset as separate property for:
- Income from the spouses’ wages, property, etc. received on or after January 1st of the year the divorce was filed; or
- Income from the spouses’ wages, property, etc., received in another year when the spouses were married for any part of the year.
Items are considered separate property if acquired during permanent residency in another state and would classify as separate property in Texas. Items are also regarded as separate property if a spouse acquired the property in exchange for property, classifying it as separate property in Texas.
Related: Property Entitlement If Your Name Is Not on Spouse’s Deed
How is community property divided in Texas?
While Texas recognizes community property laws, the court follows equitable distribution when dividing assets in a divorce. Texas Family Code Section 7.001, et seq. requires the estate of two spouses be divided “in a manner the court deems just and right, having due regard for the rights of each party and any children of the marriage.” A just property division may not always be equal. The court may consider a case’s unique marital and personal financial circumstances to determine equitable distribution:
- Fault in the breakup of the marriage
- Amount of separate property each spouse owns
- Required taxes to pay on certain assets
- Number of children and the children’s best interests (custody, child support, etc.)
- Each spouse’s education
- Ability to earn a sufficient income
- Impact of divorce on future financial standing and/or
- Any other factor the court deems relevant to the case
However, the court is not required to handle equitable distribution. Spouses may consult a family law attorney and divorce financial advisor to establish an agreement themselves. However, the court is not necessary to handle equitable distribution.
When does separate property become community property in Texas?
Situations where one spouse’s separate property becomes community property can occur in marriage. Houses and cars represent common items to transmute from separate property into community property. An asset bought before marriage is separate property but may become community property if the mortgage or car payments are made using funds obtained during the marriage. The non-owning spouse may recoup the money by asking for reimbursement of funds spent to pay for the other spouse’s separate property.
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