Whether you are in the early stages of planning to file for divorce in Texas or you have already begun the divorce process, it is critical to understand how the division of community property works according to Texas law and what the division of community property will mean for your assets and liabilities once the divorce is finalized. The following are five issues to consider when it comes to Texas divorces and the division of community property.
Texas is a Community Property State
Texas is a community property state when it comes to divorce and the distribution of assets and debts. While some community property states say that all community property is divided equally, or 50-50, between the parties, Texas is a bit different. Under the Texas Family Code, the court “shall order a division of the estate of the parties in a manner that the court deems just and right, having due regard for the rights of each party and any children of the marriage.” As such, the court can look to the specific facts of each situation to determine how community property will be divided.
Assets Will Be Classified As Separate or Community Property
In order to divide community property, Texas courts must first classify all property belonging to the spouses, including both assets and liabilities, as either separate or community property. Community property is defined by the Texas Family Code as “the property, other than separate property, acquired by either spouse during marriage.” Separate property can consist of “the property owned or claimed by the spouse before marriage,” any “property acquired by the spouse during marriage by gift, devise, or descent,” and any “recovery for personal injuries sustained by the spouse during marriage.”
Spouses Can Reach an Agreement Concerning the Division of Property
Courts do not necessarily need to make the final decision about the division of community property. In situations where spouses have a valid and enforceable premarital or postnuptial agreement, the court will uphold the terms of the property division agreement. Similarly, if the spouses negotiate a property settlement as an “agreement incident to divorce,” then the court will also uphold that agreement as long as it finds that the terms are “just and right.” A recent article from Harvard Law School’s Program on Negotiation emphasizes that divorce negotiations can be beneficial to many spouses under the right circumstances.
Commingled Property Can Result in Complications
When separate and community property have become commingled, significant complications can arise. What is commingled property? In short, it is property that has elements of both separate and community property. Typically, spouses end up with commingled property when they mix separate property with community property in some manner (such as using assets in a separate bank account to make improvements to the marital home). If the court cannot trace out the portions of separate and community property in the commingled property, it may classify the commingled property as either separate or community property in its entirety.
Concealing Assets Can Amount to Fraud on the Community
If a spouse attempts to conceal assets, to intentionally dissipate community assets, or to engage in any other kind of behavior that would result in an unfair distribution of community property, then that spouse can be penalized for committing fraud on the community.
Contact Our Bedford Divorce Attorneys
When you are considering divorce in Texas or you are already in the process of moving forward with a divorce case, you should have an experienced Bedford divorce lawyer on your side. The division of community property in Texas divorces can be quite contentious, and it is critical to have an advocate who can ensure that all community assets and liabilities are in fact divided according to the Texas Family Code. Contact Hargrave Law, PC today for more information about how our firm can assist you with your divorce case.