Division Of Marital Property In A Divorce

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Broken home drawing with a gavel in the middle and money on both sides.
Division of assets and marital property in a Texas divorce

When you and your partner decide to move forward with divorce, you will have to divide all of the property you purchased, accumulated or earned over the course of the marriage. Division of marital property is often one of the most difficult aspects of the divorce process, particularly when it comes to valuable marital property to which you may have an emotional attachment. In many cases, this includes the family home.

What Qualifies As Marital Property?

All the property of a couple is classified as either community or separate property. In the state of Texas, marital property laws have the concept of community property. All property acquired by the couple is divided equally on divorce. If you have a prenuptial agreement or other special orders, that can alter the distribution of property.

Community Property

All property and debts that you or your spouse acquire during your marriage are considered community property. However, there are exceptions and you may provide evidence to prove separate property.

Separate Property

Texas law defines separate property to be the following:

  • Inheritances, family heirlooms and any property passed down by descent at any time
  • Gifts (You can claim half of a shared gift. Gifts are still considered as separate property)
  • Property purchased before marriage
  • Personal injury awards (except any recovery for the loss of earning capacity of one spouse during marriage)

Property purchased with a combination of separate and community property may be considered as community property. If you used your inheritance to buy marital assets such as the marital estate (property owned jointly by both spouses), you cannot claim the portion of the house value as your separate property.

Does Marital Property Include Separate Bank Accounts?

Separate bank accounts are considered marital property. Community property states which include Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin will split these funds equally.

You need to prove that you acquired the money in your bank account before the marriage to claim it as separate property. An attorney can help you to determine if you have a strong case for this.

Are Assets Always Split 50/50 In A Divorce?

Generally, courts can divide property either through community property or equitable distribution. Equitable distribution is the most common type of property division in the United States.

In community property states, property and debts acquired by either spouse during the marriage is shared equally. The presumption is that the property division will be 50/50 even if only one person is working. You have to justify why this division is not fair and equitable.

In other states that use equitable distribution for property division, assets and earnings accumulated during the marriage belong to the spouse who earned it. The judge will consider a number of factors when dividing assets in states that practice equitable distribution.

It is illegal to hide assets from property division by the court. The court has the right to punish you by imposing sanctions or awarding a percentage of the hidden asset to your spouse in some states. In the state of California, the court can award 100% of the value of the hidden asset owned to your spouse.

Property Division In The State Of Texas

Texas is a community property state where courts will divide community property on a 50/50 basis regardless of who owns more separate property.

The state of Texas splits the value of assets fairly but not necessarily equally. The court may award each spouse a percentage of the total value of the property that does not necessarily mean 50/50, depending on the following factors:

  • Earning capacity
  • Needs of the children and spouse
  • Age and health
  • Education level
  • The spouse that has primary custody of the children

You can agree with your spouse on the best community property division which can save time in court. For example, spouses can submit a marital settlement agreement to the court to let the husband take over the mortgage debts but he gets the house, while the wife gets the car.

The court steps in if spouses cannot agree. The judge may order the division of marital property and debts according to equitable terms.

Property Division Of The Marital Home

Dividing up the family home can be one of the hardest decisions in a divorce.

Spouses may opt to simply keep the house and share expenses, deciding to wait and sell until after the children have grown up and gone. After the children move out, they may then decide to sell and share the proceeds. In other situations, one spouse may buy out the other. This will allow that spouse to remain in the marital home, which is sometimes a way to provide stability and continuity of lifestyle for the children.

It is often most prudent to simply sell the house and share the profit from the sale. The cost of one or both spouses keeping the home may not be feasible. Selling can allow both parties to move on and get a fresh start in a new home. Whatever you and your partner decide to do, the property division order should clearly spell out your plans and intentions.

It’s extremely important to get the help of an attorney when it comes to the division of a house or land. You could lose ownership and still be liable for mortgage debt. Without a lien, you could also have difficulty enforcing terms where your spouse has to pay you part of the value of your house. An attorney will file a Special Warranty Deed so you can sell the property later.

Seek the help of an attorney to learn more about your property rights and other options before agreeing to any divorce terms.

Texas law does not recognize legal separation.

However, you may make a temporary agreement that covers property division while your divorce is pending. If the judge deems the agreement to be fair, they may consider it in the final divorce judgement and approve the order.

You can also draft a partition and exchange agreement. This states the marital property that you and your partner get so that it becomes your personal property. If both spouses decide to file for divorce later, the property in this agreement will not be divided because it is now considered as personal property.

However, if you and your spouse decide to get back together, you need to amend or terminate the agreement. Otherwise, you will not receive your spouse’s separate property if your spouse passes.

What Should You Not Do During Separation?

Do not spend large amounts of money or give gifts without the consent of your spouse before you finalize the divorce. Your spouse has the rights to claim the funds. These may be considered to be property acquired during the marriage.

Seeking legal advice on the division of marital property? Let the award-winning Family Law experts at Sabelhaus and Lynch help you prepare your legal case.

Contact us today for a no-cost case review.