There are many different elements at play when it comes to divorce. While many separating couples may need to consider child custody and support, others may need to take a bigger view of their finances into account. One element likely to be present in most divorces is property. Understanding how marital property law works in Texas can help those considering divorce in the Lone Star State be better prepared for determining ownership after separating.
What is Marital Property?
Marital property refers to property acquired during marriage. Property owned by individuals prior to a marriage is considered separate property, as are items like inheritances or third-party gifts given to one spouse during a marriage. Spouses may also choose to exclude certain items from being classified as marital property through a pre or postnuptial agreement.
Marital property, however, can include items such as homes, investment properties, cars, boats, furniture, and even artwork. Additionally, bank accounts, pensions, securities, and retirement accounts can also be considered marital property. Individual state law determines how marital property will be classified and how it can be divided during divorce.
What to Know About Texas Marital Property Law
While it may seem simple to determine what does and doesn’t constitute marital property, it is actually a fairly complex process in Texas. Some of the most important things to keep in mind about Texas marital property law include:
- What Constitutes Community Property
Texas is known as a community property state, meaning all property acquired by a spouse during the marriage is automatically considered community property, unless it can legally be shown to be separate property. This means that regardless of whether the property is titled in one spouse’s name, it is still jointly owned if acquired after marriage.
- What Constitutes Separate Property
On the other hand, separate property in Texas refers to property that was either owned by a spouse prior to marriage, property that was acquired during the marriage as a gift or via inheritance, or property that constituted a legal recovery for injuries sustained during a marriage unless the money was for loss of earnings. Additionally, increases in the value of separate property during the marriage remain classified as separate property; however, income generated by separate property that is distributed to or received by a spouse becomes community property.
- The Complexities of Having Mixed Assets
When married, it’s incredibly common for couples to mix or commingle their assets, making them “mixed assets.” Commingling occurs when separate and community property are mixed in such a way that it becomes difficult to trace the items back to the source. And, since all assets are considered community property unless otherwise proven, mixing your assets can lead to a significant financial loss.
- What a Property Division Entails
Although many assume community property means everything is split 50/50 split in a divorce, this is not the case. Under the Texas law pertaining to asset division upon divorce, a court must order a division of the marital estate in a manner it deems as just with regard for the rights of each party as well as for any children involved. This leaves property division to the discretion of a judge. While a 50/50 split can happen, it’s not always easy to achieve.
Some of the factors a court considers when dividing marital property include:
- The ability of each spouse to support him/herself after divorce
- The parent that will have primary responsibility for the children and related circumstances following a divorce
- Any age disparities in the marriage
- The education or employment of the spouses
- The health and physical condition of the spouses
- Who is at fault in the breakup of the marriage
- Tax consequences of property division or the nature of the property divided
Brazoria County Divorce Attorneys
When considering divorce, property division is often a big concern. Divorce is an incredibly complex process and many difficulties can stem from property division and/or not knowing what is and isn’t jointly owned. Because of this, it’s important to hire a Texas divorce attorney with your best interests at heart. At Terry & Roberts, our lawyers work to establish goals with our clients to reach the best possible outcome. If you are considering divorce and would like to learn more about our services, contact us today for more information.