Over the course of a marriage, people often accumulate lots of property — a house, cars, bank accounts, retirement accounts, and other valuable possessions. How is this property divided if the parties decide to separate?

The division of marital property is often one of the most contentious issues in any divorce, with a lot at stake financially and emotionally. If you are thinking about getting divorced, it is important to understand a few key concepts about how your property is going to be divided.

The first important concept to understand is that Texas is a community property state. What does this mean? It means that property acquired during the marriage is generally considered to be owned equally by both parties. This is called community property.

Property acquired before the marriage is the separate property of the spouse who acquired the property. This is called separate property.

There are a number of exceptions and wrinkles to these general rules, which we discuss later on. But it is important to understand that the first step in dividing a marital estate is to figure out which property is community property and which property is separate property. Only the community property is subject to division.

Once you know which property is part of the community estate, how is that property divided between the parties? Texas law requires a “just and right” division of the property. The law presumes that a 50-50 division of property is just and right under most circumstances. However, a court is allowed to award a disproportionate amount of the property to one party or another for a variety of reasons. This is explained in more detail below.

Community v. Separate Property

Separate property is property that was acquired or created apart from the marriage. A divorce court cannot take your separate property away and give it to your spouse, so once you establish property as your separate property you are absolutely entitled to keep it. The following are your separate property:

  • property acquired before the marriage
  • property acquired by inheritance at any time
  • property acquired by gift to you alone, including gifts from your spouse
  • property acquired from a personal injury lawsuit or settlement at any time
  • property acquired under written agreement that it is your separate property
  • property acquired using other separate property or funds

Any other property acquired during the marriage that does not fit into any of these exceptions is community property.

Income is community property. Therefore, your spouse’s salary earning during the marriage is community property. Even if income comes from a separate property, like rental income from a separate house or profits from a separate business, that income is community property if earned during the marriage.

Retirement and disability income can be community or separate property depending on the circumstances, but generally speaking, retirement and disability benefits that are earned during the marriage are considered community property. Likewise, there are specific rules that apply to the different kinds of military retirement and disability benefits that are too detailed to get into here. You should speak to a lawyer about your specific situation.

Business interests generally follow the inception-of-title rule. This means that an interest in a business — whether a corporation, partnership or sole proprietorship — is separate property if acquired or created before the marriage and is community property if acquired or created during the marriage.

Debt follows the same basic rule. Debts acquired before the marriage are usually separate property. Debts acquired during the marriage are usually community property.

Pets follow the same inception-of-title rule. A pet that was purchased or adopted during the marriage is community property. If purchased or adopted before the marriage, the pet is separate property.

Just and Right Division of Community Property

Once we know what property is part of the community estate, how is that property divided between the parties? The Texas Family Code says courts should divide the property in a “just and right” manner. But what is just and right?

The Family Code also says that an equal 50-50 distribution is presumed to be just and right. But courts are allowed to deviate from 50-50 if they think it is right to do so in a particular case. Court can look at many factors in making these decisions.

Courts often look at whether one spouse needs more support than the other, such as:

  • the education and employment prospects of each spouse
  • the size of the separate estates of each spouse
  • the age and health of each spouse

In addition, courts can look at whether one party was more at fault than the other party in the breakup of the marriage, for example, by adultery or domestic abuse.

Similarly, a court can consider if one spouse has been cheating the community estate, for example, by taking money out of the community estate and spending it wastefully or hiding it. Courts can also look at other factors, like the nature of the property at issue and tax consequences.

Many people wonder what happens to a house they bought with their spouse during the marriage because a house cannot be easily divided. There are two main ways of dealing with that situation. One option is to sell the house and split the proceeds.

Another option is to award the house to one spouse, and the other spouse would get money or assets equivalent to their equity in the house. In other words, if the parties have $40,000 in equity in a house (value minus debt), the house is awarded to one spouse while the other is awarded $20,000 in cash or some other asset from the community estate to “buy out” their equity in the property.

Contact our San Antonio Marital Property Division Lawyers

If you have bank accounts, retirement accounts, vehicles or a house, you will need to address those properties in your divorce. You want to get your fair share of the assets you have accumulated during your marriage. The family law attorneys at Salmon Haas Law have deep experience in handling these kinds of cases. Contact our knowledgable attorneys today for a free consultation on property division in your divorce.

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