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FAQs About Property Division and Divorce in Texas. Part One

One of the most contested issues in divorce cases is how to divide the marital property. The more assets you’ve accumulated with your spouse during the marriage, the more likely you’re going to argue about the value of each asset and who gets which asset. The disputes can escalate if one or both spouses has a business and/or retirement accounts. If there are children, then decisions need to be made about the marital home.

At Lyttle Law Firm PLLC, we have extensive experience negotiating and litigating all family law issues include the division of your property. Often, we use alternative dispute resolution methods such as mediation and collaborative divorce, to help settle property division disputes.

Here are some of the questions we’re often asked -along with some general answers. The best course of action is to call us. We’re happy to answer your questions in person.

Texas is a Community Property State. What Does That Mean?

There are only 9 community property states in the United States. These states include Texas, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Washington, and Wisconsin. The term community property generally refers to the division of marital assets in a divorce. Some community states require that all marital property be divided 50/50. Texas, however, uses the 50/50 split as a starting point. In Texas, the 50/50 presumption can be altered based on the courts’ review of many different factors such as the health of the spouses, any fault in the breakup, future earning capacity, and other factors.

The basic idea is that it doesn’t matter how your property is titled. All property acquired during the marriage belongs to the community of spouses.

Marital property vs. separate property. One key issue in dividing property in Texas is that some property is considered separate property while other property is considered marital property. Marital property belongs to both spouses. Separate property belongs to the person who properly acquired it. You get to fully keep separate property. You need to equitably split marital property.

According to Family Code Statute 3.001, a spouse’s separate property consists of:

  • The property owned or claimed by the spouse before marriage
  • The property acquired by the spouse during marriage by gift, devise, or descent
  • A recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage

In many cases, whether property is separate is clear. In some cases, it can be difficult to assess. For example, if you start putting money into a 401 (k) while you’re single and continue those deposits while you’re married, an evaluation must be made as to what part of the 401 (k) is separate and which part is marital.

The increase in value of separate property during marriage, such as a home, may be considered marital property – especially if your spouse contributes to the increase. For example, if you own a home before marriage and your spouse helps pay the mortgage after you marry, then the increase in equity in the home is likely marital property.

The longer the marriage, the more likely it is that the property each of you own is marital property unless you received it through a gift, a devise, or as part of a personal injury award.

How is Marital Property Divided?

Generally, if you have a prenuptial agreement, that agreement controls how property is divided in a divorce.

If there’s no prenup, then any separate property you own you can keep. The marital property is divided. Marital property generally includes homes, bank accounts, stocks, personal possessions, businesses, vehicles, and retirement accounts. Marital property also includes marital debts.

The starting point for the division of your marital property is a 50/50 split. The final distribution will change depending on what the judge believes to be an equitable/fair split. To decide what’s fair, the judge will review the following factors:

  • The health and age of the spouses
  • Your level of education
  • The earning potential of each spouse
  • The need for future support of a spouse
  • Whether you have a business
  • Your employment opportunities
  • Who has custody of the children
  • Whether fault, such as adultery, caused the breakup
  • Whether a spouse has been mismanaging any assets
  • The type of property to be divided
  • Tax issues

Each judge is different. Some judges may weigh one factor more heavily than other factors. An experienced family lawyer will help you properly value each asset. She’ll also help you prioritize the assets you want to keep. Many property disputes are resolved through agreements.

Many times, there are creative solutions such as arranging buy-outs or trading off the things you don’t want for things your spouse does want.

How is Debt Resolved in a Divorce?

Debt is a natural part of marriage. The largest debt obligation most people acquire during a marriage is a mortgage. Most spouses finance their vehicles through loans. Other common types of debt people have to pay include student loans and credit cards. Business owners may borrow to start their business. Some spouses develop gambling debts.

In many cases, both spouses are obligated to pay the loans because they both signed for the loans. Generally, debts are handled the same way assets are handled. They are first categorized according to whether they are separate debts or marital debts. Both spouses owe on marital debts even if the debts are just in one spouse’s name.

Just like marital property, marital debts are divided equitably so that you’re generally liable for debts that benefited both of you. If your spouse acquired debts irresponsibly, then fairness requires that he/she should be solely responsible for those bad debts.

Learn Your Rights. Speak With a Knowledgeable Texas Divorce Lawyer Today

Your future depends on a fair and just division of your marital assets. Some spouses try to hide their assets. Many assets can be difficult to value. At Lyttle Law Firm, our Austin and San Marcos family lawyers fight for spouses in Travis, Hays, Comal, Williamson, Bell, Caldwell, Burnett, Llano, and Guadalupe Counties. We work aggressively to ensure your marital property is divided so that you can start your new life with financial stability. Call us at 512.215.5225 or use our online form to schedule an appointment.

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