Understanding Marital Property Division in Texas Divorce
There is often concern about how marital property will be divided in a divorce case. By understanding Texas’s views on marital property, it is possible to simplify the divorce and come to an agreement on how property will be divided. This can also help relieve the stress and anxiety that comes with not knowing what to expect during a divorce. This article will give you an overview of Texas’ property laws and prepare you to understand how divorce proceedings affect marital property.
Property Characterization during the Divorce Process
Community Property
Texas uses the community property model to divide property in divorce proceedings. All marital assets acquired during a marriage are considered equal and must be divided equally between the spouses after the divorce. It doesn’t matter if the property was held only in one spouse’s name, as it is assumed to be part of community property.
The following are included in community property:
- All income earned during the marriage
- Financial accounts, retirement benefits
- Contributions to retirement accounts
- Long-term investments and other assets
- Marital debts incurred during marriage are treated as community debts
Assets that are separate property are the only exception to the community property law.
Separate Property
Separate property refers to property owned by one spouse before the marriage or acquired by one spouse during the marriage by inheritance, gift, personal injury settlement, or other means (except for any recovery due to loss of earning capacity). Separate property is not included in the community properties. Any asset that can be proven to be separate by clear and convincing evidence is considered separate property and will not be subject to property division in a divorce.
Before declaring an asset as separate property in the final decree, you must include a request to confirm that your separate property is being confirmed in your divorce proceedings pleadings.
The Merging of Property
Although community property can be divided fairly and legally during a divorce, separate property is solely the property of the spouse who acquired it. It is not subject to property division during a divorce. However, there are instances where the community and separate property can be entwined in such a way that makes it difficult to determine their opposite nature; this is called “commingling”. For example, it can be impossible to analyze the history of an asset when determining which parts of it are community property and which sections are separate property. In this case, the community property presumption will dominate and allow for property division.
Conversion of Property
According to Texas property law, a spouse’s separate property can be made into community property by agreement. To convert the property, both spouses must sign an agreement which identifies the property and states that it is to be converted to the spouse’s common property. This agreement will be used to prove that the spouse’s separate property was converted into community property.
It is not sufficient to prove conversion merely by transferring property titles or deeds to both spouses’ names.
Texas Property Matters Divorce Laws
Reimbursements
If one marital estate contributes or pays for an asset belonging to another marital estate, the paying estate can seek reimbursement. For example:
Before marriage, the wife owned a house. After getting married, the husband moves in and contributes to mortgage payments and renovations using a joint account. If the husband later files for divorce, the wife’s separate property can reimburse the community estate for funds spent, provided receipts and evidence exist.
Fraud in the Community
If one spouse transfers or spends community property without the consent or knowledge of the other spouse, it is considered “fraud on the community.” Fraud can be either actual or constructive:
- Actual fraud: The offending spouse acts dishonestly or with intent to deceive.
- Constructive fraud: The offending spouse breaches fiduciary duties, shifting the burden of proof to them.
Remedies under Texas Family Code include:
- Calculating the community estate’s value and the reconstituted property
- Dividing the reconstituted property fairly
- Awarding a money judgment to the wronged spouse
- Granting both a money judgment and a proportionate share of the community property
- Considering fraud in determining spousal maintenance
Finalizing the Division
Community Property Law and Dividing Property
The court will order the division of the parties’ estates under a no-fault divorce decree, distributing the community estate fairly and equally. Separate property remains with the owner. Exceptions exist for fault grounds or fraud, which may allow a disproportionate portion to be awarded to the wronged spouse.
Examples of fault grounds include:
- Cruelty
- Adultery
- Felony conviction and imprisonment of up to one year
- Abandonment for at least one year
- Living apart for at least three years
- Confinement in a mental hospital
The final divorce decree should specify how and when property will be divided. Deadlines, such as 30 days from the judge’s signature, may be included. If no agreement exists, the judge may provide specific instructions.
An experienced attorney can assist in transferring titles and ownership documents for vehicles and real property. Additional filings may be necessary to make transfers official.
Kamal Law Firm, PLLC can help manage marital property and ensure an equitable division. Mrs. Farah Kamal, an experienced attorney, can protect your personal property and negotiate a fair settlement during divorce proceedings.
