The part of a divorce that proves to be the most difficult time and time again (other than issues relating to children) is what ultimately happens with your community estate. The community estate that you and your spouse share is made up of property and debt that is considered a product of your marriage.
This means that neither of you can claim it individually as your own and must therefore be divided- either by agreement or by court order. Today’s blog post will center around this subject and the steps that can be taken to prepare for a discussion of these issues during your divorce case.
Settlement vs. Litigation
Most clients I have worked with have the mistaken idea that a judge will likely decide their divorce case after a trial has commenced. The fact of the matter is that divorce cases in Texas rarely go before judges for justice to be handed down. On the contrary, the vast majority of divorces conclude in a setting called mediation.
Mediation typically is where you and your lawyer will agree with your spouse and their lawyer to attempt to settle your case at a third-party attorney’s office. That third-party attorney is typically a family law attorney themselves and will help you all in your efforts to conclude your Divorce. The mediator acts as a go-between and voice of reason during what can become a heated negotiation session.
The other route to go is the one that involves heading to court for a judge to pay a tiebreaker on the issues that cannot be settled. You can settle 95 percent of your case in mediation and head to court for the judge’s decision on the remaining five percent. I can think of many other ways that you and your spouse could spend the money it takes to go to trial, but on occasion, the situation warrants a problem.
Either way, you should be aware that when it comes to the issue of community property division, a judge will have the best intentions of arriving at a fair and equitable decision. However, understand that the judge will not have enough time to learn everything there is to know about your family. The fact that divorce cases sometimes last two or three days can tell you an information gap even in the longest of divorce trials.
If you feel comfortable having a judge decide how to divide up your community estate even knowing all of this, then you would be among a small percentage of divorce litigants, in my opinion.
Don’t let there be a knowledge gap between yourself and your spouse regarding finances.
Many marriages have it set up that one spouse acts as the family banker. This spouse is in charge of making sure bills are paid, food is purchased, and the family home generally runs on schedule and under budget. This spouse often does not work and instead devotes time to being the home economist.
The other spouse perhaps has a full-time job with which the bills are paid and the groceries are purchased, but they don’t have the time to keep up with where exactly the family is in terms of finances. Having to learn about your family’s financial state on the evening before you hire a divorce attorney can seem like a daunting task.
The key is to learn as much as you can about where your family sits financially before filing for Divorce can be extremely helpful. This is true for a couple of reasons. For one, any information you can provide your attorney with at the outset of your case can assist them with building arguments for mediation and, if necessary, a contested hearing.
Also, your spouse may begin to hide previously available information from you if they believe that a divorce is upcoming. You can still request information using Discovery if necessary, but it can take longer and will cost you more money in attorney’s fees to go about it this way.
Community vs. Separate property in Texas
Although you’ve probably heard the terms used before, you may not have a clear understanding of what community property is and how it differs from separate property. The law presumes that all property you and your spouse is community property. Clear and convincing evidence is needed by either you or your spouse to contradict this presumption and prove that property belongs in either your or your spouse’s separate property ledger.
Suppose we define community property as all other than separate property acquired by either spouse during the marriage. In that case, it makes sense to list what makes a property or debt particular property. Individual property is made up of:
- Inheritances or gifts
- Personal Injury awards
- anything owned before your marriage by either spouse
An increase in the value of your separate property counts as individual property if you are curious. However, income and rent earned from a particular property count as community property since it is technically acquired during the marriage.
What is the general manner in which your community estate will be viewed in the context of your Divorce?
The same evaluation will be done whether you and your lawyer are preparing for mediation or a court preparing to divide up your debts and assets after a trial. First and foremost, it must be decided whether a piece of property is part of your community estate or either one of your separate estates. From there, a dollar value will need to be assigned to the property before it is divided up to either you or your spouse.
This exercise applies equally to debts and property (though the property is more fun to talk about).
Part Two of our Discussion on the Community Estate is coming tomorrow.
The Law Office of Bryan Fagan, PLLC, invites you to return to our website tomorrow for part two of our discussion on your community estate and how it could be divided in your Divorce. If you have any questions about the information presented in this blog post, please do not hesitate to contact our office today. A free-of-charge consultation is available six days a week where a licensed family law attorney can answer your questions.
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Other Articles you may be interested in:
- What Every Entrepreneur Needs to Know About Community Property Division
- What is community property in Texas?
- Community property issues in Texas divorces: Wasting of assets by spouses
- How does a judge divide up community property in a Texas divorce?
- What happens if you and your spouse mix community and separate property?
- Characterizing your assets as community or separate property through tracing
- Community Property Essentials for Texas divorces
- Community Property and Credit in Texas Divorces
- Community Property Law in Texas
- Family Law Cases in Texas: Marital Property and the community presumption
- Reimbursement of the Community Estate: Continuing the Discussion on Divorce
- Texas Divorce Overview: Dividing Community Property and Debts
- Dividing community property in mediation: What can be done to settle your divorce in Texas
- Community Property in Texas: What you need to know before you get divorced