If you read anything about divorce in Texas, then you have probably come across at least one article online that has told you that Texas is a community property state. What does this mean, and how exactly does it affect- your case? Today’s blog post from the Law Office of Bryan Fagan, PLLC, will discuss this topic in detail so that you know for sure what it means to your divorce and your life moving forward.
Presuming property to be community owned during a marriage
All property that you and your spouse own when it comes time for a divorce is supposed to be owned by both of you. The same rule applies to debts that either of you incurred during your marriage. In your divorce, the court will divide both your property and your obligations before finalizing your case.
To prove to a court that a particular piece of property is not community property but separate property owned by either you or your spouse individually, you or your spouse will need to present clear and convincing evidence to the judge.
When a piece of property was first acquired by either you or your spouse, you would need to show that at that moment in time, the property was, in fact, the separate property of one of you. This is typically done with title documents, receipts, or other documentary proof of the transaction that brought the property into your marriage. Testimony from a witness alone about why the property is separate and not the community will not suffice in most cases.
Defining Separate Property
Now that we’ve begun to discuss what separate property is, we need to define the term to know precisely what we’re talking about. Property acquired before your marriage or property that is developed during your marriage by either gift or inheritance is considered separate property in Texas.
Many spouses in Texas will sign off on a premarital agreement that places the specific property in the category of either separate or community property. In this way, you and your spouse can take property that may ordinarily be viewed as community property and convert it into the individual property.
Asserting a reimbursement claim against your spouse
During your marriage, you and your spouse may have contributed community income to pay a debt on either of your separate property. That same community income could have been used to improve a piece of your particular property.
For instance, say you owned a home before your marriage, and that home needed a new roof. You could have used your income to put a new roof on the house. Because that income is community property, your spouse, upon divorce, would potentially be able to assert a reimbursement claim against you for utilizing community funds to improve a separate property asset that you own.
Premarital and Marital Property Agreements
We had briefly discussed premarital agreements earlier in this blog post, and now we will open up a more wide-ranging overview of these documents. You and your spouse, either before your marriage or during your wedding, can enter into a signed, written agreement regarding how you and they will classify certain pieces of property. This is done to decide out of either of your hands or a judge’s hands in the future should you two decide to get a divorce.
Many times spouses enter into premarital agreements to keep certain separate pieces of property that have been owned before the marriage or to keep certain debts of theirs separate from the community estate.
Marital property agreements are signed off on during your marriage. Many times, people will enter into marital property agreements to separate certain pieces of community property between the spouses. In the event of a divorce, the married or premarital agreement will be attached as an exhibit to your Final Decree of Divorce or incorporated into the Decree by quoting the specific language utilized in the contract.
Dividing up community property in a divorce
If you had not read anything about divorce in Texas before going through this blog post, you might believe that it is a foregone conclusion that a judge will decide your divorce case in a courtroom. This is not the case, however.
Typically divorces are decided by the parties themselves in either a formalized settlement process like mediation or informal settlement discussions between spouses and their attorneys; if you and your spouse cannot agree on your divorce terms, then a court will intercede.
A court will divide community property in your divorce in a just and proper manner. The court will determine what is and right by evaluating the circumstances of your case, each of your rights and spouses, and the events at play regarding your children (if you have any).
The popular notion regarding community property is that debts and property will be split evenly down the middle and divided between you and your spouse. Often this does not occur. Your separate estates and the fault either of you played in causing the divorce will be considered. This often results in what is known as a “disproportionate” share of the community estate going to either you or your spouse.
On top of these factors, taking a knife a la King Solomon and dividing community property in an even fashion is not always possible. For instance, suppose that you and your spouse own a home and one of your files for divorce. What often happens (and what is easiest) if you go to court is that the judge in your case will order the house to be sold, and the proceeds would be divided between the both of you. It seems straightforward, right?
Dividing the marital home into a divorce
Well, what if you all have three children who are all school-aged and live in that home. This circumstance does not lend itself as easily to simply ordering the house to be sold. Your children are already having their lives thrown into a tizzy by your divorce. Being forced to move on top of that would only exacerbate the instability in their lives. What happens in this sort of situation?
Whichever spouse, you or your spouse, end up with the right to determine the children’s primary residence will also likely be able to remain in the home after the divorce.
Whichever spouse loses out on this right will likely be awarded other assets to make up for their losing out on their share of the community property value in the house. Or, whatever equity is in the home at the time of the divorce can be divided, and your spouse could be awarded that portion.
This money often comes from the proceeds of a refinance of the mortgage into your spouse’s name only if you are not given the right to remain in the home after the divorce with your children.
Again, if you and your spouse can come to your settlement terms, you can be highly creative. It just takes an agreement that you both deem to be appropriate and fair. Often a judge is not in a position to honestly know what is best for you and your family, but they will do their best if an agreement cannot be reached before a trial.
Spousal Maintenance and Children’s Issues in divorce- tomorrow’s blog topic
Please join us again tomorrow as we discuss the popular topic of spousal maintenance and begin to get into issues that relate to your kids in a divorce.
In the meantime, please get in touch with the Law Officeof Bryan Fagan, PLLC, with questions you may have on this or any subject in the field of family law. We offer free of charge consultations and are available six days a week to meet with you.
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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
- Community Property in Texas: What you need to know before you get divorced
- 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
- The community estate in a Texas Divorce: Where is all of our stuff going?