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Texas Divorce Overview: Dividing Community Property and Debts

Community property is defined in the Texas Family Code as any property that is acquired by either or both spouses during marriage by any means other than gift or inheritance.

This is obviously a pretty broad definition and is intended to encompass a wide variety of items. Simply put, the legal presumption in Texas is that all property owned by spouses during a marriage is community property. The burden is on you or your spouse to present evidence in order to prove that a particular piece of property should be considered your separate property.

With that being said, all property that is in existence at the time of your divorce is considered to be community property. It is important, therefore, for you to bring to your attorney’s attention early on in your divorce case the existence of any property that you believe to be yours separately. Many items will be ones that your spouse will likely concede is yours separate and apart from their own. However, if the piece of property is valuable then you may need to prepare yourself for some resistance to your assertion that the property is your separate property.

If you owned a mutual fund in the years prior to your divorce and continued to own that mutual fund throughout the course of your marriage then it is considered to be your separate property.

However, any interest that is gained on that principal amount is community property. If you have substantial investments and seek to keep all growth on the investment your separate property it may be in your best interest to look into a premarital agreement. You can negotiate with your spouse as to how specific pieces of property will be handled during your divorce.

A just and right division of community property

Should your case not settle beforehand, a judge has the authority to divide your community property by any means that he or she considers to be just and right. It is incorrect to assert that your property will be split evenly down the middle, 50/50. How then will a court make the final determination on how property is to be divided in your divorce?

As we discussed in yesterday’s blog post fault in the breakup in the marriage will be considered. If your spouse was unfaithful to you, utilized community income to pay for gifts for their paramour and led to your having to file for divorce it is likely that you would be awarded a greater than fifty percent share of your community estate (otherwise known as a disproportionate share).

Your age and income potential after the divorce will be considered as well. If you are a young person with multiple degrees and on the fast track to make partner at your law firm it is unlikely that a judge would take pity on you and award you a greater than fifty percent share of your community estate based on those facts alone.

Mediation trumps Litigation- most of the time

Your case may prove to be an exception to this rule, but generally, it is better for you and your spouse to be able to settle your case than to proceed to a trial. The fact remains that no matter how experienced, fair and empathetic a judge is he or she will never know more about you, your family, and your circumstances better than you do. The fact remains that you and your spouse are better equipped to arrive at a flexible and fair settlement than a judge would.

Mediation is an opportunity where both sides agree to have an independent, third-party attorney intervene to assist you all in attempting to settle your case. A mediator will typically host you and your spouse and act as a problem solver and communicator of settlement ideas from room to room at his or her office. Your mediator is likely to be a family law attorney so he or will be able to advise you and your spouse about the chances of a certain event occurring in a trial. If you were holding out hope that the judge would rule in your favor on a particular subject and your mediator disagrees with you that may be reason enough for you to attempt to work out a settlement with your spouse rather than to proceed to an uncertain outcome in a trial.

How debts are handled in a divorce

Dividing up debt is not discussed as frequently as dividing up the property but can be just as important. If you have a debt that was incurred prior to marriage then that debt will stick with you after your divorce. If you incur a debt during the marriage then the court will need to figure out how to divide that debt between you and your spouse. This should sound familiar as it is essentially the same mechanism courts have in place when it comes to dividing up community property.

Does the court have a rule that it typically goes by when assigning the debt to either you or your spouse? The answer is yes. If you incur a debt during the course of your separation then the court will award that debt to you in the divorce. Keep in mind that a judge has the authority to divide debts between you and your spouse in a Divorce Decree but has no authority to place the legal responsibility of one debt on either you or your spouse. Let’s discuss this a little further.

If your spouse is named as the party to your divorce who has the responsibility to pay the debt on a credit card after the divorce that will be reflected in your divorce decree. This means that if he or she does not do so you have the ability to take him or her back to court to have the judge enforce the terms of the decree by placing him or her in contempt of court.

Meanwhile, if the credit card agreement bears your name and signature it is your credit that is getting ruined while your spouse fails to pay according to the terms of the divorce decree. You cannot mail in a copy of your decree to the credit card company. The only agreement they care about is the cardholder’s agreement that you signed. Keep this in mind as you begin to negotiate on dividing up debts.

More on debts to be posted tomorrow

Debt may not be super-exciting to discuss but it is important. Tomorrow’s blog post from the Law Office of Bryan Fagan, PLLC will center around this subject.

If you have questions about anything you’ve read today please contact the Law Office of Bryan Fagan, PLLC. We offer free of charge consultations six days a week in which your questions can be answered.

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Adobe Stock 62844981[2]If you want to know more about what you can do, CLICK the button below to get your FREE E-book: 16 Steps to Help You Plan & Prepare for Your Texas Divorce

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Other Articles you may be interested in:

  1. What Every Entrepreneur Needs to Know About Community Property Division
  2. What is community property in Texas?
  3. Community property issues in Texas divorces: Wasting of assets by spouses
  4. How does a judge divide up community property in a Texas divorce?
  5. What happens if you and your spouse mix community and separate property?
  6. Characterizing your assets as community or separate property through tracing
  7. Community Property Essentials for Texas divorces
  8. Community Property and Credit in Texas Divorces
  9. Community Property Law in Texas
  10. Family Law Cases in Texas: Marital Property and the community presumption
  11. Reimbursement of the Community Estate: Continuing the Discussion on Divorce
  12. Community Property in Texas: What you need to know before you get divorced
  13. Dividing community property in mediation: What can be done to settle your divorce in Texas
  14. The community estate in a Texas Divorce: Where is all of our stuff going?

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