Fair Share: Understanding Divorce Assets in Texas

Beginning a divorce in Texas means identifying the areas of a case most important. Having to divide marital property is a necessity for most of you reading this blog post. Even those of you who have been married for a short amount of time likely have marital assets and debt to divide. The process involved with performing this step is critical to achieving a successful divorce. Having goals associated with this asset division often determines the level of success you achieve. 

In today’s blog post from the Law Office of Bryan Fagan, we are discussing how divorce assets are divided in Texas. Like many things in life, this is an issue that, at first, seems relatively simple. However, when you get right down to it the process of dividing up property is complex. Depending upon how much property you and your spouse own it is challenging even the most prepared people. 

To accomplish your goals in a divorce you need to first have goals. This may sound overly simple, but I promise you it is not. Many people head into a divorce with no semblance of goals and minimal understanding of the divorce process. That is where the Law Office of Bryan Fagan comes in. If you have questions about the material, you read in today’s blog post please call us. We offer free-of-charge consultations six days a week in person, over the phone and via video. 

What does it mean when we talk about divorce assets?

Divorce assets means property. Property would be things that you own due to you having purchased them, inherited them, or been gifted them. In a divorce, your property and your debts encompass your marital estate. These are the property and debts which are divided in a divorce. However, Texas handles property division differently than most states. Before we talk about how property can be divided fairly let’s spend some time discussing how property is classified in a Texas divorce.

Community property in a Texas divorce

The more specific name for marital property in Texas is community property. Community property and debts are subject to division in a Texas divorce. Therefore, figuring out what property is community property and what property is separate property is important. The Texas Family Code contains all the relevant laws and statutes regarding community property and how it can be classified and divided in a Texas divorce. However, we are going to discuss the essential pieces of information about community property and debt in this blog post today.

It is presumed that all property you own at the time of your divorce is community property. This means that it is presumed that all property owned at your divorce is subject to division. However, it is likely that not all your property is community property. To that point, you and your spouse have separate property estates, as well. 

You can think about property owned in your marriage like a piece of paper with two lines drawn down the middle of the page splitting the page into three columns. The first column is community property, the second is your separate property and the third is your spouse’s separate property. Importantly, separate property cannot be divided in a divorce. 

The length of your marriage determines the amount of community property that you and your spouse own. Long marriages tend to mean that the spouses own a great deal of community property. Short marriages mean that spouses typically own relatively little community property. Your situation means that you need to arrive at specific goals. How do you do this? Especially when you do not have much knowledge on the subject.

Working with an attorney with the Law Office of Bryan Fagan helps when dividing property

The attorneys at the Law Office of Bryan Fagan work in the family courts of Texas every day. We see what people go through in divorce and want our clients to have the best opportunity to achieve success. As we go through today’s blog post we want you to focus on subjects related to Texas family law and property division. Have questions? Contact our office for a free of charge consultation. 

Questions about material like this are normal to have. We do not take for granted the opportunity to serve clients just like you. We have a different perspective on client representation than most attorneys. For one, you are not just a number to us. Rather, we focus on you, and your family and help you arrive at goals that make sense for you. We don’t simply copy and paste the strategy for one client onto another. Our clients matter to us. We take your case seriously and want you to have confidence moving forward. 

What are you waiting for? Contact us today. We are here for you. A free-of-charge consultation involves you being able to sit down with one of our experienced family law attorneys for thirty minutes. You set the pace in a hearing. Want to ask a lot of questions? Ask away. Want to ask one big question and have our attorney lay out a potential strategy? We can do that too. We are here to get to know you better. 

You own a lot- how do you wrap your brain around everything that you own?

Suppose that you and your spouse are twenty-five years into your marriage. You have had your ups and downs but now it looks like you are headed towards a divorce. Your wife has filed and hired a lawyer. Divorce paperwork showed up at your door yesterday. There is no avoiding the reality that the two of you are on the road towards the end of your marriage. It’s difficult to think about but it is not worth avoiding now. 

What do you do first? Your kids are grown and out of the house. So, there won’t be any issues related to minor children in your divorce. However, the two of you have built up a substantial amount of property together. Most of that financial success is due to your income earned over the years as a successful businessman. Owning multiple successful businesses allows your family to live a terrific lifestyle. 

However, that success in business and the property that you own now puts your family at the forefront of a discussion related to property division. You need to figure out how that property is going to be divided in your divorce. One thing you can tell from your wife’s divorce petition is that she already has an idea about how your marital property should be divided. You have not thought much about the subject, however. Where to start?

Start by figuring out what property you own

Your wife texted you to say that she is going to stay with her sister for the time being while both of you settle into the divorce. This makes sense to you but also offers you an opportunity to organize yourself. It also lets you develop a strategy to be used for dividing your property up. What the attorneys with the Law Office of Bryan Fagan recommend to clients is performing a basic inventory of the property you own. 

An inventory is no different than what employees at a restaurant or a retail store perform on occasion. Getting an idea of what you own means simply taking a detailed look. This starts in the home. Go room to room, drawer to drawer, and closet to closet. Take photos of what you see. We recommend this because you do not know what the future holds. One minute you are in the house. The following week after a temporary order hearing or mediation- who knows? The point is- take advantage of the time you have in the house while you have it. 

When you have gone through your house completely then start to think about things that are not in your house. Vehicles, bank accounts, retirement accounts, investments, life insurance, etc. Some of these assets are intangible and may not be at the front of mind. However, go through your computer and find all statements to determine the value of these accounts too. 

Debt matters too

Debt is sort of the stepchild of the divorce property division process. Yes, debt matters. Debt needs to be divided in a divorce. However, nobody likes to think about debt. However, the reality is that the attorneys with the Law Office of Bryan Fagan know that most of us have debt these days. It’s not just home debt, either. Credit cards, home equity lines of credit, student loans. We are a debt-friendly country to be sure. 

Start to look through your loan statements to determine what you owe. This will help us in the next step of the process where you determine how you should consider these debts in the division process. Depending upon a few factors you may end up with a lot, or relatively little, debt in the divorce. 

What does it mean to divide property fairly?

Fair share. Our attorneys hear a lot about people wanting a fair share of their property in a divorce. This sounds great. We all like to think of ourselves as fair after all. However, fairness is something that comes to the county every so often. Fairness isn’t something many people think of in a divorce context. Rather, most people get what they deserve or is equitable in a divorce. Equity usually means fairness rather than evenness (if that’s even a word).

Fairness means taking into consideration a lot of different factors when dividing up property. The totality of your life is examined when considering what is fair and equitable. We grew up thinking that “fair” meant “even.” Your mom wasn’t fair if she gave your sister the bigger piece of cake. Your teacher wasn’t fair if he handed out a piece of candy to every student in class but you. 

The trouble is that fairness does not mean the same thing to adults. We look at fairness more along the lines of what is equitable. Fair means considering all things and then awarding you based on merit. How meritorious is it for you to receive the lion’s share of your community estate? That is what we are trying to figure out today in this blog post. Let’s get into what fairness looks like in a property division setting. 

A hypothetical example to illustrate what is fair and what is not

In our situation from above, there are a lot of variables in play. You and your spouse are older than many people who go through a divorce. Not old enough to be in your golden years yet still old enough to have a couple of pennies to rub together. To illustrate how equity works when it comes to dividing community property let’s walk through what it means to get divorced. We see exactly what it means to consider all possible variables and factors in dividing property.

First, the gorilla in the room is the difference between your income and that of your spouse. She has not worked outside the home for the duration of your marriage. This is important. You own multiple businesses. Your work experience, connections, and ability to build an income from scratch matter in this conversation. Your spouse will have to finish a degree or find a job that does not require a degree to find work. 

Next, consider the amount of separate property that you own. You came into your marriage with a sizeable separate estate. On top of that, you are ten years older than your wife. You owned stock, retirement savings, and a vintage car from your single days. All these items cannot be divided in the divorce. As a result, you have a sizeable amount of property that cannot be divided in this divorce. 

Your spouse has very little in the way of separate property. A savings account that she had from when she worked right after high school. A savings bond that matured long ago but she has not cashed out or ever done anything with. As you can see, your spouse is at another disadvantage.

The health of both spouses matters when considering fairness in dividing property

You are a marathon runner. Health is a top priority for you and always has been. Despite your busy schedule as a small business owner, you always find the time to get in your daily exercise. Your body is a temple you are fond of telling your friends. Well, your blood tests all show that you have done a great deal to keep yourself healthy. 

That’s a good thing since your wife has a couple of chronic diseases. Fortunately, these are nothing too severe but your spouse has to keep an eye on her health more than you do. She tires easily and becomes fatigued with minimal exertion. Lifting, carrying, and walking long distances are troublesome for her. She can work but maybe not a full-time, forty-hour-a-week schedule. This, too, becomes a factor for a judge to consider in dividing up your community property.

Where does this leave you when it comes to dividing up your marital estate?

Income, income potential, health, and separate property estate sizes are only a few of the factors a court can consider when dividing up your community estate. On top of that, imagine a situation where you and your spouse negotiate a settlement to end your divorce rather than proceed to a courtroom. This is how most divorces in Texas are resolved. Not in a courtroom but at the negotiation table. 

However, you and your spouse both know that if you cannot settle your case it will end up in front of a judge. Therefore, learning these factors when it comes to dividing marital property matters. Negotiating without these factors in mind does nobody any good. There are times when you will certainly need to think back to all the different issues in your marriage to determine what a “fair share” of the community property even looks like. 

Remember that marital debt is divisible in a divorce, as well. This is not something that is only limited to the division of property. Rather, if either of you incurred more debt in the marriage that person may wind up with more debt than property in some cases. For that reason, you must consider working with an experienced family law attorney in your divorce. 

Thank you for joining us here on the blog for the Law Office of Bryan Fagan. Our licensed family law attorneys offer free of charge consultations six days a week where we can answer your questions. We also post unique content here on our blog every day of the week.

Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan    

If you have any questions about the material contained in today’s blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free-of-charge consultations six days a week in person, over the phone, and via video. Interested in learning more about how your family is impacted by the material in this blog post? Contact us today.

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At the Law Office of Bryan Fagan, PLLC, the firm wants to get to know your case before they commit to work with you. They offer all potential clients a no-obligation, free consultation where you can discuss your case under the client-attorney privilege. This means that everything you say will be kept private and the firm will respectfully advise you at no charge. You can learn more about Texas divorce law and get a good idea of how you want to proceed with your case.

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