Texas divorce cases involve the division of marital assets and debts. Most of us already knew that. However, the method a court uses to divide property may be less well-known. There are also a host of factors that are used to determine how that division of property will occur. Preparing for a divorce from this perspective takes time and a firm purpose. The Law Office of Bryan Fagan is here to help you on both fronts.
When it comes to dividing up property in a divorce there are some basic lessons that we need to learn. First, Texas courts adhere to principles rooted in community property. Community property holds that most if not all property acquired during the marriage is subject to division. This is a major development in your case. You and your spouse are tasked with determining whether the property you own is community property or not. One of the key parts of a Texas divorce is deciding how to divide this community property.
Finally, Texas also honors what is known as separate property. Separate property is any property owned by you or your spouse before marriage. Property acquired during the marriage by gift or inheritance is also considered separate property. What you need to take away from this discussion is that separate property is not divisible in a divorce.
Dividing the property
Now that we know the general way that property is classified in a Texas divorce we can discuss how the property is divided. Texas adheres to a principle known as equity distribution in dividing marital property. Many people incorrectly equate this to a 50/50 division of property being necessary. While your community property may be divided right down the middle this is not a guarantee.
Have you ever heard a parent tell their children that what’s fair is not always even, and what’s even is not always fair? That same principle applies to the division of community property. Fairness is based on concepts that relate to the specific circumstances of your case. There may be reasons why a disproportionate division of your community estate is equitable. As in, fairness dictates that one of you receive more property than the other. A thorough examination of your community property, separate property, and other factors is necessary.
So far in today’s blog post, we have touched on how property is classified and also on how the property is divided. This is only a small amount of information related to a complex and important subject. At the Law Office of Bryan Fagan, we help clients just like you every day manage these subjects. Interested in learning more about this topic? Contact the Law Office of Bryan Fagan for a free-of-charge consultation to learn more about us and what we have to offer you.
What factors are most important to consider when dividing marital property?
All of this begs the question: what factors are most critical when it comes to dividing community property? There are many factors that we could list here today. However, three of the most important are your contributions to the marriage, income, and your specific financial needs. Let’s walk through each of those factors to better illustrate how they may impact your particular case.
Who earned most of the income and property during your marriage? That person may have an advantage when it comes to property being assigned in the divorce. No, that does not mean that the person who earned more money gets more property. Community property methods of property division are designed to avoid that sort of outcome. However, this is a relevant factor that the court may consider in addition to others when dividing property.
What is your income and how long have you earned it? This factor examines your ability to earn a living for yourself. It is important to note that the court needs to consider how you will survive after the divorce. It is not a matter of looking backward only. Rather, the court would need to consider your life moving forward once the divorce is over. A stay-at-home mother who has not worked may receive more property in a divorce than an investment banker with years of experience.
What are your financial needs going to be after the divorce?
Speaking of looking ahead, there are several factors related to your future finances. Consider your health. Healthier people tend to have a longer life span. However, they also have a greater ability to earn an income compared to people who are not as healthy. Imagine trying to find a job after the divorce if you have a chronic illness. You may be dependent on your spouse for day-to-day survival.
Your educational background is a solid indicator of your ability to earn a livelihood for yourself. Generally speaking, the more education you have the better opportunity for you to earn more money. Of course, this is not always true across the board but it is usually better to have more education than less. A spouse who stayed at home to raise the kids while their spouse earned a medical degree should not be left out in the cold financially after a divorce.
The last factor to mention here relates to your children. Are your kids grown out of the house? Are they school-aged? Or are you caring for an adult, disabled child? Again, the answer to these questions may determine the share of community property you receive in the divorce. An inability to work full time because you are caring for a disabled child matters in a divorce. It is also a relevant point when it comes to awarding spousal maintenance.
Wasting of community assets
Picture this. You are living your normal, married life when you start to notice that you have less in your checking account than you would have thought. When you look at the individual transactions you notice items that you do not recognize. Your spouse has been staying out late and night and leaving early in the morning. Hotel rooms. Extravagant meals out. Shopping trips. All the sorts of costs that seem out of line with what a married woman should be experiencing.
It becomes clear that your spouse has been unfaithful to you. Not only that, she has been spending your community property left and right. She is in favor of a divorce but has not talked to you about the prospect of reimbursing your community estate for the money spent on their paramour. It only seems fair to you that you would get some of this money back. Is that a given in the divorce?
This type of situation is known as financial infidelity. Being unfaithful with your money is just as hard to deal with as being unfaithful romantically. It is common in a situation like this to first have the community estate reimbursed. This means your spouse would need to take property out of their separate estate to pay the community estate. From there, a division of the community estate based on all the factors we have listed would occur.
Fault grounds as a factor in dividing community property
Texas is a “no-fault” state when it comes to divorce. This means that you do not need to specify a particular reason why you are filing for divorce. Rather, you can tell a court that you need a divorce for discord or conflict in personalities. This is a general explanation as to why the divorce is necessary. No-fault divorces do not attempt to assert one factor above any other when it comes to showing why a divorce is necessary.
However, even in a no-fault divorce state like Texas, it is possible to assert a fault ground for divorce. Fault grounds for divorce are important for multiple reasons. One, you may be in a situation where your spouse truly did something significant to cause the end of your marriage. In that situation, asserting fault grounds acts as a way for you to hold your spouse accountable for their actions. This is not merely rubbing your spouse’s nose in their prior bad behavior. Rather, there are practical effects to asserting fault grounds for divorce.
The most practical impact on your divorce from a property perspective for asserting fault grounds is a disproportionate award of property. Disproportionate means more than half or not proportional. There is a tendency in divorce to award property in a somewhat “even” fashion. Again, whether this means 50/50 is up to the facts in your case. Fault grounds, when successfully proven, allow a spouse to potentially receive more than 50% of community property.
An example of fault grounds at work in a divorce
Suppose that your spouse did waste a considerable amount of community property in entertaining their significant other. Contrary to what many people believe it is not wise to start dating even after a divorce has been filed. Certainly, then, dating before the divorce is filed would not be a good decision. By dating and spending money on that person your spouse has utilized community funds to purchase items that went towards the destruction of your marriage. Remember- income earned during the marriage does count as community property.
Coming across this information is shocking. However, there are steps you need to take to prove fault grounds. First, collect any evidence that you can as far as receipts or proof of bank transactions. Reservations for two at a hotel room or jewelry receipts are the type of items I have in mind. Documents, photographs, and witness testimony are better than assumptions. The judge will be unlikely to believe your allegations if all you have as far as evidence is your word against that of your spouse.
When you allege and prove a fault ground for divorce the case opens up for you. You would still need to prove community property composition. At that point, a judge can review how much community property was wasted on the significant other of your spouse. Reimbursement of the estate is necessary. From there, the judge is likely to assess a penalty for having spent money in this way. Keeping all of this organized and making persuasive arguments is key. An attorney who specializes in family law is a key part of this process for you.
Unequal property division is in the eye of the beholder
The different types of property subject to division in your divorce is another key part of understanding this subject. Not all property is created equal. For instance, suppose you are an older person going through a divorce. In a situation like this retirement savings may be the most important financial aspect of your case. As a result, you may ask for more retirement savings than physical property. Why? With retirement right around the corner savings are at the top of your priority list.
Compare this to how you may approach the divorce as a younger person. In that case, having a high income and many years to earn an income may make retirement savings less of a priority. As a result, your savings and checking account balances could be your priority. The retirement savings in a 401K could be something that you are willing to give up on to an extent.
At the end of the day, receiving more of one type of property than another is not a bad thing. Property divisions need to be considered based on the specific circumstances of your life. Just because you wind up receiving more retirement savings than anything else does not mean that you received an “unequal” share of community property. It just means that you are prioritizing a different set of goals than another person may in their particular divorce setting.
Preparing your property division
There are steps you should take before engaging in a divorce’s property division discussions. First, complete a basic inventory of your property. This means walking around your home and taking photos of what you see. That way if anything happens to your property during your divorce you will not be without proof that an item existed. Once you begin to inventory the property you can separate the items into three columns. One column is for community property and the other two are for the separate estates.
Appraising the property comes next. Some items are fairly easy to appraise. Houses are a major financial asset that many of us own. However, there are many similar assets in your area to compare your house to. This makes the appraisal process easier. Other assets such as collectibles, classic cars, or mineral rights are more difficult to appraise. If you own property like this then consider working with an experienced appraiser in that field before determining a value.
These steps help you to determine the basic value of your community estate. For example, if your community estate is worth $500,000 you know about how much property is half of that estate’s value. From there you can take into consideration fault grounds and other factors which may necessitate a disproportionate division of your community property. The better prepared you are for property division the shorter and less expensive your case tends to be.
Don’t forget about debts
Finally, the Law Office of Bryan Fagan needs to spend some time with you today discussing debts. Many of us don’t think about debt as being a major part of our financial lives. However, debt has a role in the finances of your divorce just as much as property does. Debt accumulated during the marriage is likely to be community property debt. That means that even if the loan bears the name of your spouse you may become at least partially responsible for its payment.
Student loans are unlikely to be assigned in a divorce to the spouse who did not utilize the loan. However, loans like home equity lines of credit, mortgages, credit cards, and car loans may be divided between you and your spouse. It is also helpful to run a credit check on yourself to make sure that you know of all credit accounts in your name. It would not be surprising to see your spouse having taken out a loan or opened a credit card in your name without your knowledge.
Thank you for choosing to spend part of your day with us here at the Law Office of Bryan Fagan. Our licensed family law attorneys serve clients in and out of the courtrooms of Texas every day. We aim to serve our clients with the utmost respect. Your goals become our goals. We post unique and informative blogs each day of the week.
Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan
The attorneys with the Law Office of Bryan Fagan offer free of charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas family law. Before signing a document or negotiating on a subject you do not know well, contact our office. We look forward to the opportunity of serving you during an important part of your life. The Law Office of Bryan Fagan is on your side.
Evan Hochschild was raised in Houston, TX and graduated from Cypress Creek High School. He went on to graduate from Southwestern University in Georgetown, TX with an undergraduate degree in Political Science. While in college, Evan was a four-year letterman on the Cross Country team.
Following in the footsteps of his grandfather and uncle before him, Evan attended law school after he completed in his undergraduate studies. He graduated from St. Mary’s University School of Law and has practiced in a variety of areas in the law- including family law.
Mr. Hochschild is guided by principles which place the interests of clients first. Additionally, Evan seeks to provide information and support for his clients with the heart of a teacher.
Evan and his wife have four small children together. He enjoys afternoons out and about with his family, teaching Sunday school at his church and exercising. A veteran attorney of fourteen years, Mr. Hochschild excels in communicating complex ideas in family law simply and directly.
