When dividing marital property in a divorce, you need to know what community property laws are and what they can mean to you and your spouse. Texas is a minority of states that adheres to community property principles regarding the distribution of property in a divorce. Most states Follow directions of property division in divorce according to the common law. Common law principles are derived from English origins, and Community property laws are derived from Spanish or French roots. While the geographic location of where each law originated is not incredibly important, it does make sense that many western and southern states follow community property laws, given our proximity to places that were once part of the Spanish empire.
Community property laws are intended to be more equitable when it comes to dividing up marital property. The reason for this is that Community property principles do not require a judge to look to whose income was utilized to purchase a property or to see whose name appears on a receipt or title to any particular property. For example, suppose you and your spouse purchased a home during your marriage. In that case, that property is very likely to be considered community-owned, no matter if you have never contributed a single dollar to your bank account during the marriage.
In this way, spouses who do not work and stay at home to help raise children or attend to the house have an advantage living in Texas then and living in a state that does not adhere to community property principles. What matters in Texas is that you were married, and the property was acquired during your marriage. The same, it can be said, applies to the mortgage that was taken out to pay for the house. Even if your name does not appear on the mortgage, the debt is still technically just as much yours as it is your spouse. Title companies in Texas recognize this reality and often will not allow the closing of your house to occur without both your and Your spouse’s signatures on the closing documents.
What about a separate property?
Since we have discussed our introduction to Community property, it makes sense to spend a little time going over how property may be classified as separate property. The first thing to know about property and debts in a divorce is that they will fall into one of three categories: the community estate, your separate estate, or the separate state of your spouse. Depending on several factors, such as when the property or debt was acquired and who utilized the property or debt more so, it is possible that you could be responsible for debts are property that you have had little to do with in terms of origin or utilization.
Generally speaking, however, separate property is any property owned or acquired before your marriage by either you or your spouse. This means that if you came into the marriage with relatively little property, your separate property estate would be relatively small. On the other hand, if you entered into your wedding with a substantial amount of property, then your different estate may be significant if that property was maintained during your marriage.
The most significant factor regarding separate property is that a family court judge cannot be divided in your divorce. No matter what other circumstances are in play in your case of family court judge cannot split your separate property between you and your spouse. That property will remain yours after the divorce no matter what else happens. However, that isn't to say that your separate property will not have a bearing on your case in other regards.
For example, if you have a substantial amount of separate property in a divorce, then it may be less likely that you can request and be granted spousal support after the divorce concludes. The reason for this is that, at least in theory, The property you have can be sold to make sure that you can finance your lifestyle after your divorce. This is especially important if you are a spouse who has been a stay-at-home parent or spouse over the past few years. Having contributed less to the community property that you have ownership over does not factor into the equation, either.
Negotiating over community property in a divorce
there are two components to any divorce case: child custody and marital property division. Dividing up the marital property in your divorce will mean adhering to principles of community property. As noted earlier, it will matter less about whose income was used to purchase property in the divorce case and more about when the property was purchased. Many spouses enter into a divorce assuming they will get a better stake in the property division because they contributed more money to the marriage. In many other states, this likely would be the case. However, it is not necessarily true in Texas.
This does not mean that you need to consider future financial responsibilities when negotiating over community property. Let's take the example of your family home when considering how property in a divorce may be divided. Assume with me that you are a stay-at-home parent and have been since the beginning of your marriage. This likely means that you have not gone to college and have far less work experience than your spouse does. While this division of work may have served you well during your marriage if you were to file for divorce from your spouse, this may not work for you once your case is complete.
This is that you will need to provide for yourself and possibly your children after a divorce. Without the assistance of your spouse’s income, this responsibility falls primarily on your shoulders. As a result, you will need to negotiate for community property bearing in mind these financial realities. Starting with your family home, it may be your instinct to want to stay in the house, especially if you will be the parent responsible for taking care of the children. Having some consistency and stability regarding the location where you raise your kids may be very important. However, it would help if you looked at your case from the perspective of whether or not you can take on this financial burden.
Just because you may negotiate for your family home, the divorce does not mean it is in your best interest or your children's. Remember that you will be responsible for taking on the mortgage, maintenance costs, utility bills, and other responsibilities associated with the house after your divorce. If you have not worked in some time, need time to transition back into the workforce, and otherwise have financial goals that are more immediate than simply staying in the house. You may want to be careful in biting off more than you can chew as far as the Community property division with the house is concerned.
If we continue to think about Community property based on the hypothetical scenario laid out above, if you find yourself in this sort of position where you need to be able to solidify yourself from a financial perspective, then you should think about taking on a property that can be used to help you gain a solid financial footing rather than property that may provide you with additional bills. For example, if you are concerned about your ability to retire, you should request a disproportionate share in your spouse’s retirement or your bank accounts. This way, you can have more liquid cash available to you for your use after a divorce rather than a house with liabilities that you will need to account for.
On the other hand, let's suppose that you are the spouse who has more significant financial money right now. You're having worked more during the marriage, gained more job experience, and had a higher education level. As a result, you may be in a better position to ask for assets that may require more of an upfront investment but may be better off for you in the long term. Using our above example regarding the family house, this may be a portion of your community estate you would like to negotiate. While your spouse may not afford mortgage payments, those payments may be more reasonable for you, especially since you have been making them a loan on your income even during your marriage.
Final thoughts on Community property laws in Texas
the circumstances regarding community property laws in Texas can be pretty intricate and can impact your divorce in multiple ways. However, that does not mean that you need to become an expert in these areas of the law, but you should have a working knowledge and understanding of how community property can impact your divorce. This is since your attorney will be providing you with guidance when it comes to decision-making, and you do not want to make decisions without some knowledge about the process.
Dividing up the community property in your marriage can be a painstaking process, but it does not have to be. The reality of Community property laws in Texas is that the rules are guideposts for you in negotiation but will be adhered to strictly in a divorce trial. If you and your spouse cannot settle your case before a problem, then a judge will be more likely to adhere to these principles than you strictly, and your spouse will be in negotiations with you. This should impress just how critical it is to be on the same page with your spouse in talks.
Knowing what property is at stake in your divorce is the first step in that equation. If your spouse is prone to hiding assets or debts in the divorce, then you and your attorney will want to make sure that you submit discovery requests on your spouse and their attorney to make sure that they disclose any financial matters to you in the divorce. Discovery is an essential step in this process towards helping you and your spouse negotiate with the same facts in mind. A party will often submit discovery requests upon their spouse at the very beginning of the case, usually attached to their original petition for divorce or Answer.
Be prepared when it comes to making offers encounter offers over community property in the divorce. The more facts in the more specific you can be when it comes to negotiation, the more likely you will make progress. If you are unprepared to negotiate, your chances of successfully settling your case before trial decrease considerably. Remember that you want to keep your fate in your own hands rather than leave it up to a judge. The best way to do this is to negotiate in good faith with your spouse and be willing to fully disclose all assets and debts at the beginning of your case.
Questions about the material presented in today's blog post? Contact the Law Office of Bryan Fagan
if you have any questions about the material presented in today's blog post. I recommend that you 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. These consultations are an excellent way for you to learn more about the world of Texas family law and the services that our law office can provide to you and your family as clients.