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Divorce & Real Estate

Of the most important areas of a divorce case, matters regarding real estate and property are typically foremost among them for families like yours. If you own a home, rental property, vacation property, or any other type of real estate then understanding how this subject matter fits into your divorce is crucial. The reality of the situation is that many people, however, overlook the importance of real estate in the context of their divorce because they minimize its role in their life.

One of the things that I observe in many divorce cases is that we tend to take our homes for granted. I don't know if it's that homeownership has become normalized or that being able to live in a house that you own is not something out of the ordinary but on the whole, people going through divorce oftentimes overlooked the role that their family house will play in the case. I would caution you to not take this mindset to heart. Rather, you need to understand that your family home is not only extremely important to your family but also a potential divorce.

I think we can begin today's blog posts by discussing why it is that a family home is so important to not only the makeup of your household but also to property division within a divorce. While you may be accustomed to coming home and living in that house and taking advantage of all that it offers each day, the truth is that your family home is also a key part of determining how your community estate will be divided in a divorce. For many families, it is the central component to your financial life whether you acknowledge that or not. With all of that said, I think we need to walk through how property is divided in Texas and then focus on the role of the family home in that equation. 

Community property laws in Texas

Community property generally refers to how marital property is divided in Texas divorces. Then your divorce you will find that there are three categories of a property speaking generally. The first is any property that belongs in your separate estate. This would mainly be a property that you acquired before your marriage or during your marriage by inheritance or gift. the second category of property will be any property that falls into your spouse's separate estate. Again, this will be any property that your spouse acquired before your marriage or during your marriage as a result of an inheritance or gift. 

Separate property cannot be divided in a divorce by the order of a judge. Now, if there is a particular piece of separate property that you would like to have your spouse have after the marriage then this is something that you can negotiate on. Community property laws only figure into the case if you go to court. Otherwise, these Community property laws are just a backdrop by which you and your spouse can negotiate with one another on property division as a whole. Bear in mind though that if you do go to court a family court judge cannot divide separate property between the spouses once the property is classified as being separately owned by either you or your spouse.

The other way that property can be designated in a Texas divorce is by classifying it as Community property. Community property is presumed to be any property that you and your spouse own at the time of your divorce. This presumption can be rebutted by sufficient evidence showing that the particular piece of property is either yours or your spouse's separately. However, bear in mind that the presumption in Texas is that all property that you own must be identified in your divorce. Depending upon your position within the divorce this assumption could help or harm you.

The simplest way to classify property at the beginning of your divorce is to complete a form called an inventory and appraisement. The inventory will put you in a position where you are going to write down every piece of property that you own as well as the value that you believe the item is worth. Once you go through all of your property and perform the same exercise you can provide a copy to your opposing spouse and then turn the inventory and appraisement into the court.

Being able to have an accurate idea of what property you own at the beginning of your divorce is crucial to starting your case off on the right foot. I recommend that you go from room to room in your house to perform a physical inventory before writing anything down. You can take pictures of bedrooms, offices, living spaces, closets, desk drawers, and dresser drawers. I recommend people that go through this step to prevent certain items from “disappearing” during a case.

The other thing to bear in mind is that you don't know if it's some point during the divorce case that you will be barred from entrance to your house. While I don't know your specific circumstances within the case it does happen with some frequency that one spouse eventually leaves the family home and is not return. This would put you in a vulnerable position if you were not able to readily access the house on your property. Therefore, you should begin to inventory the property within your family home as soon as possible because you cannot always predict the next time that you will be able to do so.

From this inventory and appraisement, you would be able to begin your analysis of how to divide the property in a divorce case. Without a thorough understanding of your property, it would be nearly impossible to accurately divide items between you and your spouse. It can be TD is to perform this kind of activity at the beginning of a divorce but I can tell you that the more accurate you are the better you will be able to think through how to ultimately divide personal property but how to consider your larger items of both separating Community property. Everything functions in tandem with one another and if you disregard the smaller items of personal property he will have a more difficult time assessing how to consider larger items.

These larger more valuable items are things like retirement savings, bank accounts, your primary home, and any secondary homes that you own. Some of these items are so large or are things that you don't think about really is property because they or not readily accessible or even things that you can hold in your hands. However, you need to consider their role within your divorce and we are going to be talking about them in the next section of today’s blog post. Just because you are in your 30s or 40s does not mean that you can glaze over retirement savings and how they will function as a part of your Community property division. Here is how these more valuable and larger assets can impact you and your spouse in a divorce scenario.

How valuable assets play a role in your divorce

So far in today's blog post, we had been discussing topics related to personal property and household items being divided potentially in your divorce case. However, I would like to shift gears now and talk to you about how more valuable property can come to play a role not only in the Community property division of your case but in the divorce as a whole. I am considering retirement accounts, savings account to cover checking accounts, other types of investments, and real estate as being more valuable assets worth considering.

Not only are these items valuable in terms of pure dollars but they have a sort of emotional pull to them, as well. Having to part with some silver Ware or a lawn chair may be annoying but it likely does not affect your bottom line too much or tug at your heartstrings. The same is likely not to be true for a retirement or investment account. Not only are these bigger ticket items in terms of their value and cost but the biggest items probably have some emotional pull for you as well. Consider all the hard work that went into saving that build up your emergency fund and savings account. Potentially losing a portion of or all of an item like this can be enough to throw you off and harm you will may psychological perspective. 

For that reason, you need to be aware of the consequences of your decisions regarding these sorts of Community property division matters. Overall, people view their personal property in ways that are different than their investments. A judge would look to your and your spouse's current scenarios when it comes to income when dividing up retirement savings. For example, if you are a high earner and have a substantial amount of separate property to your name then it will be more likely that a judge would award larger portions of your retirement to your spouse if those retirement portions are Community property. In this way, a court would seek to be as fair as possible when dividing up property in a divorce. It does not matter whose name is on the paperwork.

All of what I just mentioned about retirement or other investment accounts also applies to your family home. There are obvious financial and emotional factors involved when you are dividing up the family house in a divorce. You have built up so many memories in your family house that it can be difficult to part with the home. As a result, I have seen clients and opposing clients go to great lengths to keep the house both during the divorce and after. There is nothing wrong with doing this, in theory, but you need to guard against making decisions that are more emotional than rational. While it may feel good to allow your children to remain in the family house after divorce that may not be what is in your best interest or theirs.

Dividing a house in a divorce typically means one of three outcomes: you were manning in the house after the divorce, your spouse remaining in the house after the divorce, or nobody remaining in the house after the divorce. Although there are relatively few options when it comes to dividing up the house getting to that point can be difficult. The first step in the process is to make sure that the home you are living in currently is part of the community estate. As we have already covered the house may be part of your separate estate or that of your spouse. Even if this is true, if mortgage payments or improvements of the home were done during her marriage then you, 2, whatever stake in the house that you have will be based on a potential reimbursement claim. It will be up to you to calculate this amount and provide proof showing that those payments or reimbursed to you in the final tally of your case.

What happens with the house during the divorce? 

Or a relevant question to ask yourself would be what would happen to your house during your divorce. You may be able to recall an old television show called I Love Lucy. One of the gags from that show that has stood the test of time is Lucy taking a marker or piece of chalk and drawing a line down the middle of a room indicating her half of the house and her husband's half of the house. You may have also seen this gag repeated in modern television shows or movies. It is a playful way to indicate what we all know: a husband and wife both have interests in the marital house. This is also true in Texas assuming that the home was purchased during the marriage. 

In that case, we need to decide not only what happens with the house after a divorce but can what can happen with the house during the case itself. Everyone needs a place to stay and it is unlikely that both you and your spouse will remain in the house during the case. Many times the answer to this question will be determined by which have you will be the primary caretaker for the kids. Many times the parent who will not be the primary caretaker for the kids will leave the house to allow the children to remain in the house at least for the duration of the case.

The temporary orders phase of divorce will allow you and your family to adjust to life during and after a divorce case. I look at this situation as one where you all can focus on getting your life on track and caught up to the speed of your case. Sharing custody of your children is a process that you need to learn just like anything else associated with your divorce. That process takes some practice but there is no better time to learn than during the divorce case itself.

Hopefully, this period will also do it helps you to learn whether or not you want to stay in the house after a divorce or whether it is best to move on from the house. This can take some pretty serious introspection on your part in terms of really thinking hard about whether it's in your financial best interest to move or stay in the house. You should talk with your attorney about issues like refinancing the mortgage, paying a mortgage on your own, and whether you have the financial wherewithal to do so. 

Selling a home in a divorce

Ultimately you may decide just to sell the house and split any equity with your spouse. For all involved, this may be the best decision because it allows for us starts all around and the infusion of cash from the sale of the home can help you to pay bills, debts and take care of other items that may have been stacking up during your divorce case. Doing your spouse may agree in your final decree to terms of selling the house as far as selecting a realtor, a green and a price and then so in the home. This may seem like a step backward in your life but I can tell you that moving forward with the house that may not have great memories may not function that well for you in a post-divorce world is not smart. Rather, you will need to reassess your life after your divorce to c re-calibrate yourself for future successes. 

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 consultation six days a week in person, over the phone, and video. These consultations are a great way for you to learn more about the role of Texas family law and how your family circumstances may be impacted by the filing of a divorce or child custody case.

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