One of the most stressful aspects of a Texas divorce is the splitting of marital and non-marital assets. One party may fear losing a significant percentage of his or her net worth, and another party may fear being left without adequate financial support. Understanding the basic rules of property division in Texas can help every one plan for life after the divorce is completed.
The basic rule
The basic rule in Texas is that property acquired during the marriage is deemed to be community property, and it must be divided equally between the parties. Certain types of property can be easily classified as community property if the asset was acquired during the marriage. The family residence is the most obvious example of community property. An asset that was acquired using the personal assets of one party may be classified as separate property. Generally, community property includes real property, interest in a business (other than publicly traded stocks), money, retirement accounts and household furnishings if the asset was acquired during the marriage, regardless of which spouse’s name is on the title.
Understanding “equal division”
The concept of equal division is often misunderstood. In practice, the rule requires that each spouse be awarded a share of community property that is equal in value to the value of property awarded to the other spouse. Under this rule, a single asset, perhaps the family residence, can be sold and the net proceeds divided equally between the parties.
Identifying community and separate property
Most of the disputes about property division involve the classification of a particular asset as either community property or separate property. Stock acquired in part prior to the marriage and acquired during the marriage can prove difficult to classify. Courts will usually attempt to determine which spouse’s income was used to purchase the stock, but even this approach can be complicated if the funds used to purchase the stock came from different bank accounts.
Each of the rules stated above has numerous exceptions. Anyone approaching a divorce should consult an experienced divorce attorney for advice on how the court is likely to classify and divide community property.