The Woodlands, TX Property Division Lawyer

Overview of Property Division Laws in Texas

In a community property jurisdiction, all assets acquired by either or both spouses are considered to be owned by them equally. Separate property includes assets that one individual owned before marriage, or assets that were gifted to or inherited by one spouse. To better understand the distinction, some examples may be helpful.

Community property may include any of the following if acquired during the marriage:

• The family home and other real estate, regardless of whose name is on the deed;
• Vehicles, furniture, and household items;
• Bank accounts, stocks, and other investment accounts;
• Wages earned by either spouse;
• Interest income from investments; and,
• Many others.

Separate property is anything a person owned before marriage, as well as:

• Gifts to him or her individually,
• Assets acquired by a will or inheritance;
• Any retirement or savings owned before the date of marriage.

The default rule is that all community property is split according to what is “just and right,” as the terms are used in the statute. This division may not result in an exactly equal split, as the court will make the distribution according to equitable principles. Separate property belongs to the respective spouse after divorce.

Note that debts are also categorized as community or separate in nature. Each person is responsible for debts they owed prior to getting married, and both are obligated for debts incurred during the marriage.

Challenges with Dividing Certain Assets

While some community property is clear-cut, there are unique complications with other types of property. Our attorneys at The Ramos Law Group, PLLC can advise you on two types of challenging assets:

1. Business Ownership: Any company started during the marriage is considered community property, so it belongs to each spouse equally. Following typical property division rules isn’t easy, so parties are usually faced with one of the following options:

• One spouse buys out the other;
• Both parties continue the business as co-owners; or,
• The business is sold to a third party and the parties split the proceeds.

2. Stocks: Initially, it may seem that selling the stocks and dividing the proceeds is simple. However, there are tax implications when selling. Plus, some stocks include provisions restricting their transfer or represent a future interest – i.e., a stock option. In such situations, the parties might consider splitting the stocks instead of the proceeds or have one pay the cash value to the other. 

The Property Division Process in Divorce

Texas law encourages the parties to agree on property division, and the court is not likely to disturb it unless is extremely unfair to one person. Under the circumstances, the process is relatively simple. The parties negotiate division of community property, sign the agreement, and enter the document in court as a final divorce decree. 

When the parties cannot agree on property division, the court will decide the matter ata final trial. During these proceedings, both parties present arguments, evidence, and testimony regarding how assets should be divided between them. At the conclusion, the judge applies the laws to the facts to make a determination on property division.

Property Division Considerations

In Texas, property division during a divorce is typically guided by the principle of “community property.” This means that property acquired during the marriage is generally considered community property and is subject to division. However, there are several factors and considerations that a judge might take into account when determining how to divide the property:

1. Characterization of Property: The judge will first determine whether each asset is community property, separate property, or a mix of both. Generally, property acquired before the marriage or through inheritance or gifts is considered separate property and is not subject to division.
2. Length of the Marriage: The duration of the marriage can influence how assets are divided. Longer marriages might result in a more equal division of community property.
3. Economic Circumstances: The financial situation of each spouse, including their earning potential, employability, and financial needs, will be considered. This might involve evaluating their ability to support themselves post-divorce.
4. Contributions to Marriage: Judges will consider each spouse’s contributions to the marriage, both financial and non-financial. This could include factors like homemaking, child-rearing, and supporting the other spouse’s career.
5. Fault in the Breakup of the Marriage: While Texas is a “no-fault” divorce state, a judge might consider the circumstances leading to the divorce, especially if one spouse’s behavior has had a significant financial impact.
6. Health and Age: The physical and emotional health, as well as the ages, of both spouses might be considered, especially if it affects their ability to work and support themselves.
7. Custody of Children: If there are children involved, the judge might consider the custodial arrangement and which parent will be the primary caregiver. This could influence decisions about the family home and other assets.
8. Property’s Nature and Use: The judge may consider the nature of the property, its value, and its current use. For example, the family home might be awarded to the custodial parent for the benefit of the children.
9. Spousal Support: If spousal support (alimony) is being awarded, it could affect property division decisions. The judge might use property division to offset the need for ongoing financial support.
10. Agreements and Arrangements: If the spouses have a prenuptial agreement or have reached a property settlement agreement, the judge will typically consider these documents when making property division decisions.

Remember, the final division of property will ultimately be up to the judge’s discretion based on the specifics of the case and the applicable laws. It’s highly recommended to seek legal advice from a qualified family law attorney in Texas to understand how these considerations apply to your unique situation.