Texas Divorce: Dividing Property
All income earned and property acquired by either spouse during the marriage belongs to both spouses equally
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Texas is what's called a community property state. This means that all income earned and property acquired by either spouse during the marriage is community property and belongs to both spouses equally, so it must be split equally between the spouses when they divorce. Likewise, all debts that either spouse incurs during the marriage are considered community debts and belong to both spouses equally. However, if there are “just and right” reasons why the assets should be distributed differently, then the court may order an unequal result.
Presumption of Community Property
The court begins its evaluation with a presumption that all property held by either spouse during marriage is community property. Texas law defines community property as any property acquired or earned during marriage that isn’t separate property. A spouse who wants to keep an asset free from division must prove by clear and convincing evidence that the asset is separate property.
Separate property includes anything that belonged to one spouse before marriage and was kept separate throughout the marriage. It could also include property that was given only to one spouse during the marriage--for example, a gift made by a friend or family member to the husband alone, or an inheritance that the wife received from a relative.
If one spouse receives money from a lawsuit or settlement because of personal injuries, that money remains the separate property of the injured spouse, unless it includes money that is intended to compensate for loss of earning capacity during marriage. For example, the wife earns $4,000 a month as a sales representative, but is injured in a car accident and wins her lawsuit against the other driver. The money she gets from that driver for her injuries is hers alone, unless part of it was to pay her for the month she had to take off of work to heal. The portion of the award that pays her back for those earnings is community property.
The most common types of property divided at divorce are real property like the family home, personal property like jewelry and clothing, and intangible property like income, dividends, and benefits. All the community property must be divided between the spouses when the marriage ends, and all of the marital debts as well. Once a spouse proves that an asset is separate property, then that asset remains in the hands of the original owner; the court cannot award it to the other spouse.
(Find more answers in Texas Community Property FAQ).
Shifting the Balance
The court has discretion to distribute the community property in whatever way it believes is fair, but there must be a reasonable basis for a distribution that's not equal. To determine whether the presumption of equal division should be adjusted, the court may consider factors such as the education, ages, and health of the spouses, as well as their respective earning capacities, skills, and business opportunities. The court may also look at whether a spouse is the primary caregiver for the couples children, and the amount of separate property each spouse owns, among other facts and circumstances. Whether one spouse was at fault in causing the marriage to fail is also a factor if the just considers it important.
Throughout the process, the divorcing spouses will have opportunities to agree between themselves on how to split the community property. If they decide, for example, to sell the house and split the proceeds, allow the wife keep all of her retirement benefits, and give the husband the vacation cabin, then they can submit a marital settlement agreement to the court including these provisions. Usually, a court will accept a negotiated agreement without further involvement. On the other hand, if the spouses cannot work together, or if there are certain items of property that they cannot agree on, then the court will decide for them.
Spousal maintenance (alimony) is a payment from one spouse to the other to help the recipient spouse meet “minimum reasonable needs” after divorce. A court’s determination of maintenance is separate from the division of community property.
In Texas, courts are reluctant to make maintenance awards unless one spouse has been convicted of family violence against the other spouse or children. Otherwise, the spouse seeking support must not be able to be self-supporting because of a disability, must be the custodian of a disabled child, or, in a marriage that lasted 10 years or more, must lack the ability to earn sufficient income.
Even where one of these factors applies, the spouse seeking support must make an effort (and prove it) to secure income and become self-supporting; otherwise, there is a presumption that no maintenance is due. Once the spouse overcomes this presumption, the court will consider both spouses’ ability to pay support, the education and skills of the spouses, and whether one spouse contributed to the education of the other. The court also evaluates whether a spouse contributed property or homemaking services to the marriage, the length of the marriage, the age, earning ability, and health of the recipient spouse. Additionally, the court will not ignore bad acts by either spouse, such as wasting community property or committing adultery.