When you divorce, the court (or you and your spouse, if you reach an agreement) will divide your property. In Texas, the courts pay special attention to when and how property was acquired in order to determine how to divide it when a marriage ends.
If you're going through a divorce in Texas, you'll need to understand the lingo that the state and judges use when dividing property. You'll find out the terms you need to know, as well as information about Texas property laws and how they apply in a divorce, in the answers to the FAQ below.
Texas is a community property state. Spouses equally own all of their community property, and they're equally responsible for all community debts. However, unlike some other community property states (like California), in Texas community property isn't necessarily split 50/50 when couples get divorced. The law simply says that judges must divide the community property in a way that's "just and right" (more on that below).
So even though Texas is a community property state, its rules for dividing property in divorce are similar to those in states that follow the "equitable division" principle.
Texas law defines community property as all of the property that either spouse acquires during the marriage, except separate property. It's a broad category, and courts will presume that any item a spouse owns during marriage is community property. (Tex. Fam. Code §§ 3.002, 3.003 (2022); Tex. Const. Art. 16, § 15 (2022).) For that reason, it's easier to use the definition of "separate property" (as discussed below) to figure out what's excluded from Texas' definition of community property.
The most common types of property divided at divorce are:
Common debts divided at divorce include:
In Texas, separate property is:
(Tex. Fam. Code § 3.001 (2022); Tex. Const. Art. 16, § 15 (2022).)
Practically speaking, separate property is anything a spouse earned before marriage, as well as any inheritances, gifts, or personal injury awards the spouse receives during marriage.
Under Texas community property laws, courts must assume that any property possessed by either spouse during marriage and at the time of divorce is community property. A spouse must demonstrate that something is separate property by giving the court "clear and convincing evidence" that the item isn't community property. (Tex. Fam. Code § 3.003 (2022).)
As mentioned above, when a couple divorces in Texas, the judge must divide their property in a manner that is "just and right." This means the division of property must be fair under the circumstances—it does not necessarily mean that assets will be split 50/50.
The factors Texas courts consider when deciding the "just and right" way to split community property include:
(Tex. Fam. Code §§ 7.001, 7.002, 7.008 (2022).)
Texas law encourages spouses to reach an agreement out of court regarding the division of their property. When spouses have a written settlement agreement about property division, the court will review it and, if the court determines its terms are just and right, will incorporate the agreement by reference into the final divorce decree. If the court doesn't approve the settlement agreement, the judge can request that the spouses provide a revised agreement or disregard the agreement and decide the matter after a hearing. (Tex. Fam. Code § 7.006 (2022).)
In Texas, when a married person accumulates an interest in a pension, retirement, profit-sharing, or other employee benefit plan during the marriage, it is community property and subject to division upon divorce. (Tex. Fam. Code § 7.003 (2022).) When a court awards a portion of one spouse's retirement benefits to the other spouse, the attorneys will prepare a Qualified Domestic Relations Order (QDRO) to be sent to the employer, whom the court will order to distribute benefits to each spouse in accordance with the court's order.
In the case of a cash account, such as a 401(k), the employer will usually disburse the funds in 30 to 90 days. In the case of benefits to be paid upon retirement, such as a pension plan, the court order will provide the employer with a calculation of a percentage to be applied when payments begin, and order the employer to send the appropriate amounts to the other spouse in accordance with the court's order.
Like other community property assets, the court doesn't have to divide retirement and pension accounts exactly equally between the spouses. For example, if each spouse has their own retirement account or pension, the court might simply award each of the spouses their own account—particularly if the amounts in each are relatively similar or the award of other community property makes up the difference.
Like any other asset, judges must consider the nature of a spouse's business or professional practice when valuing and dividing community property. Whenever a spouse starts or develops a business or professional practice during the marriage, there is a potential community property interest that the court must address in the divorce.
The most time-consuming and challenging aspect of determining the value of a business or professional practice is in valuing "goodwill," which is the intangible value that most businesses have based on their established name or reputation. Even a business or practice that would not typically sell on the open market has a goodwill value, which the court must ascertain when the couple divorces.
Divorcing couples often hire certified public accountants and business appraisers to determine the value of a business or professional practice. The accountant or appraiser will review the books and records of the business or practice and prepare a written report.
Spousal maintenance ("alimony") is a payment from one spouse to the other to help the recipient spouse meet their "minimum reasonable needs" after divorce. A court's determination of spousal maintenance is separate from the division of community property.
Texas courts will award maintenance in only certain situations. Namely, when one spouse has been convicted of family violence against the other spouse (or children), or when the spouse seeking support can demonstrate that:
(Tex. Fam. Code § 8.051 (2022).)
Even when one of these factors applies, the spouse seeking support must make an effort (and provide proof of their efforts) to secure income and become self-supporting; otherwise, the court assumes that no maintenance is needed. (Tex. Fam. Code § 8.053 (2022).)
When a spouse is able to show that maintenance is needed, the court will consider factors such as:
(Tex. Fam. Code § 8.052 (2022).)