Texas is one of a handful of states that follows the community property system in a divorce. In a Texas divorce, the court will presume that any asset acquired by a spouse during a marriage is community property A spouse may rebut this presumption by providing clear and convincing evidence that the asset is their separate property.
Separate property includes property owned prior to marriage and property acquired during the marriage by gift, devise, or inheritance, and other limited categories as provided by Texas law. Examples of separate property are birthday gifts, inherited real and personal property, and real and personal property purchased prior to marriage.
The Texas divorce court will make a “just and right” division of the community property. The Texas Constitution prohibits the court from awarding one spouse’s separate property to the other spouse. If you have separate property assets, it is very important to gather and maintain all of the evidence as to how you acquired and maintained those assets to avoid them being characterized as community property and divided upon divorce.
The complexities surrounding division of community property
Valuation of assets and liabilities is an essential step to determine the proper division of the marital estate. It is common, especially in high net worth estates, for experts to be employed to apply accounting or other professional guidelines to value complex assets such as a business interest, deferred compensation plan, or real estate.
Once the property is valued, the court will determine how to divide it in a just and right manner. Texas law does not mandate that community property has to be equally divided. Circumstances that may lead to one spouse receiving more property than the other include:
- The marriage’s length
- Age disparity
- Child custody
- Potential employment/business opportunities
- Both spouses’ ability to make a living
- Level of education
- Health status
- Fault in the form of abuse, adultery, and desertion
- Community property fraud
- Tax consequences
Despite the parties’ best intentions for an amicable divorce, disputes over the character, value, and the ultimate division of the assets can be a source of conflict which causes the divorce case to evolve into a battle when significant assets are at stake. If you or your spouse is claiming significant separate property or if your estate involves assets which require an expert valuation, it is in your best interest to enlist the help of an experienced family law attorney to make sure your interests are protected.