Understanding community property laws in Texas

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Understanding community property laws in Texas

| Sep 29, 2020 | Divorce |

Texas uses community property laws for asset and debt division in a divorce. These guidelines require divorcing couples to evenly share property and debts accumulated by either spouse during the marriage.

Before agreeing to a property division arrangement, review the community property laws in Texas.

Distinguishing separate property

Only certain items qualify as separate property in a Texas divorce. Each spouse has the sole right to his or her personal injury settlements, inheritances or gifts received during the marriage. If a person owned property or accrued debt before the marriage, it constitutes community property only if kept completely separate throughout the marriage.

Businesses owned by one spouse are still community property if he or she grew the business while married. In this case, understanding the fair market value of the business can ensure fair property division. If one spouse owns separate investments that date before the marriage, dividends and interests paid on those investments during the marriage are community property.

Distributing marital assets

Texas couples can make their own arrangements about dividing community property. However, when spouses cannot agree, they can ask the court to make a legally binding divorce agreement.

Generally, the laws favor equal divisions of assets at debts. The judge has the discretion to divert from this arrangement with consideration of each spouse’s:

  • Age
  • Health
  • Education level
  • Employment situation
  • Contribution to child care
  • Separate assets
  • Fault in the end of the marriage

When the divorcing spouses have a prenuptial agreement, the court will abide by its provisions for property division. If a couple owns significant assets, dividing them becomes complex and usually requires professional valuation.