Across the country, people who go through a divorce find themselves having a property that they own divided in some form or fashion. The primary question that you need to ask yourself, whether you are divorcing in Texas or Tennessee, is how to divide the property. While each state has its particular laws on this subject, generally speaking, all 50 states follow two ways of dividing property: equitable distribution or Community property.
Texas courts and the Texas Family Code rely on Community property to determine how property should be divided in divorces. Community property laws can trace their roots back to Spanish civil law and matrimonial law in Mexico. It should come as no surprise that many of the states that utilize Community property to divide marital property in divorce are both in the southwest and western part of the United States. Having a connection to Mexico explains a great deal of how the law in Texas streets marital property.
Of the 50 states in our country, only about 13 utilized Community property to divide the marital property into divorces. The rest of the states in our country use principles of equitable distribution when it comes to dividing property. Today’s blog post will primarily focus on equitable distribution and its application in a Texas divorce. However, before delving into that, let’s begin by reviewing the fundamentals of Community property. This will provide you with an understanding of what it entails to undergo a divorce in Texas and the basic functioning of our state’s divorce laws.
An overview of community property law
Before I begin with this basic overview of Community property law in Texas, I have to tell you that this subject is pretty complex. We do not have the space to go over every aspect of Community property in a relatively short area as we have here in this blog post. Let’s start by exploring the fundamental concepts and principles of Community property law. This will give you a sense of what to expect in your divorce case. Course, as with anything in life, there are exceptions to every rule, and there is no way for me to be able to guess exactly what you will see occur in your divorce. With that said, let’s talk about Community property law in Texas.
Understanding community property principles in marriage and divorce
Community property principles generally treat any property or income acquired during your marriage as marital property. This means that the Community property is subject to division in your case, based on its classification at the time of divorce. On the other hand, any property you or your spouse owned before or acquired during your marriage as a gift, through inheritance, or as a personal injury settlement is classified as belonging to either of your separate estates. If you think of it in this way, there are three columns on a sheet of paper when it comes to property for you and your spouse: your separate property, their separate property, and Community property.
On a basic level, this is how property in your divorce will be classified. At the beginning of your divorce, the court will ask you to turn in an inventory and appraisement. The checklist asks you to inventory all property you and your spouse own right now, tell the court what state the property belongs in, and finally disclose What you believe the property to be worth. This exercise is crucial to giving the court an idea of the value and amount of property you and your spouse owned.
The Contrast Between Community Property and Inequitable Distribution States
The stark difference between a Community property state and an inequitable distribution state’s property division is notable. In a Community property state, there is no distinction based on whose income was used to purchase property during the marriage. Imagine a large pot of money in your living room where both spouses pool their earnings upon exchanging vows. Whether you’re a stay-at-home mother or your spouse is a successful doctor, income earned during the marriage holds equal value for both parties.
All property purchased with joint income, including your home and any investment savings accumulated during your marriage, constitutes Community property. Discovering how Community property operates in this state might be surprising for many individuals. It underscores the concept that marriage merges two individuals into one entity, with no differentiation between their incomes or properties.
This revelation could be comforting for a hesitant spouse contemplating divorce due to financial concerns. Relying on a spouse for income and survival might have led to hesitancy or procrastination in pursuing a divorce, fearing the uncertainty of post-divorce life. Questions about reentering the job market after an extended absence or the need for further education may arise. While these are important considerations, they should not impede or delay the decision to seek a divorce. Hopefully, understanding this aspect of Community property law boosts confidence in your ability to thrive post-divorce.
Navigating the Reality of Community Property Law in Texas
On the other hand, you may be looking at this reality of Community property law in Texas and can’t believe your ears or eyes. You may have thought that you would end up with most of the property because you did most of the earning in the marital relationship. On some level, this makes a great deal of sense. As we have already covered, many states would agree that this is the most reasonable and equitable way to conceive of marital property and division in a divorce. However, it just so happens that you reside in a state that does not adhere to these principles. This doesn’t imply that your particular divorce won’t utilize equitable distribution principles. However, if left to a judge, Community property law will prevail.
So, what you need to be asking yourself is what does this mean for you and your divorce? What can you do to prepare for your divorce and understand how Community property and equitable distribution may interact within the confines of your case? What are the main differences between the two types of marital property law, and how can you best prepare for any range of eventualities in your case?
To address those questions, let’s discuss how you can utilize equitable distribution principles in your divorce, even though they are not the law in Texas.
An overview of equitable distribution principles as applied in states other than Texas
Texas does not apply equitable distribution principles as a matter of law. However, this doesn’t mean that all Community property laws oppose fair distribution principles. While states don’t directly align their use of Community property law with equitable distribution, they may not divide assets accumulated during your marriage similarly regardless of income. In an equitable distribution situation, the court would likely divide the property according to the individual who used their income to purchase or acquire it.
Utilizing equitable distribution principles means that when you file for divorce in a state that is not a Community property state, you would ask for a divorce based upon fair distribution principles. Simply put, this means that you are asking the court to divide your marital property equitably. In this manner, the court would divide debts and property primarily based on the income used to acquire the property and the party who incurred the debt.
Determining Marital Property
One way that Community property States and equitable distribution states are similar is that a court in either state would ask spouses like yourself to determine the marital property and marital debts. From this standpoint, the court would be able to decide how to divide the property up. Connected to this type of analysis is the court’s decision on the date to determine the value of the marital property. In some cases, courts consider the value of the property on the day when the divorce petition was filed. Other courts may use the date of final mediation or any different date for that matter.
We also saw how Texas would ask you to assess and appraise your property to determine its approximate value. Equitable distribution states also follow this practice. The court needs to select an aggregate amount of the property owned to equitably distribute between you and your spouse. For example, if all the marital property divided up equals $1,000,000, a court can begin to divide the property according to the amount of income contributed throughout your marriage. If you contributed 90% of the income throughout your wedding, you would likely receive 90% of the marital property when divided.
What are relevant factors that a court in an equitable distribution state would utilize to divide marital property?
As with anything else, each state utilizes specific factors that others may not. I want to provide you with a basic overview of relevant factors in many equitable distribution circumstances. You can begin to think about how these factors either favor or disfavor you and your spouse in your divorce. From there, you can further figure out whether or not Community property principles prefer you or whether or not equitable distribution factors would be more in line with your role in the marriage.
The most likely to be used factor in determining how to divide property in an equitable distribution method is the length of your marriage. The longer your marriage has lasted, the more likely a court would divide property more evenly between you and your spouse. Whereas, shorter marriage would likely find that the court plays pretty tight with the rules on assigning property to each of you based on your contributions in terms of income.
Property Division Considerations in Community and Equitable Distribution States
A series of factors that are also used in Community property states like Texas are your spouse and your ages, health situations, educational levels, skills in the workplace, and work history. These factors are all relevant because your past performance at work will likely determine your future ability to earn an income. From here, in a Community property state like Texas, likely, the spouse in your marriage who is at a disadvantage in these factors would likely receive more property rather than less. The same is expected to be true in an equitable distribution scenario.
Likewise, if you or your spouse contributed a great deal to others’ ability to obtain an education, then that is going to be noteworthy. For instance, if you stayed home to take care of the kids, worked multiple jobs, or performed any other duty to allow you have been to get that medical degree that we were referencing earlier, then that is undoubtedly going to be a factor when it comes to determining how to divide the marital property in a Community property state.
Future Income and Property Opportunities in Equitable Distribution States
Next, the court will assess the future opportunities for both you and your spouse to earn income and acquire property. For example, in an equitable distribution scenario, even if you contributed the majority of the income earned during your marriage, this doesn’t guarantee that you’ll be allocated more property. If your spouse has limited future earning potential, you might find the property divided more similarly to a Community property state.
The bottom line is that these are factors relevant to inequitable distribution in States and the Community property state like Texas. Community property laws allow Texas family court judges to assign weight to each element as they see fit. Therefore, it is tough to say how a particular judge will view your specific circumstances. Since every case is different, there could be a wide range of outcomes from a judge’s standpoint.
What if you want to use equitable distribution principles in your Texas divorce?
All of this leads us to a discussion of how equitable distribution principles can be utilized in your divorce. While a family court judge would utilize Community property principles when dividing marital property in a Texas divorce trial, the fact is that you and your spouse can use Community property, equitable distribution, or any other method you see fit to divide your property in mediation or informal settlement agreements.
The key to this discussion is that this needs to take place before going to a trial. If you wait until you get to a problem, you rely on the judge to make final decisions in your case. However, you and your spouse will have plenty of opportunities to utilize whatever principles you see fit to divide up property. The only thing that matters is that the court divides the property fairly and not obscenely in favor of one spouse or the other. That is what a family court judge will be looking to when reviewing your final decree of divorce.
In closing, the main ingredient to this discussion is an attorney who knows how experience and money get you to the point where a division based on either of these theories is possible. Again, what the Texas family code says in what you and your spouse want to do does not have to be the same thing, period. Instead, with your attorney there to guide you, you can utilize the principles that you think are most equitable and most appropriate for your family in your specific circumstances.
Other Related Articles:
- How Does Death Affect an Unresolved Equitable Distribution Claim?
- What effect does reconciliation have on equitable distribution?
- Can I recover attorney’s fees with Equitable Distribution?
- Is Money Received in Property Distribution Taxable in Texas?
- What effect does reconciliation have on equitable distribution?
- Can I recover attorney’s fees with Equitable Distribution?
- Is the division of property always fifty-fifty? What factors are considered in an unequal distribution of property?
- How Do I Avoid Financial Ruins in a Divorce?
- How is Community Property Divided in a Divorce in Texas?
- Navigating the Complexities of Divorce: Why You Need an Experienced Attorney
Frequently Asked Questions
Texas follows the Community Property system for property division in divorces.
Texas does not follow equitable distribution. Instead, Community Property laws apply.
In Texas divorces under the Community Property system, spouses typically divide assets acquired during the marriage equally.
Texas is a Community Property state when it comes to property division in divorces.
Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan
if you have any questions about the material contained in today’s blog post</a>; please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free of charge consultation six days a week in person, over the phone, and via video. These consultations are an excellent way for you to learn more about the world of Texas family law and how your family circumstances may be impacted by the filing of a divorce or child custody case.
Bryan Fagan, a native of Atascocita, Texas, is a dedicated family law attorney inspired by John Grisham’s “The Pelican Brief.” He is the first lawyer in his family, which includes two adopted brothers. Bryan’s commitment to family is personal and professional; he cared for his grandmother with Alzheimer’s while completing his degree and attended the South Texas College of Law at night.
Married with three children, Bryan’s personal experiences enrich his understanding of family dynamics, which is central to his legal practice. He specializes in family law, offering innovative and efficient legal services. A certified member of the College of the State Bar of Texas, Bryan is part of an elite group of legal professionals committed to ongoing education and high-level expertise.
His legal practice covers divorce, custody disputes, property disputes, adoption, paternity, and mediation. Bryan is also experienced in drafting marital property agreements. He leads a team dedicated to complex family law cases and protecting families from false CPS allegations.
Based in Houston, Bryan is active in the Houston Family Law Sector of the Houston Bar Association and various family law groups in Texas. His deep understanding of family values and his professional dedication make him a compassionate advocate for families navigating Texas family law.
