Marital Property and Debts in Texas
Serving the Lake Jackson & Houston Area
When a marriage begins to break down, the distribution of property is often a chief point of contention among spouses. Texas is what is known as a community property state, meaning that any assets or debts acquired by either partner during a marriage belong equally to both spouses. Accordingly, each spouse is to receive an equal share of community property upon divorce. However, a judge can shift this division in favor of one spouse if provided with reasonable cause. If you are going through a divorce, ensuring your interests are protected begins with a call to JM Davis Law PLLC. Our Lake Jackson and Houston attorneys can work tirelessly to uphold your rights and help you through each step of this difficult time.
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Is Texas a Community Property State?
In Texas, the distribution of property begins with the classification of every asset as either community or separate property. All assets which were acquired, created, or earned during the course of a marriage can be considered community property and are divided between spouses equally upon a divorce. Typically, each spouse is allowed to keep any separate property. Additionally, all debts such as mortgages, car loans, and credit cards are included during the division process and split between spouses.
Separate property includes assets that are:
- Acquired or created before a marriage
- Gifted or inherited by a spouse from a third party
- Exchanged for or bought with separately owned assets
- Profit derived from assets which increased in value
- Named specifically by a prenuptial or postnuptial agreement
In practice, the distinction between community and separate property is not always clear and many factors can bring the classification of an asset into question. For example, if marital resources contributed to the growth or maintenance of an otherwise separate asset, a spouse can make the case that it should be counted among the community property. The date a couple officially separated can also subject an asset to scrutiny if it is unclear when that item was acquired. The process of asset division can be tremendously complex and our firm can work with you closely to see that you receive your fair share of marital assets.
Intervention by the Court
When a divorce becomes litigated, a court can alter the proportion of assets each partner receives if it is determined that property would not otherwise be split fairly. However, the spouse losing a share of community property will not always see eye to eye with the court for the reasoning behind this deviation. In the event that a judge suspects a disproportionate division of assets is in order, our attorneys can fight to see that your interests are not overlooked.
Factors which can influence the division of property can include:
- One party is “at fault” in a divorce
- Age and physical health of each spouse
- A spouse’s level of education
- Value of all separate property owned
- Earning capacity and projected income
Division of Retirement & Employer Benefits
If one spouse earned interest in profit-sharing, employee benefit plans, or pensions, they will be considered community property and eligible for division if a divorce is filed. If retirement benefits are being divided, you will need to send a Qualified Domestic Relations Order to your employer. Once that is done, the employer will be ordered to distribute benefits to each spouse accordingly.
If there is a 401(k) involved, the employer will generally disperse the funds anywhere from 30-90 days.
Division of Businesses
Dividing a business is often the most challenging as a judge will attempt to value intangibles such as reputation and goodwill. It is not uncommon for divorcing spouses to hire accountants and appraisers to assist in the valuation of the business. If agreements cannot be made, the selling of the business becomes the logical choice.
Defend Your Marital & Separate Property – Call (855) 390-0455
If you and your partner have experienced irreconcilable differences, do not hesitate to contact JM Davis Law PLLC. During a divorce, how marital assets are categorized and divided can affect you for years to come and choosing the right attorney can make the vital difference in your case. Our Lake Jackson and Houston attorneys believe in a client-centered approach to matters of divorce and strive to find the best solution for each person who walks through our doors. When you need uncompromising legal advocacy, partner with our firm and rest assured that your future is in experienced hands.
Questions about marital property? Contact our office and get the answer that you need.