How Are Marital Debts and Assets Divided in a Texas Divorce?
When you seek to legally terminate your marriage, there are generally three major issues that must be addressed:
- The custody of minor children, if there are any
- The support of a spouse or minor children, if warranted
- The division of marital debts and assets
Allocating Marital Property and Obligations in a Texas Divorce
Texas is among the minority of states that applies the concept of “community property” to the division of a marital estate. In Texas, that means that all property of the marriage, with a few exceptions, belongs equally to the parties and must be divided equally. The same principle applies to any debts incurred by the parties.
How Does Texas Define “Community Property”?
Pursuant to the Texas Family Code, community property includes all property obtained, secured or acquired by either spouse during the course of the marriage, except any property defined as “separate property.” Community property generally includes real estate and furnishings, household goods, financial accounts, personal property, retirement funds and business interests. Community obligations include mortgage or rent payments, credit card debt and consumer loans.
What Is Separate Property under the Texas Community Property Laws?
The Texas Family Law Code also specifically defines what qualifies as separate property:
- All assets or property owned or claimed by one spouse before the marriage became legal
- Any assets or property received by one spouse during the course of the marriage through an inheritance, either under a will, a trust or through intestate succession
- Any assets of property received by either spouse during the course of the marriage as a gift, either from the other spouse or from an unrelated third party
- Any verdict or settlement recovered by one spouse during the course of the marriage for personal injuries suffered, excluding any award for lost wages or income during the marriage
Must the Court Issue an Order Dividing the Debts and Assets Equally?
While the general principle is an “equal” distribution, the Texas Family Code gives the court the authority to divide the marital property in a way that is “just and right.” In practice, many judges have used this provision to allocate more property to one spouse than the other. When evaluating what will be considered “just and right,” the courts have looked at a number of factors, including:
- The extent to which the dissolution of the marriage was the “fault” of one party, whether due to adultery, waste of marital assets, criminal activity or substance abuse, for example
- The disparity in earning power between the spouses, including the potential employability of both spouses
- The health of the parties
- Who will have custody of any minor children
Contact the Experienced Family Law Attorneys at Bailey & Galyen
At the law office of Bailey & Galyen, we offer a free initial consultation to every client. To speak with a proven child support attorney, contact us by e-mail or 844-402-2992 at one of the convenient locations listed below. We will take your call 24 hours a day, seven days a week.