Houston Property Division Attorney: What Do Texas Marital Property Laws Mean For Your Contested Or High-Asset Divorce?

Property, for marital and divorce purposes in Texas, consist of the following: Community Property and Separate Property.

• Community Property: Generally speaking, community property consists of anything of value acquired or earned by either spouse, or by both spouses, during the marriage. It usually makes no difference in whose name an asset is titled, or who earned the money to acquire the asset. So long as it was acquired during the marriage (and was not a gift or an inheritance) it will be presumed to be a community asset. The court in a Texas divorce is required to approve or render an order dividing the community property between the spouses.
• Separate Property: Generally speaking, separate property is property that a spouse already owned prior to the marriage. Separate property can also include an inheritance or certain gifts received by a spouse during the marriage, as well as certain monetary recovery from personal injury claims or lawsuits. A Texas Court is not authorized to divide or award any share of a spouse’s separate property to the other spouse. However, in appropriate cases, a spouse may be able to assert or to raise a reimbursement claim against the other spouse’s separate property.

Law Thompson, P.C., In Houston — Your Helping Hand At The Brink

Typically, these major examples of community property are among the many at play during negotiation and litigation of property division outcomes during a Texas divorce:

Houston property division lawyer Travis Thompson personalizes his legal leadership, tailoring quality counsel to fit the unique situations that both traditional and nontraditional families find themselves in. He also offers round-the-clock accessibility so that any concern, no matter how large or small, can be addressed in ways that bring you peace of mind.

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What Are Common Questions About Texas Divorces?

You can hear a lot of misinformation about the divorce process in Texas, so it is always better to discuss your unique situation with an attorney. Here are some of the most common questions our clients ask:

How is property divided in a divorce in Texas?

Texas is a community property state, which means that property acquired during the marriage by either spouse is generally considered jointly and equally owned. Although there are some exceptions, this includes income, assets and debts acquired during the marriage.

What does “property acquired during marriage” mean?

Generally, this means any income or assets obtained by either party once the marriage began. This can include money, contributions to a 401(k), vehicles, boats and real estate – even if those assets are only titled in the name of one spouse. It can also include income from property that was owned prior to marriage, such as rental properties or businesses.

What is the difference between separate property and community property in a Texas divorce case?

Generally, each party’s separate property is not subject to division in a divorce, so long as that property was not commingled with marital property. In addition, some gifts and inheritances to one spouse may be considered their separate property, as our assets are set aside as one spouse’s separate property in premarital or postnuptial agreements.

What are some complex property division issues that can arise in a Texas divorce?

Some of the issues that can make the property division process complicated include the ownership of a family business, interest in professional practices, interest in stock options or deferred compensation, real estate investments, retirement accounts and pension plans, intellectual property holdings, and the possibility of hidden assets. Property division decisions can also have significant tax implications that have to be considered.

What is a qualified domestic relations order (QDRO), and when is one necessary?

A qualified domestic relations order (QDRO) is a court order often issued during divorce proceedings in Texas. Its primary purpose is to fairly divide retirement assets, such as pensions or 401(k) plans, between spouses. Without a QDRO, one spouse would not automatically be entitled to any portion of the other spouse’s retirement savings, even if considered marital property.

A QDRO specifies the amount of retirement savings to be allocated to the plan participant’s ex-spouse when ending a marriage. A QDRO can help ensure fair property division in a divorce involving complex retirement assets.

As a community property owner, am I entitled to half of my spouse’s retirement benefits?

The term community property refers to the assets acquired during a marriage. In community property states such as Texas, courts deem all property acquired during a marriage equally shared by both spouses. That means marital property, including retirement savings, could be divided 50/50.

However, there is no guarantee that the court will split a retirement plan precisely in half. Several factors can lead to an unequal division of assets. Examples include:

• Marriage length: Spouses in shorter marriages may receive fewer retirement assets.
• Earning potential: A spouse with lower future earnings might get a greater share.
• Household contributions: A spouse who stayed home to raise kids and maintain the residence might get more retirement assets.

Additionally, only the retirement benefits earned during the marriage are considered community property in a divorce. Those obtained before the marriage are considered separate property and are not subject to division.

If you are seeking to obtain a fair share of marital property, a legal professional can help create equitability. Our divorce attorneys can explain the legal aspects of dividing retirement plans and, if necessary, draft a qualified domestic relations order (QDRO) on your behalf, enabling a smooth transfer of funds.

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Understanding Community Property

Divorcing couples are bound to follow the asset division structures mandated by the states in which they live. There are nine states in the country that are known as “community property states. Texas is one of them. This means that Texas law requires couples to treat virtually all assets acquired and debts incurred throughout the duration of a marriage to be jointly owned. 

There are very few exceptions to this interpretation of community property. As a result, it will be presumed that your marital estate consists of jointly-owned property unless you successfully assert your right to have a specific asset, set of assets, or debt(s) to be treated as your property or your spouse’s property alone.  

Equitable division considerations

It is undeniably challenging to navigate the restrictive classifications of community property if a divorcing couple either has complex assets or a complex financial situation generally. However, couples can benefit from the fact that Texas is not a 50-50 community property state. It is an equitable division property state. 

In equal distribution states, the value of all assets and debts that are included as elements of a marital estate must be divided 50-50. By contrast, equitable distribution states permit couples to either agree on an alternative division (in non-contentious cases) or judges to order an alternative division (in contentious cases) provided that the outcome is fair to both parties. 

By carefully researching the nature of Texas’s approach to the equitable division of community property, you’ll be better positioned to ensure that you receive a truly fair share of your marital property. Regardless of whether your divorce process is amicable or contentious, understanding when marital assets may be removed from the marital estate and what the concept of “equitable” means in legal terms will help you to advocate for your needs and interests effectively. 

Protect Your Financial Investment In Your Marriage — Contact Us Today

To speak with us about your goals, or schedule a consultation, contact our law firm by phone at 281-369-8665 or remain online to communicate with us by email. We represent clients in Harris County and Montgomery County.