Asset and Property Division
Texas is one of the few community property States in the U.S. Community property states essentially that follows “common law” by establishing all property acquired during a marriage is presumed by law to be jointly owned unless disproven by clear and convincing evidence. As one would imagine, asset and property division is one of the most common disputes in a contested divorce. If both spouses are unable to agree on division, then the court will divide marital property as reflected by the Texas Family Code.
Without a pre-marital agreement, asset and property division can be a nightmare during divorce. It’s not uncommon for divorcing couples to go to trial solely due to disagreements on property and asset division. Some spouses may even go to desperate means to hide their assets by “loaning” it to a friend, physically hiding the asset, moving money through multiple bank transactions, and other illegal methods. To learn more about asset and property division under Texas law, read the article below for further information.
Property Division Lawyer, Houston TX | Horak Law
One of the most highly contentious points of a divorce is often how assets/property will be divided post-dissolution. Consulting with an experienced family law attorney such as Matthew Horak of Horak Law is highly recommended so you have a full understanding of your rights as it pertains to the division of property/assets. To speak to a qualified Houston property and asset division attorney today, call Horak Law now.
You can reach Horak Law by calling our offices at (713) 225-8000 or by simply submitting an online contact form. Horak Law has two locations in both Houston and The Woodlands, but we accept clients throughout the State including Galveston County, Harris County, Liberty County, Fort Bend County, Waller County, Montgomery County, and Brazoria County.
- Separate Property vs. Communal Property
- Division of Separate and Communal Property
- Property Subject to Division
- Additional Resources
Separate Property vs. Communal Property in Texas
The State of Texas divides property upon dissolution based on certain rules outlined under the Family Code Section 7.001. The Code states the court has total jurisdiction over the matter and shall order a division of property in a manner that deems just and right to the court. The court will have due regard for the rights of each property as well as the children while deliberating on asset/property division.
The State of Texas recognizes two types of property when deliberating asset division. These classifications are known as separate and community property. Texas Family Code Section 3.001 defined separate property as anything that consists of:
- Property acquired by the spouse during marriage by gift, descent, or devise
- Property owned or claimed by the spouse prior to the marriage
- Any recovery award or settlement from a personal injury suit that was sustained by the spouse during their marriage. However, there is an exception for any recovery that includes the loss of earning capacity.
Generally, each spouse is permitted to keep their separate property and it’s not subject to division. Community property, on the other hand, is divided when the marriage ends. Under the Texas Family Code Section 3.003, community property is defined as any property possessed by either spouse during or upon the dissolution of marriage. That includes:
- Property acquired by either spouse in exchange for real or personal property that would be classified as community property if the spouse who acquired it so exchanged had been domiciled in this State at the time of its acquisition
- Property acquired by either spouse while domiciled in another State that would have been classified as community property if the spouse who acquired it had been domiciled in the State of Texas at the time of its acquisition
Division of Separate and Communal Property in Texas
If a married couple makes the decision to end their marriage, then any separate property owned by either spouse will be given to the spouse who owned it initially. If there is a question as to whether an asset is separate or communal property, the Texas Family Code Section 3.003(b) states clear and convincing evidence must be presented to prove the claim.
Any community property is subject to division in a “just and right manner,” which in most cases is a pretty close 50/50 split between spouses. When deliberating the division of community property, the court will also consider various factors including:
- Any minor children shared by the couple
- The duration of the marriage
- The health of each spouse
- Any income disparity between spouses
- The educational background of each spouse
- Business opportunities for each spouse
- Size of the estate
- Reason for the termination of the marriage
- Anything that could affect one spouse’s ability to work
What is considered “just and right” under the Texas Family Code is dependent on several factors which include, but are not limited to:
- Faults that may have broken up the marriage
- Benefits an innocent spouse may have received if the marriage had not dissolved
- Income and education disparity
Property Subject to Division in Texas
Some couples are surprised at what is considered separate and community property once they initiate the dissolution process. Listed below are various types of asset and property that could be subject to division based on the Texas Family Code’s community property laws.
- Separate property inheritances
- Military pensions
- Royalties and dividends
- Professional partnerships and practices
- Investment properties
- Any closely held corporations by the couple
- Asset protection trusts and other devices
- Business ownership rights
- Motor vehicles
- International assets
- Offshore investments and assets
- Bonds, stocks, securities, and investments
- Ranches, farms, and livestock
- Residential, commercial, and vacation property
- Commercial real estate
- Retirement accounts such as 401ks, IRA, and pensions
- Bank accounts
- Any other asset or property subject to division
Division of Marital Property | Family Code – Visit the official website for Texas’s Family Code to learn more about the State’s laws in regard to division and disposition of separate and community property. Access the site to learn more about the elements of separate and community property, division in regard to insurance, and the promotion of amicable settlements for divorce disputes by the State.
Community Property Law | Handbook of Texas – Visit the official website for the Handbook of Texas to learn more about community property laws and the definitions surrounding it. Access the site to learn other various family law definitions, their various publications, and other valuable information.
Houston Lawyer for Asset and Property Division
If you are in the throes of a divorce, contact Matt Horak at Horak Law. With years of experience, skills, resources, and an extensive network–he is fully equipped to take on your case and work towards an favorable outcome. Schedule your first appointment today by calling our office at (713) 225-8000 or simply submitting a online contact form. Horak Law has offices in both The Woodlands and Houston, but we accept clients throughout the greater Texas area including Brazoria County, Harris County, Montgomery County, Fort Bend County, Waller County, Galveston County, Liberty County, amongst others.