With few exceptions, every divorce in Texas will require a division of property. This article provides a quick overview of the general rules that govern property division in a Texas divorce as well as some of the key issues.
Community Property vs. Separate Property
Texas is a community property state. This means that, absent a marital property agreement, all property acquired during marriage is community property.
In fact, there is a presumption that all property in the possession of either spouse at the time of divorce is community property. If one spouse wishes to claim a particular piece of property as separate property, then that spouse has the burden of establishing its character as separate property.
So what is Separate Property?
Separate property is property that meets any of three characteristics: (1) it is property owned by the spouse before marriage; (2) it is property acquired by the spouse during marriage by gift, devise, or descent, or (3) it is a monetary recovery for personal injuries sustained by the spouse during marriage.
Just and Right Standard
Under the Texas Family Code, a judge is required to order a division of the community estate of the spouses in a manner that the court deems “just and right” with due regard for the rights of each party and any children of the marriage.
What is “just and right” can vary significantly and will be based upon the specific facts of each marriage. There are also a variety of factors a court will consider when deciding what constitutes a “just and right” division.
What Property is Subject to Division?
Only community property may be divided between the spouses or awarded to one spouse in a final decree of divorce. A divorce court does not have jurisdiction or authority to award the separate property of one spouse to the other spouse.
However, as you will see below, the judge may consider the existence of a spouse’s separate property and the value of the property in making a “just and right” division of the property.
Factors Affecting a Just and Right Division of Property
There is no limit to the factors a court can consider in arriving at what constitutes a “just and right” division of the community estate. However, there are a number of common factors a court will consider that I have listed below:
- Fault in the breakup of the marriage.
- The relative education of the spouses.
- The employment, earning capacity, and business skills of the spouses.
- The age and physical conditions of the spouses.
- The financial obligations of the spouses.
- The existence and value of the separate estates of the spouses, including any expected inheritances.
- Whether the nature of a particular piece of property might benefit one spouse over the other.
- Whether a spouse wasted community assets.
- Whether a spouse provided temporary support.
- Whether there were any excessive gifts by one spouse to the children or another person.
- Needs of any adult children residing with either spouse.
- The tax consequences of any property division.
- Whether either spouse committed fraud on the community estate.
- Which spouse will have primary custody of any minor children.
- The behavior of the spouses during the divorce proceedings.
- Whether either spouse’s separate property was a source of income creating the community estate.
- The existence of any reimbursement claims.
What are reimbursement claims?
To understand a reimbursement claim, you must first understand that there are three estates in any divorce proceeding.
The first is the community estate consisting of all community property. The second and third estates are each spouse’s separate property estate.
It is not uncommon during a marriage, for one of the estates to provide funds that are used to benefit or improve another estate.
For example, one spouse might sell his or her separate property residence after the marriage and use those funds as a down payment on a new marital residence.
Another common example is that the spouses may spend their community income during the marriage to make improvements to a residence or other property that one spouse owned prior to the marriage.
At the time of divorce, the contributing estate may have a claim to recover those funds or some portion of those funds against the estate that received the benefit of those funds. This is called a reimbursement claim.
Key Issues When Dividing Property in a Texas Divorce
In any case, there are four key issues when it comes to dividing property in a divorce case:
- Identifying the property.
- Characterizing the property as community property or separate property.
- Locating the property (things sometimes disappear while the case is pending).
- And last, valuing the property.