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An Overview of How the Community Property System Operates in Texas Law

The Property Division Process in Divorce

The divorce procedure involves many different parts – there is the initial petition, child custody issues, child support, alimony (or ‘spousal maintenance’), and so forth. One of the most challenging aspects of the divorce process is property division. The property division process involves distributing the marital assets (i.e. the assets classified as ‘marital property’ as opposed to separate property) between the parties. Property division is challenging for multiple reasons. One reason is because classifying property is not always a straightforward matter. Although Texas has several general principles which facilitate property classification, there are plenty of “edge cases” which can make classification difficult. Furthermore, valuation is another reason why property division can often be challenging. Many assets – houses, automobiles, jewelry, etc. – can be difficult to value, and sometimes experts are needed to testify regarding valuation. And, in some cases, experts can have conflicting opinions regarding the valuation of a particular asset, and this can make things even more complex.

All states throughout our nation have a preexisting legal framework with which they handle the property division process. This legal framework may be thought of as a ‘starting point’ which guides the court as it proceeds to distribute the marital assets. There are two frameworks – “community property” and “equitable distribution.” The State of Texas is a community property state. Perhaps the central pillar of the community property system is the principle of equal distribution.

Presumption of Equal Distribution

In Texas’ community property system, there is a standing presumption that all marital property should be distributed equally between the parties in divorce. The word “equally” in this context is significant, and it quite literally means equal in a 50% / 50% fashion. When a Texas court distributes a given set of marital assets, the court presumes that things should be divided 50% / 50% between the two former spouses, regardless of the size or complexity of the marital estate. This is the standing presumption, but this doesn’t mean that Texas courts will always divide the marital assets in this manner. Depending on the circumstances, the court may see sufficient reason to overcome this presumption and distribute the marital assets unevenly. To overcome the standing presumption in favor of equality, Texas courts need to see quite a bit of evidence. There must be evidence which clearly indicates that an uneven distribution is justified. Consider the following example: prior to divorce, an unfaithful spouse lavishes expensive gifts on his or her cheating partner using marital funds. In a situation such as this one, a Texas court may very likely order an unequal distribution of marital assets to ensure fairness.

Rules on Separate Property vs. Marital Property

Texas’ community property system also comes with its own set of rules regarding separate property and marital property. When a marital estate is distributed between the parties in divorce, only marital property is subject to division. Separate property will remain the sole property of the original owner, even in divorce. Given that this is the case, the classification of property as either separate or marital is clearly a matter of high importance. Texas law lays out a few general rules when it comes to classifying property as separate or marital: all property acquired during marriage is marital property, except property which is (a) acquired as a gift, (b) acquired through inheritance, or (c) is part of a personal injury settlement. Property acquired prior to marriage is considered separate property. Texas law also has rules which apply to more difficult edge cases; for instance, what happens when a piece of property is acquired prior to marriage, but then appreciates in value during the marriage? Or, what happens when a piece of property is acquired in another jurisdiction outside the state territory of Texas? Again, Texas has rules on these cases as well and, in the future, we may come back and address these types of cases specifically.

As you can tell, handling the property division aspect of divorce can frequently require a lot of effort. This is where having a skilled family law attorney can be immensely valuable.

Contact Goldsberry, Portz & Lutterbie, PLLC for More Information

If you would like more information about community property, property division, or another related family law matter, reach out to one of the attorneys at Goldsberry, Portz & Lutterbie, PLLC today by calling 281-485-3500.

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