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A primer on Texas marital property division

One of the most difficult parts of any divorce is the division of property. It can evoke anger and animosity between the parties if one feels that he or she is getting the “short end” of the proverbial stick. It is important for people to understand the basic principles of how Texas laws handle property division and how the average Texas family court judge interprets those guidelines. Having this knowledge can make the process much easier, hopefully leading to a less contentious divorce and a quicker resolution.

The law (and its limitations)

Texas laws governing the division of marital property are found in Title I, Subtitle C, Chapter 7 of the Texas Family Code. Texas is one of only a handful of “community property” states remaining. This means that, essentially, all property (and debts) belonging to either spouse during the marriage is considered part of the marital estate.

There are several exceptions, including property the parties (or debts) owned prior to the marriage, proceeds of a personal injury lawsuit (aimed at compensating an injured victim for his or her injuries, not any portion of the lawsuit earmarked for lost wages or loss of companionship/consortium), as well as inheritances and gifts received specifically by only one spouse during the marriage, and others.

Separate property might be a bit trickier to determine, and the burden is on the spouse claiming an asset or holding as separate property to prove that it should be treated as such. It is important to note that even some items that would otherwise be considered separate property can become part of the marital estate.

For example, if one spouse owned a business prior to the marriage, that business is considered separate property. However, the income that the business made during the marriage could be considered marital property. Another example would be the appreciation of a stock portfolio, retirement account or collectible; the property itself will still belong to the one who owned it prior to the marriage, but the value gained during the marriage might be divided between the parties in a divorce.

Complex assets require special assistance

Some assets, like the couple’s savings or checking accounts, are easy to value. Simply call the bank or print up a statement, and it is clear how much those accounts are worth. Physical property like vehicles, boats, artwork and furnishings are similarly fairly easy to value. However, it can be much more difficult to ascertain the true worth of homes, family-owned businesses, items with sentimental value, retirement accounts, qualified domestic relations orders (QDROs), and professional practices.

If your marital estate involves property like that listed above, the division of marital debts and assets could be much more difficult. It will likely be necessary to work not only with a skilled Texas family law attorney to divide those assets, but also to engage the assistance of financial experts trained to understand how to place a market value on abstract property.