Divorce Law: What Is A Community Property State?
Untangling your finances and dividing property is one of the most challenging aspects of the divorce process. If you get divorced in Texas, your assets and liabilities will be divided under the state’s community property standard. Texas is one of a minority of U.S. jurisdictions that uses a community property standard instead of an equitable distribution standard. In this article, our Houston property division lawyers explain the key things to know about community property laws, including the differences between community property states and equitable distribution states.
Texas is One of Nine Community Property States
Texas is a community property state (Texas Family Code § 3.002). There are eight other community property states, including Louisiana, New Mexico, and California. The remaining states are equitable property jurisdictions.
Community Property: All Assets Obtained During the Marriage are Jointly Owned
The most important thing to understand about community property is that the standard holds that all assets obtained by each spouse during the course of their marriage are considered to be jointly owned. In other words, spouses in a community property state—including in Texas—have 50-50 ownership over the property and assets received during the marriage.
In community property states, there is a strong presumption of a 50/50 split of the marital property. In some jurisdictions, such as California, a 50/50 split is virtually guaranteed by law. In Texas, the system works a little bit differently. It is possible for a Texas judge to award an unequal split of community property if deemed “just and fair.”
Note: There is a narrow exception for gifts. Certain gifts obtained during the marriage—potentially including inheritance—can remain separate property if the proper steps are taken.
Pre-Marital Property is Separate Property (Unless Commingled)
In community property states like Texas, each spouse’s pre-marital property is presumed to be a separate asset. In effect, this means that each spouse has a right to retain full ownership over the separate property in the event of a divorce. However, pre-marital property can become marital property in Texas.
If assets are commingled, they can lose their designation as separate property. As an example, imagine that one spouse enters a marriage with $25,000 in cash in a bank account. They decide to deposit that money into a joint checking account. Ten years later, the couple files for divorce. A court would almost certainly rule that the $25,000 in pre-marital cash is not community property on the count of it being commingled.
Start of Marriage Does Not Matter: Texas Divorces are Subject to Community Property
For the purposes of property division in a divorce, your state of marriage is irrelevant. If you file for divorce in Southeast Texas, then your property and debts will be handled under the Texas community property laws.
Contact Our Houston, TX Property Division Attorney Today
At Lindamood & Robinson, P.C., our Houston property division lawyers are knowledgeable and future-focused advocates for clients. If you have any questions about the Texas community property laws, we can help. To set up a completely private initial consultation with a Texas divorce lawyer, please contact us today. From our Houston office, we handle property division issues throughout the area, including in Harris County, Galveston County, Liberty County, and Fort Bend County.