Is Texas a Community Property State?

Is Texas a Community Property State?

“Community property” refers to things belonging to the marital union, so to speak. Community property is practically anything a married couple acquires from the date of their union through the divorce decree.

There are some exceptions to what is considered “community property;” for example, a lawsuit settlement or inheritance in one spouse’s name might remain that person’s separate property – but not always.

In the event of a divorce in a community property state, dividing assets can be more complex. You need a skilled Fort Worth family law attorney on your side to protect your property rights.

What Is Community Property?

When a couple is going through a divorce and dividing up their assets, it is important to understand how the courts will determine how the estate will be divided between the two divorcing parties. The property that you and your spouse own will be considered either separate property or community property. The term community property refers to the assets that you and your spouse gained while you were married. Separate property usually refers to the property that you owned as an individual before you entered the marriage.

Texas Marital Property Laws

Texas is indeed a community property state, as outlined in Section 3.0 of the Texas Family Code. The state defines community property as: “the property, other than separate property, acquired by either spouse during marriage.” In other states, married couples have separate property (his car/her car, his laptop/her laptop) and can also acquire property jointly (deed to the house in both names, retirement account in both names).

Joint accounts and property are easily delineated by law as being owned 50/50, which makes dividing them pretty straightforward. By contrast, in a community property state, “his car” is legally their car, even if her name is not on the title. Likewise, “her car” is also their car, and so on, with all property obtained while married. Because of this, community property is not always split 50/50, but rather, an “equitable” division is sought. Section 7.0 of the Texas Family Code specifies that community property be split based on what a judge determines to be “just and right.”

Texas law also operates under the presumption that all property obtained during the marriage is community. It is each person’s individual responsibility to prove otherwise. Maybe your car was purchased right before the wedding. Maybe a car you purchased during the marriage was purchased with your personal injury award to replace the car that the drunk driver totaled. Maybe a car you obtained during marriage was actually gifted to you in your dad’s will. Regardless, the court assumes your car is community property unless you prove otherwise.

What are the Exceptions to Community Property in Texas?

Texas is a community property state, which means that the assets and property that you and your spouse have acquired during your marriage is owned equally by both spouses. This will impact the way that your estate is divided during your divorce. That said, there are some exceptions to community property in Texas. Some exceptions could include:

Property that both you and your spouse agree is separate property, even if it was acquired during the marriage.
Gifts that you received during the marriage, if the gift giver meant for you alone (and not your spouse) to receive the gift.
Property that was purchased with separate funds during the marriage, although this is a bit tricky as determining separate funds might be a challenge.
Inheritance that you received in a trust or a deceased person’s will can also be considered separate property, even if it was received during your marriage.

Determining what is separate or community property can be a complicated process, especially if the divorcing spouses are not in agreement and are unable to cooperate. Working with an experienced property division attorney in Fort Worth, Texas is advisable and can help to strengthen your claim during the divorce process. There are often factors that an attorney can help to point out that might have otherwise been overlooked.

Prenuptial and Postmarital Agreements

These types of property agreements are particularly useful in community property states. In fact, a couple can pretty much bypass all of Texas’ community property restrictions by stipulating that anything they acquire during marriage will remain separate unless owned jointly, or any other property terms.

If you’re already married and did not sign a prenuptial agreement before the wedding, you can still create a similar postmarital document outlining all the same things. Discuss this possibility with our divorce attorneys.

How Does A Community Property State Affect My Family?

During a divorce, one of the most stressful considerations is how the division of assets will impact your family and your children, especially if there are conflicts around determining what should be considered community versus separate property.

One of the largest community assets that is reviewed during a divorce will be the primary residence – the family home. If there are children involved, it is common for the spouse who has primary child custody to retain the family home in order to maintain stability after the divorce. This is not always the case, though.

When Does Separate Property Become Community property in Texas?

If you owned a house or other property before you entered a marriage, you might assume that this remains separate property and would be treated that way if you decided to get a divorce. This is not always the case. Separate property can become community property if assets are combined. For example, the amount of money you have in your individual bank account may become community property when combined with a shared account with your spouse.

Dividing Community Property

So what will a Texas judge be looking for in determining what is “just and right” in dividing community property? Here are some things the judge examines:

• The health of both spouses
• Tax consequences
• Being at fault in the divorce
• Purposely draining marital assets (i.e., gambling away the kids’ college fund)
• The education of both spouses
• How the property was acquired
• The earning power and/or employability of both spouses
• Who is the primary custodian of the children

Let’s look at an example to better understand how these issues play out in real scenarios. Imagine a husband opening a business during the marriage. It’s in his name, and he runs it on his own. If the wife was at home raising their children during the marriage, a judge would probably give the wife roughly half as she helped make the business possible by staying home to raise the kids.

If the husband was at fault for the divorce, a judge might award the wife more than half of the business despite her being completely uninvolved with it. Yet again, if the wife was at fault for the divorce, they had no children, and she had a job, she would likely not be entitled to much, if any, of “his” business.

Reaching a Property Division Settlement

The State of Texas always encourages couples, whenever possible, to reach their own agreement when it comes to dividing community property, child custody, and so on. Very few couples actually allow the divorce court judge to determine if she’ll walk away with his family heirloom or if he’ll keep her wedding ring.

Please note that couples who are both represented by divorce attorneys are actually able to agree on settlement terms more often and to agree to more equitable splits. Sometimes, people think hiring a lawyer will “make things ugly.” This couldn’t be further from the truth—having a lawyer helps everyone stay more level-headed, fight the right fights, and allows for a cushion between you and your ex. If you don’t have a lawyer, you’ll have to communicate directly with your ex throughout the process and negotiate with him or her on your own.

If you don’t feel you’ll be able to reach an agreement with your ex, don’t panic; there are still options. Many couples use alternative dispute resolution, which includes mediation and arbitration. Mediation is far more common than arbitration with divorces. Mediation is where a specially-trained, objective third party helps a couple reach an agreement.

Mediation might be conducted in one long session or broken up into a few different shorter sessions. Sometimes, you’ll go through mediation alone (without your lawyer present), and other times, lawyers are allowed to attend. If mediation doesn’t work, no harm, no foul. You can always try arbitration, which does result in a binding, enforceable decision being made by a mediator/officiant.

Talk to a Fort Worth Divorce Lawyer Now!

The experienced, compassionate Fort Worth, TX, divorce attorneys at Mims Ballew Hollingsworth are eager to help you navigate the community property laws in our state. Our Fort Worth office is located at 301 Commerce St #2040, Fort Worth, TX, 76102. To learn your personal options when it comes to dividing community property in a divorce, please book a legal consultation by using our online contact form so we may assist you.

Fort Worth, TX Divorce & Family Lawyers

Constance Mims has over fifteen years of experience practicing exclusively family law. Mrs. Mims is Board Certified in Family Law, by the Texas Board of Legal Specialization. She is Collaborative Law certified and is a shrewd negotiator, not to mention her experience in the most challenging child custody, child support, spousal maintenance, alimony, prenuptial agreements, and divorce issues, both in court and in the appellate arena.

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