Property Division: What You Need to Know
Many people fail to realize that depending on where you live, assets are divided differently in a divorce. A spouse may assume that property owned solely by one person will remain that person’s property upon divorce. This is often not the case, especially in a community property state, like Texas.
In a divorce proceeding, property division is decided by the court. A judge aims to divide all assets equally between divorcing spouses, but it is rarely a 50/50 split.
A property division attorney understands the heated nature of asset division during a divorce. We are here to guide you through the intricacies of the process.
Community Property States
Texas is just one of nine community property states. Besides Texas, the other community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Washington, and Wisconsin.
Unlike equitable distribution states, which strive for an even distribution of property, community property states consider any assets that were acquired during a couple’s marriage to be owned by both persons. In a community property state, a couple would also share equal responsibility for any debts acquired during their marriage.
In general, if the property was attained during the marriage, it is considered marital property. In addition to joint property, this would also include retirement accounts and pension plans. In order for the non-employee spouse to access the funds, such retirement accounts require a Qualified Domestic Relation Order (QDRO) to be issued by the court.
However, the property is considered to be separate property if:
- The property [was] owned or claimed by the spouse before marriage;
- The property [was] acquired by the spouse during marriage by gift, devise, or descent;
- The recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage.
To clarify what the statute means by “gift, devise, or descent”:
- A gift is a transfer of property without receiving anything in return;
- A devise would be an inheritance received in a will; and
- A descent is an inheritance that is received from a decedent who died without a will; it is decided by the state laws of intestacy.
Another example of separate property would be the property that was bought during the marriage using separate funds. It is important to save any statements or tax records when showing that you used a bank account in your name alone to purchase the property.
Ways to Protect Your Finances
Prior to tying the knot, a couple may decide to sign a premarital agreement, also known as a prenuptial agreement. A premarital agreement will state how property will be allocated between the two of you in the event of divorce.
Some couples sign this type of agreement when they are married. In this case, it is known as a marital property agreement. Couples are allowed to effectuate a marital property agreement anytime during their marital union.
Since the terms of a premarital agreement or marital property agreement are most likely decided when two people are on good terms with each other, both of you can ensure fairness on issues such as dividing assets or even child custody.
A Southlake Property Division Attorney Near You
Upon wedding, no one contemplates the idea of divorce down the road. However, life’s circumstances can change in an instant. Filing for a divorce may be the best option. Contact the legal team at Mims Ballew Hollingsworth⏐Family Law and allow us to handle your divorce case. Let us help you gain the financial security you deserve.