While there are many different issues that parties will face as part of the divorce process in Texas, they generally fall into one of three categories. Along with spousal maintenance and issues regarding minor children, property division is a key consideration. You might already know that Texas is a community property state, one of just a few jurisdictions in the US that follow this theory of law. However, unless you have an in-depth understanding of how the relevant laws apply to your specific situation, you put your rights at risk in the divorce process.
At The Ramos Law Group, PLLC, we’re dedicated to advocating on behalf of clients in every area of divorce, including property division. When you’ve worked hard to contribute to your marriage, family, and lifestyle, you deserve fairness when dividing the marital estate. If you’re contemplating divorce and want to know about your rights, please contact our office to set up a consultation with a property division lawyer in The Woodlands. You can also check out some general information about how the laws work.
Overview of Property Division Laws in Texas: In a community property jurisdiction, all assets acquired by either or both spouses are considered to be owned by them equally. Separate property includes assets that one individual owned before marriage, or assets that were gifted to or inherited by one spouse. To better understand the distinction, some examples may be helpful.
Community property may include any of the following if acquired during the marriage:
- The family home and other real estate, regardless of whose name is on the deed;
- Vehicles, furniture, and household items;
- Bank accounts, stocks, and other investment accounts;
- Wages earned by either spouse;
- Interest income from investments; and,
- Many others.
Separate property is anything a person owned before marriage, as well as:
- Gifts to him or her individually,
- Assets acquired by a will or inheritance;
- Any retirement or savings owned before the date of marriage.
The default rule is that all community property is split according to what is “just and right,” as the terms are used in the statute. This division may not result in an exactly equal split, as the court will make the distribution according to equitable principles. Separate property belongs to the respective spouse after divorce.
Note that debts are also categorized as community or separate in nature. Each person is responsible for debts they owed prior to getting married, and both are obligated for debts incurred during the marriage.
Challenges with Dividing Certain Assets: While some community property is clear-cut, there are unique complications with other types of property. Our attorneys at The Ramos Law Group, PLLC can advise you on two types of challenging assets:
- Business Ownership: Any company started during the marriage is considered community property, so it belongs to each spouse equally. Following typical property division rules isn’t easy, so parties are usually faced with one of the following options:
- One spouse buys out the other;
- Both parties continue the business as co-owners; or,
- The business is sold to a third party and the parties split the proceeds.
- Stocks: Initially, it may seem that selling the stocks and dividing the proceeds is simple. However, there are tax implications when selling. Plus, some stocks include provisions restricting their transfer or represent a future interest – i.e., a stock option. In such situations, the parties might consider splitting the stocks instead of the proceeds or have one pay the cash value to the other.
The Property Division Process in Divorce: Texas law encourages the parties to agree on property division, and the court is not likely to disturb it unless is extremely unfair to one person. Under the circumstances, the process is relatively simple. The parties negotiate division of community property, sign the agreement, and enter the document in court as a final divorce decree.
When the parties cannot agree on property division, the court will decide the matter ata final trial. During these proceedings, both parties present arguments, evidence, and testimony regarding how assets should be divided between them. At the conclusion, the judge applies the laws to the facts to make a determination on property division.
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Consult With A Property Division Attorney In The Woodlands
This overview may be useful in helping you understand the basic legal issues, but it’s important to get the details on how asset division laws in Texas apply to your specific case. Our lawyers at The Ramos Law Group, PLLC can answer your questions and explain what to expect after reviewing your unique circumstances, so please contact our office to set up a consultation with a member of our team.