Understanding Property Division in Texas Divorce Proceedings
Property division in a divorce proceeding can be a complex process. It's crucial to have a clear understanding of the types of property involved, how these are treated in a Texas divorce, and potential complications that may arise from the commingling of assets.
Types of Property in a Texas Divorce
In a Texas divorce, all property falls into two main categories:
- Community property, which usually includes assets and debts acquired by either spouse during the marriage.
- Separate property, which oftentimes refers to assets and debts that one spouse owned before the marriage or received as a gift or inheritance during the marriage.
In this video, Attorney Robert Epstein explains separate and community property in further detail. He also explains how community property can be divided during a divorce.
Clear & Convincing Evidence an Asset Is Separate Property
Texas is a community property state, but that does not necessarily mean that all community property is divided equally between the spouses. Sometimes, there are valid reasons for an unequal division. Separate property, however, remains with its original owner and cannot be divided, though it must be proved as separate property by clear and convincing evidence.
To prove that an asset is, in fact, separate property, you will need evidence, such as:
- Inheritance documents
- Gift receipts or letters
- Deeds
- Receipts
- Bank statements
- Sworn testimonies or affidavits
- Tax returns
Read our blog, “How Should I Prepare for Divorce?” for more details about the documents you should collect.
Factors the Court Considers When Dividing Community Property
If parties cannot agree on how to divide their community property, the court will make the final determination. Judges may consider several factors, including the following:
- The age difference between the parties
- Each party’s financial and physical health
- Each party’s separate assets and liabilities (debts)
- The nature of the property
- Each party’s income and earning capabilities
- The difference in each party’s earning capability
- Any allegations of domestic violence or wasteful dissipation of assets
- Any other factors deemed relevant
Dissipation of Marital Assets in Texas
Wasteful dissipation of assets is when one spouse irresponsibly spends, misuses, or hides marital property without the other's knowledge or consent. This behavior provides no meaningful advantage to the marriage and involves assets that would otherwise be divided in a divorce.
For instance, a spouse may dissipate marital assets if they have a gambling or addiction issue and use marital funds to cover their debts. In such a case, the court may order an unequal division of the remaining marital property to compensate the wronged spouse.
Commingling of Assets
A significant complication can arise when separate and community property get mixed together, known as 'commingling'. For example, if a spouse uses funds from their separate bank account (separate property) for the down payment on a house purchased during the marriage (community property), it becomes challenging to distinguish between the two.
In such cases, tracing might be required to determine the character of the property. A spouse may also try to argue that the commingling of the asset makes it subject to division. You should speak with an attorney if you are concerned about an asset’s distinction as separate or community property.
Consequences of Property Division
The short-term consequences of property division include immediate financial changes, such as changes in living arrangements and lifestyle adjustments. Long-term consequences could involve impacts on retirement planning, tax implications, and the potential need for continued financial interactions with your ex-spouse.
Experienced Divorce Attorneys Serving Dallas & Surrounding Communities
Epstein Family Law is equipped to help you fight to protect your hard-earned assets. We represent clients in both straightforward and complex property division cases as well as in cases involving:
- Business and stock ownership valuations
- Asset tracing
- High-asset divorces
Are you ready to discuss your property division and divorce case with our firm? Call (972) 232-7673.