When Texas couples are going through a divorce, many challenging emotional issues come up that can crowd out more practical concerns. The added worry over what assets they may lose, such as the family home or the car, can be stressful. But knowing how the court will treat property division can help inform the financial decisions each party must make once the divorce is final.
In Wise County and throughout Texas, every divorce first goes through mediation, which can result in a shorter and much less expensive process than a court proceeding. Depending on the relationship dynamic, both sides may be able to agree on how to split property and debt. But where there are complex financial holdings such as a family business or significant financial assets, it will be crucial to get property valuations and experienced legal help to protect your interests.
Community property laws in Texas
Most states follow the theory of equitable division in divorce, in which the court looks at various factors in deciding on a fair but not necessarily equal division of marital assets. Texas, however, follows community property laws that will divide shared property equally in a divorce.
But what is community property? It is anything that either spouse acquired during the marriage, as opposed to separate property that either spouse owned or claimed before the wedding or acquired as a gift or inheritance during the marriage.
In classifying community or separate property, there is a presumption that all assets are community property unless either party proves otherwise through a schedule recorded in the county deed records, or if both parties agree on what is separate. Community property includes:
- Real estate
- The family business and its interest
- Purchased goods
- Retirement accounts
- Debt such as a mortgage, car loan, or credit card debt
Exceptions to community property laws
The courts will make exemptions to community property laws under certain circumstances such as:
- If one spouse purchased community property while living permanently in another state.
- If one spouse acquired community property in exchange for other property.
In such cases, the division of this property will be equitable. Spouses may modify and limit the application of community property laws with a valid pre- or postnuptial agreement.