Common Issues with Dividing Community Property in Divorce

Dealing with Issues that Come Up in Dividing Community Property

The State of Texas is a community property state when it comes to dividing property in a divorce. In the easiest of situations, this means that property will be divided equally.

However, like so many things in a divorce case, nothing is ever easy. Certain issues arise when it comes to dividing property, as well as designating which property is considered separate property.

The following describes how to work through these issues when it comes to determining which asset and debt goes to each spouse.

What Is Separate Property?

Normally, people associate separate property as property the spouse had before the parties were married, and while this assumption is normally correct, other circumstances do exist.

The Texas Family Code defines separate property as being one of the following:

  • The property was owned by the spouse before marriage;
  • The property was acquired by the spouse during the marriage by gift;
  • The property was acquired via inheritance;
  • The property involves money awarded for personal injuries sustained by the spouse during the marriage, with the exception of loss of earning capacity.

Other than the property mentioned above, any other property involved is considered community property to be divided equitably between the parties.

What Is Community Property?

It can be easy for the spouse who earns the majority of the parties’ income and has the large 401(k) to argue that since he or she earned that money in the retirement account, it should rightfully be his or hers.

However, Texas Family Code defines community property as any property that is not otherwise designated as separate property. This determination includes any property that is acquired by either spouse during the marriage.

If one spouse wishes to argue that a certain item of property is separate property, it is up to that spouse to prove the item is separate. Otherwise, Texas courts operate under the assumption that an item of property is community property. This presumption applies to any property acquired during the marriage, whether it be a large financial account to a piece of furniture in the home.

Common Issues Determining Between the Two Types

It would seem as if the different types of property are pretty obvious, but that is not always the case. In fact, arguing whether something is a separate or community item of property is highly fact specific and requires submission of evidence to support each spouse’s claim on the property.

One way is to look at the date the property was acquired. If the one spouse can definitely show that it was, in fact, acquired before marriage, proving the item as separate can be relatively simple. If something was acquired just before the parties was married, it is important to get the precise date on when it was purchased, who made the purchase, and who holds the title, if there is one.

Tracing is another method to show whether an item of property is separate. This method looks at the item, if it was purchased before marriage, and whether it can be maintained as separate throughout the marriage.

If the asset is a financial account, did those funds remain completely separate during the time they were married? In addition, if the spouse sold this separate piece of property and is now arguing that the funds from the sale are still separate, tracing will help determine whether that money was ever commingled with marital assets after the item was sold.

The more the property is manipulated and mixed in with other items of property, the harder it can be to prove that the asset remained “separate.” Record-keeping can be key in convincing a judge that an item is separate property. If a separate piece of property is put into a jointly-held bank account, it can be extremely difficult to show that those funds are still “separate” in nature.

In addition, when it comes to items, such as 401(k) accounts, one spouse’s income is going towards this asset and the other’s is not. However, if one spouse stayed at home to take care of the residence and raise the parties’ minor children and did not earn an income so that the account holder could put money into this 401(k) with his or her income, it can be shown that the non-wage-earner spouse has a say in this account even though it may not be in his or her name. A family law attorney can assist in proving this fact, if it is in question during property division.

Contact A Divorce Lawyer Today

To discuss how property will be divided in your divorce, please contact family lawyers at Scott M. Brown and Associates. You can reach us by calling (979) 318-3075 or completing our online form. We have offices in Angleton, League City/ Clearlake, and Pearland.

Share this Post!
Texas Family Law Attorney

Call Us Today!

(979) 652-5246