What You Need to Know about Texas Property Division

In an Austin divorce process where parties are actually seeing eye-to-eye, asset division is simply a matter of splitting the assets right down the middle and moving on with life. In most divorces, however, the legalities and math of marital property are much more complicated. The divorcing partners often have differing views regarding the ownership and valuation of high-value, often complex assets. This is where an Austin property division lawyer can prove valuable.

If you need help bringing chaos out of your contested divorce case, feel free to reach out to the Austin Property Division Lawyers at Petrelli Previtera for a comprehensive initial consultation. Over the years, our Texas clients have benefited from our immense experience and expertise on matters complex asset division. You could be next.

Dividing Marital Property in Texas

Texas is one of nine states that implements community property law when resolving marital disputes. The other 41 are guided by what is commonly known as “equitable distribution” law.

Under this aforementioned provision, property acquired from the date of marriage belongs to the spouse who worked for it. That’s to mean that when the spouses decide to part ways, their assets will be shared in an equitable manner—barring any special circumstances and in accordance to several predefined factors.

In contrast, community property law is a bit more lenient and accommodating when it comes to asset division between divorcing partners. Under Texas Law, specifically, both partners get to walk away with a “just and right” allotment of the marital assets, regardless of their input in earning it.

When two consenting adults tie the knot in Texas, they’re essentially creating a “community.” As such, the law directs that each spouse receives at least one-half of the community estate. It’s worth noting, though, that the 50/50 blanket rule might not always come into play when splitting marital estate.

Types of Property Under Texas’ Community Property Laws

In Texas, not all shareable assets are truly “community property.” Specific assets earned from the date of marriage can be categorized as separate property, unless proven otherwise.

The following explicitly qualify as community property in the state of Texas:

  • Debts incurred during the union
  • Personal contributions made to 401K, welfare programs, and other retirement accounts from the date of the union
  • Any income earned from formal employment, including take-home pay and overtime
  • Balance of savings and checking accounts, regardless of whether the account in question is single or joint
  • Cars, furniture, jewelry, and other valuables acquired during the marriage
  • A real state or house acquired during the duration of the union
  • Compensation for lost wages

Separate property under Texas law typically includes:

  • Any and all debts incurred prior to the union
  • A car, house, jewelry, or any other asset owned by a spouse before the onset of the marriage
  • A spouse’s inheritance or a personal gift received from a third-party
  • Any property awarded to a spouse during a personal injury case, except for money designated for medical expenses and lost wages

However, for an asset to pass as separate property in a Texas divorce, a spouse must present irrefutable evidence before a judge showing the said property is theirs alone. If not, they’ll have no option but to leave the verdict to the judge’s digression.

At Petrelli Previtera, our Austin community property lawyers will help you evaluate whether or not it’s worth pursuing your separate property claim. If it is, we will do the hard work of tracking down the property that is truly yours and see to it that your separate property claim is adequately fulfilled. 

Questions Frequently Asked of our Austin Property Division Lawyers

How is Property Divided in Texas?

Property Division

Under Texas law, all assets that a couple acquires during marriage belong to both of them, and as such, the court must intervene at divorce. In other words, a couple’s joint marital property must be split up equally and without bias during divorce, unless, of course, there is a pre-written agreement (such as a prenuptial agreement) stating otherwise. (See Family Code Sec. 4.001.)

To establish the net value of the community estate, the court will subtract the debts incurred during the marriage from the community estate’s estimated value. In most instances, each spouse will receive exactly one-half of the net marital estate.

As an example, one partner might be awarded real estate investments and the family business while the other one gets to walk away with the family residence. What’s important is that each party gets assets that are similar in value.

Is It Possible for Community Property to Convert Into Separate Property?

Yes, although it’s something of a rarity. A common instance where community property turn into separate property is during transmutation. This often happens when one person acquires a house before they step into a legal union and keeps paying for it after tying the knot. The only other instance where community property can convert is if there was an error during the initial classification.

Are Wages Considered Community Property in Texas?

Yes, as long as you earned within the duration of your marriage. However, the wages you earned the week—or even the day—before you physically tied the knot are entirely yours and your partner isn’t in any way entitled to them. It’s also worth noting that community wages goes beyond tangible finances. It can include compensation you receive in rents, real estate, compensation you receive for services, as well as other modes of income.

Can I Claim Inheritance as Part of Community Property?

In Texas divorce, inheritance is classified as separate property. The only instance where you might have a chance to initiate a claim is if the will explicitly states that the asset in question belongs to the both of you. Otherwise, a separate property claim won’t suffice.

What Does the Process of Dividing Property Entail?

The process of dividing marital property in Texas happens in four distinct phases. First, each spouses individually accounts for all assets and debts under their name. Next, each item on the list is crossed off as either separate property or community property. From there, an appraiser takes over the reins to ensure each item is assigned its true value based on existing market prices. Finally, the actual figures and items are presented before court, and the judge proceeds to split the property as they deem best—usually in an impartial and fair manner.

We are Getting Divorced and Neither of Us Can Afford the House. What Next?

Your attorney will be able to talk with you in details about options for dividing assets such as the house. In a situation where neither party can afford the house we may look at selling the house and share the proceeds. Paying off the house after and during divorce will be incredibly difficult, especially if you’ll be doing so individually. As for the proceeds, a judge will split them based on how much of the equity in the home is community property.

Is Texas a 50/50 State When it Comes to Asset Division During Divorce?

Yes, but there’s a caveat to it. In an instance where your partner contributed to your property’s improvements or maintenance over the years, then there’s a chance that it could be commingled. Commingling is where separate property intermixes with jointly-owned marital assets, so much so that it’s difficult to draw a clear line between the two. When that happens, the judge might rule that the said property be split equally.

Austin Complex Property Division Attorneys You Can Count On

The decision to pursue divorce is a difficult one, especially when complex assets are involved. Petrelli Petrivella is committed to making the process as straightforward and painless as possible. Having racked up multiple awards in recent years, including being an Inc. 5000 honoree for three years in succession, our track record in solving complex divorce cases speaks is there for all to see. Once you reach out to us, we’ll exhaustively evaluate your situation and advise you of all your options under the law. Before you know it, you’ll have a custom-tailored solution that you can look back on with pride and satisfaction.

Our goal is just one: to adequately protect your legal rights while shielding you and your children from the emotional and physiological that are often synonymous with contested divorces. No divorce case is too complex for our high-caliber, award-winning Austin complex property division attorneys. We’ve got your back, because that’s our job.

Contact Our Austin Property Division Attorneys to Get Started on Your Case Today

Don’t wait. Time is of essence when your family’s future is hanging delicately by the balance. No matter what stage of the process you’re in, rest assured that our experience and expertise is all you need to reach a prompt, favorable resolution. Call the award-winning property division lawyers at Petrelli Previtera today at (215) 515-2219 or schedule an initial consultation online to kick-start your journey towards a future filled with optimism, hope, and happiness.