Texas is one of nine community property states in the nation. What this means for you is that if you live and marry within its boundaries, the courts may automatically consider your assets as shared with your spouse.
According to Rocket Mortgage, community property laws exist to protect spousal rights by acknowledging that each spouse contributes to a relationship in different but equally valuable ways. To protect your rights if you go through a divorce, it is important that you understand these laws, as they will dictate the legal division of your property.
What is community property?
Community property is any property — including income, real estate, fine art, vehicles and other assets — that you or your spouse acquired during your marriage. Under community property laws, you and your spouse, as a married couple, jointly own these assets. This is the case regardless of who purchased an item or who earned the income to make the purchase possible.
For division of property purposes, the courts consider debt an asset. As such, it, too, becomes community property and subject to the state’s division laws.
How do the courts separate community property in a divorce?
When you divorce or separate in Texas, both you and your spouse will retain equal rights to all assets either of you purchased or acquired during your marriage. For assets such as bank accounts and debt, the courts can merely split the funds 50/50. However, for other assets that the courts cannot practically divide — such as a home, vehicle or piece of fine art — the courts may use a sort of “trade-off” system. For instance, if the courts award you the family home, they may award your spouse an asset of a value that is equal to half that of your house.
Is any property separate in community property states?
Though the law considers most property obtained during marriage as community property, some of your assets can remain exclusively yours if they meet certain criteria. In community property states, any real or personal property that belonged to one spouse prior to the date of the marriage is separate property. The same is true of assets that you may have received as a gift or inheritance during your union.
If you are going through a divorce or plan to in the coming months, it is crucial that you understand Texas property division laws. Your understanding can help you prepare financially for divorce and take steps to protect your rights to separate property.