Texas is one of nine states that is known as a community property jurisdiction. In general, this means that any property acquired by a couple during their marriage (with a few exceptions) is equally owned by both spouses. This can have a profound effect on the dissolution of property during divorce proceedings.
Community property and debt are divided in a divorce. Separate property and debt are not divided. At the end of your divorce case, a judge will divide your property and debt by signing a Final Decree of Divorce. The Final Decree of Divorce will contain the following items:
- A list of the community property each spouse will keep, or in some cases sell, along a statement of how the proceeds should be split;
- A list of the separate property (if any) of each spouse;
- A list of the debts each spouse is ordered to pay,
- An order that the community property retirement benefits of each spouse are either and;
- An award (given) 100% to the spouse who earned the benefits or divided between the spouses.
Keep in mind the Final Decree of Divorce divides your property and debt; however, you may need to take additional steps after the divorce to transfer vehicle titles or real estate deeds.
Community property includes all property you and your spouse possess at the time of divorce except property that a spouse can prove (or the spouses agree) is the separate property of one spouse. Your community property may consist of real estate (a house or land), a business, cars, money, retirement accounts, furniture, and other things acquired or purchased by either spouse during your marriage. It does not matter which spouse’s earnings were used to purchase the property or which spouse’s name is on the title.
Additionally, Community Debt is any debt you or your spouse obtained during the marriage. The law states that community property and debt should be divided when you get divorced in a way that is “just and right.” This does not necessarily mean 50/50.
Furthermore, Separate property includes the following:
- Property owned or claimed by one spouse before the marriage;
- Property received as a gift or inheritance to one spouse during the marriage;
- Money received by one spouse for personal injuries that occurred during the marriage (not including money received for lost wages or medical expenses) and;
- Stock dividends and capital gains on the separate property investments of one spouse.
Unless both spouses agree, a spouse must prove that something is separate property by “clear and convincing evidence.” If a spouse cannot prove something is separate property, it is determined to be community property.
Separate debt is debt one spouse received before the marriage. The law states that separate property cannot be divided. Once something is proved to be separate property the judge must confirm it as the separate property of that spouse.
Can One Spouse be Reimbursed for Improvements to the other Spouse’s Separate Property?
If money earned during the marriage is spent to improve the separate property of one spouse, the other spouse might be able to argue that he or she should get credit for a portion of the money spent. Consult with a lawyer if this is an issue in your divorce.
The judge will usually approve your agreement if you and your spouse agree on how to split your property and debt. Be sure to complete a Final Decree of Divorce form to reflect your agreement. Communicate to a lawyer if you need further assistance or have questions.
What if My Spouse And I Cannot Agree on How to Divide Property and Debt?
If you and your spouse cannot agree on how to split your property and debt, a judge will divide your community property and debt in a way that the judge decides is “just and right.” This typically means 50/50, but not necessarily in every situation.
Moreover, you also need to consider how divorce affects the spouse’s debts. A creditor’s right to collect a debt is not affected by your Final Decree of Divorce. So if the judge orders your spouse to pay a debt that is in both your names (such as a car loan or mortgage) but your spouse does not complete the payment, the creditor can still seek payment from you. Speak to an attorney in regards to protecting yourself in this situation.
Once a couple decides to divorce, one of the biggest issues that arise is the property and how it should be distributed equally to both parties. Therefore, if you and your spouse possess any property together it is important to involve an attorney to ensure the property is justly divided after the divorce.
What is Real Property?
Essentially, real property is land and anything permanently attached to it, such as a house or other buildings. Real property includes mineral interests. Real property does not include mobile homes. The “legal description” is used to officially identify the real property. Your Final Decree of Divorce must include the complete legal description of your property. If it does not, your Final Decree of Divorce will not be sufficient to pass title to the property.
The legal description is not the physical address of your property. The legal description may define the property by its lot number, block, and subdivision. Or it may describe the property in metes-and-bounds. The legal description may also include a volume and page number, film code number, or county clerk file number. It may also describe the property in metes-and-bounds. The legal description may also include a volume and page number, film code number, or county clerk file number.
Can Retirement Benefits Be Divided?
Generally, yes retirement benefits earned by either spouse during the marriage are considered to be community property that can be divided by the court. This applies even if you or your spouse have not yet retired.
Retirement benefits are typically a couple’s most valuable asset. Retirement benefits include pensions, military retirement, 401(k) accounts, 403(b) accounts, employee stock ownership plans, profit sharing plans, thrift plans, Keogh plans, stock option plans, individual retirement accounts (IRAs), annuities, and variable annuity life insurance.
If you need the judge to divide retirement benefits as part of your divorce, you must include specific information about the retirement benefits in your Final Decree of Divorce. You must also request the judge to sign an additional form, usually called a Qualified Domestic Relations Order or (QDRO) (unless you are dividing an IRA). You may want to have the QDRO prepared before you attend court, so the judge can sign it when you complete your divorce.
After the judge signs the QDRO, send a certified copy to the retirement plan administrator. The retirement benefits will not be divided until the plan administrator receives a certified copy of the QDRO that was signed by the judge.
When Do I Need To Contact A Lawyer?
If you reside in Texas and are going through a divorce. It may be helpful to seek out a local Texas divorce attorney, especially if you have property issues.