Dallas Asset Division Lawyers
Division of Property & Debt in Texas Divorce
One of the most contentious issues in divorces is often how shared assets are divided. After all, the resolution of this issue will often determine how easily you are able to move forward with your life. If you are deprived of your fair share of the marital estate, you could be left struggling financially for years to come as you try to rebuild your life and regain stability. Beyond the economic ramifications, you should also be able to enjoy the satisfaction of knowing that you have been able to keep what is rightfully yours.
Today's uncertain economic climate has seen many families in Dallas and around the country falling deeper and deeper into debt. Your divorce cannot be finalized until arrangements have been made and court orders are issued regarding who will be responsible for paying the debts that you and your spouse owe. Depending on the resolution of this issue, it is possible you could be ordered to pay not only your own debts but also those debts that were incurred by your spouse.
How Do Texas Courts Divide Assets in a Divorce?
When a couple gets married, Texas law presumes that all the property they collect doesn’t belong specifically to any one spouse. Instead, all property that a couple acquires during their marriage presumptively belongs to the marital community estate.
However, when the marital community comes to an end due to divorce, all property that belongs to the community estate is subject to a “just and right division” between the parties. Texas courts have held that a “just and right” division of community assets is not necessarily an equal, fifty-fifty split of the community estate. Instead, a court will look at certain factors that may warrant deviating from an equal division of property.
Courts may consider the following factors when dividing community assets:
- Each party’s capacities and abilities;
- What benefits a not-at-fault party would have enjoyed if the marriage continued
- Business opportunities
- The parties’ respective physical conditions
- Each party’s financial condition
- The age difference between the parties
- The size of each party’s separate estates
- The nature of the property in question
- The difference in the parties’ respective incomes and earning abilities
So what kind of property is subject to a just and right division upon divorce? Real estate, personal property, financial accounts, certain retirement plans and pensions, and specific employment benefits may be divided during divorce proceedings. However, any property or asset that qualifies as a party’s separate property will not be divided in a divorce case.
Community vs. Separate Property in Texas
Assets that either spouse acquired during the course of the marriage are legally the shared property of both parties, regardless of whose name is on the title. Anything classified as community property is subject to division. This can include assets such as the family home, retirement accounts you contributed to during marriage, and other personal possessions.
Anything that you owned prior to your marriage, on the other hand, will be categorized as separate property. Items of separate property, however, that have increased in value during the course of the marriage may be subject to division of the accrued value. This may be true of a business, for example. Furthermore, one spouse may have a partial claim to the separate property of the other spouse if he or she performed work or made investments to increase its value.
Division of Community Liabilities
Like marital assets, Texas law presumes that any debts and liabilities the married couple incurred while married are liabilities of the community estate. Both spouses are responsible for satisfying the debts of their marriage. Therefore, courts also divide marital debts between the spouses in a divorce.
As a corollary, any debt a spouse separately incurs does not expose the community estate to liability. However, there are some exceptions to the general rule regarding liability of a spouse’s separate estate for the acts of their former spouse.
A spouse’s separate property may be used to satisfy the following debts:
- Debts the other spouse incurred to obtain food, shelter, clothing, health care, or other necessaries of life
- Obligations the other spouse assumed while acting as an agent for their spouse
Thus, for example, if one of the parties incurred substantial debt for a necessary medical procedure at the hospital, a creditor may reach the separate property of the debtor’s spouse to satisfy outstanding obligations.
Liabilities can arise from a valid contract or a lawsuit alleging tortious conduct. For instance, getting a home loan and mortgage creates a contractual duty to repay principal and interest on the home loan for which the mortgagor is liable. Also, when a court finds you at fault for someone’s injuries due to a car accident, you are liable to pay them damages as compensation for causing their losses.
Liabilities that derived from contractual agreements are considered to be community liabilities if the parties were married at the time the obligation to pay arose. On the other hand, liabilities stemming from a person’s tortious conduct qualify as a community debt if the parties were married when the plaintiff’s right to recover damages from a party accrued.
Contact O’Neil Wysocki Today
If you and your spouse carry out an uncontested divorce, a Dallas asset division attorney from O’Neil Wysocki P.C. can help you to negotiate a settlement for the division of your assets and debts, such as sorting out child support responsibility. We frequently retain the services of certified public accountants, counselors, financial planners, and other professionals who can assist with matters of determining the value of the estate, sorting out records, and establishing who should be responsible for payment of certain debts. In the event that an out-of-court settlement is not possible, we can represent you in court proceedings.
To learn more about the laws applying to property division and find out what kind of disposition you might expect in your own case, contact O’Neil Wysocki P.C. to schedule a consultation - call (972) 852-8000.