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How Do Texas Courts Divide Assets in a Divorce?

Division of Community Assets

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.

An asset is considered to be a party’s separate property if they acquired it either before getting married, after getting divorced, or while they were married by way of gift or inheritance.

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.

Call O’Neil Wysocki P.C. to Get Started on Your New Future

Dividing assets and liabilities upon divorce can be a challenging issue to litigate for anyone who doesn’t have experience and an adequate understanding of Texas domestic relations law. That is why you should consult a dedicated lawyer from O’Neil Wysocki P.C. We have years of experience working on various family law matters in Texas, including property division issues in divorce cases. Our legal team will work tenaciously toward resolving your legal dispute in a way that safeguards your legal interests.

For a consultation about the merits of your case, call us at (972) 852-8000 or complete our online request formtoday.