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The ins and outs of property division in a Texas divorce

If you're married and considering a divorce, you are likely giving some thought to which property and assets will remain with you and which will go to your spouse.

That's a good question. Texas is a "community property" state which means that any property, assets or debts that you had before you were married are yours while any that were gained or shared during the marriage will be split in the most equitable fashion possible.

How to determine what is 'community property'

In a divorce, it is very important to determine what belonged to each spouse before the marriage and what was added during the marriage. After the marriage, everything that was added is community property with very few exceptions such as inheritances or birthday gifts that were kept separate.

For example, if one spouse inherits $10,000 during the marriage and puts it into a bank under one name and never uses the money, that would stay separate. If the spouse deposits the $10,000 into a joint checking account, then it would become community property. If one spouse inherits a summer home, rents it out and puts the income into a retirement fund, it would remain separate. If the spouse brings the family to enjoy the home and the couple improves the property with joint funds, it becomes community property.

A judge will divide property, assets and debts in an equitable - not equal - manner that considers factors such as:

  • The needs of the children
  • Each spouse's earning capacity
  • Each spouse's employment prospects
  • The value of each property
  • Any incident of fraud or waste

What about pensions and employee benefits?

When looking at pensions, profit sharing plans, retirement savings or any other employee benefits, each spouse can retain what portion they brought into the marriage. Whatever was added after the marriage will be split.

Pensions can be difficult to split because the true value won't be known until the exact retirement date. However, the pension fund administrator can issue an estimate and the judge can issue a qualified domestic relations order (QDRO) which orders the pension administrator to issue checks to the ex-spouse as well as the employee. However, in lieu of waiting for the pension to mature, many spouses will opt to take a greater share of the divorce proceedings and forego their portion of the pension.

There are many other items that need examination during a divorce, such as how to split up one spouse's business or professional practice or how to handle a military divorce. For these issues and others, it's best to have the advice of a qualified, experienced attorney to help guide you.

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