The Texas Family Code provides that in a divorce case, the court should make a “just and right” division of the community estate. This means that the court is not required, nor even presumed, to make an equal (“50/50”) division of Community Property. Instead, the court is charged with making a division which the court deems to be fair. Before we look at the factors that the court uses to determine how to divide Community Property, it is important that we get clear on what is, and what is not, Community Property.
Community property is all property acquired by either or both spouses during the marriage, except for items acquired by gift or inheritance. This is true regardless of whose name property is acquired in, and also, regardless of which spouse pays for the property. Your non-community property items are your “Separate Property,” and the court cannot take those items away from you.
While the definitions of Community property and Separate Property may seem clear and straight-forward, sometimes property rights in a particular case become complicated when, e.g., there are transfers of property between spouses, or when funds earned during a marriage are used to pay for the debt on Separate Property (like when one spouse owns a home prior to marriage, and makes mortgage payments on that house during the marriage). Also, there are presumptions which apply to property rights. Accordingly, it is usually a good idea to discuss your Texas marital property with an experienced Texas Family Law Attorney.
Now that we know what property the court can divide (the Community Property), it is time to see how the court decides how to divide the property.
Texas law provides the following as some of the factors for a court to consider when dividing Community Property:
- Fault in The Break-up of the Marriage: If the court decides that one spouse is primarily responsible for the failure of the marriage, then the court may decide that the innocent spouse should receive more of the Community Property;
- Benefits The Innocent Spouse Would Have Received by Continuation of the Marriage: One spouse may lose more from the break-up of the marriage than the other one will, such as loss of health insurance coverage, club memberships, networking or business opportunities. The court may consider those losses, particularly if that spouse is also the innocent spouse.
- Disparity of Earning Capacities: This is related to the loss of benefits often suffered by one spouse in a divorce. The court can consider how the loss of the other spouse’s income will likely affect a spouse.
- The Length of the Marriage: If the spouses have built a life together over a considerable time span, then the court can consider the loss of the marriage to be more costly—the innocent spouse may be required to walk away from a well-established life and start a new one.
- The Relative Health of the Spouses: If one spouse is walking away from a sick or injured spouse, then the court may consider the loss to be larger and more impactful for the unhealthy spouse.
- The Size of the Separate Estates: If one spouse has a much larger Separate Estate then the other one has, then the court may decide that more Community Property should awarded to the spouse having less Separate Property.
- The Right to Reimbursement: Claims for reimbursement are factors that can be considered in dividing the community property. The approach involves the financial interrelationship between the separate estates and the community estate. Reimbursement rights can be complicated, and so, should be discussed with an experienced Texas Family Lawyer.
- Tax Considerations: Tax liabilities, or tax losses, on property can be considered by the court when awarding that property in a divorce.
- Improper Use/Waste of Community Assets: If one spouse intentionally reduces the value of Community property (perhaps, out of spite), or gives property to a paramour, then the court can alter the award to take that waste into consideration.
- Attorney’s Fees & Costs of Litigation: If the divorce cost more than it should have, due to the actions of one spouse, then the court can consider that fact when making its division.
Those are some of the factors which a court may consider when dividing the Community Estate. Case law provides others that may, also, apply to your individual case. We would be glad to discuss your situation with you.
Also, we welcome any questions that you may have about the award of marital property in a Texas divorce.