Divorce Property Division in Texas
In the video, Rachel describes property division during a Texas divorce. It’s a complex topic as you’ll see when you watch the video. You should talk to an attorney for help in figuring out what’s community property, what’s separate property and what’s hybrid property. To make an appointment with Rachel, please call 832-271-4830. Rachel is an of counsel attorney with Wadler, Perches, Hundl and Kerlick, and she meets with clients in Fulshear, Richmond, Wharton and El Campo.
Summary of the Divorce Property Division Video
Attorney Rachel Rust is of counsel with the law firm of Wadler, Perches, Hundl & Kerlick with offices in Fulshear, Richmond, El Campo, and Wharton, Texas.
Next to child custody, probably the most often argued about area of family law is division of property. In Texas, we call marital property community property, which confuses a lot of people because they think of community as being their neighbors or their town, and yet in Texas community means the marriage.
Texas is referred to as a community property state. There are several other community property states, I think Washington State is one, Tennessee is one, but it basically provides that all of the stuff accumulated during a marriage belongs to the marriage, or the community.
There is not an absolute presumption that each side gets 50% of that, although in practical outcomes it’s often divided pretty much that way, depending on some other factors, income, ability to earn income, who’s got the kids, some other things. But the notion is that the marriage owns the stuff that was accumulated.
The Property Division into Community, Separate or Hybrid
What other kinds of property can there be besides community property? Well, there’s something called separate property, and separate property is anything that you owned before marriage, that was gifted to you during a marriage, or you inherited, whether you were married or not. So you start with the presumption that everything you’ve got at the time of divorce belongs to the community, and then you have to pull out those things which either you owned before marriage or that you inherited during the marriage.
The difficulty with that is that if you have a long marriage and you’re not a pack rat, then you may not have all of that paperwork to prove who owns what, and so you start with the presumption that everything you’ve got the date of divorce belongs to the marriage. So as a part of property division you’ve got to trace, that’s the term of art, the stuff that you want to claim shouldn’t be part of the marriage or community property.
If it was more recently acquired then you may have that paperwork, but if you’re looking for checks or records that are more than seven years old and your bank didn’t keep ’em or the stock was sold and a piece of land was purchased, then it may be more difficult. The notion of things belonging to the marriage is common to a lot of other states. Equitable distribution is what they refer to in Virginia, but there’s some differences.
The concept of community property assumes that stuff acquired during the marriage is community property regardless of whose name it’s titled in. I often hear people say, well that’s my car, or that’s my gun, or my collection.
My boat, my plane, my cows, or horses. Don’t get me started on the horses. But, those things that, even if they are titled into one party’s name, they still belong to ya’ll. Even if you kept separate bank accounts, they still belong to ya’ll. Your paycheck is my paycheck and my paycheck is your paycheck, so it belongs to us if we’re married regardless of whose name it’s in and regardless of who earned it.
That is not what people want to believe or what people think is the law, so sometimes convincing folks that it doesn’t matter, it doesn’t matter whose name it’s in, it is ya’lls.
Question: – Is that the presumption in property division, or is that, I mean, or is that something that’s rarely, rarely a disagreement between parties?
Oh, it’s often disagreed. I mean, people will, I will have a client telling me that they specifically kept their money separate because they thought it belonged to them, this was my paycheck, nothing else but my check went into this bank, it’s mine. You don’t have signatory rights, it’s mine. No it’s not, it’s ya’lls.
If you want to say that there’s any money in there, and it gets worse depending on which side you’re on. In Texas property division, income from separate property is also marital, so if I have a house, a rental house that I owned before I met you and before we got married and I have income from that rental house, even though it’s my separate property and there’s no question, I got the paper, the deed, I can prove that I owned that before we got married.
The income from that house is ours. And so sometimes the fight or the argument between people is a misconception of what the law is, because they don’t agree with the law, they don’t think it should be that way, but it is that way. The burden of proof is on the person who wants to prove that it is other than community property. So if I’m going to claim that I owned something before marriage then I’d better have a piece of paper that shows that. If I’m going to claim that my Great Aunt Louise died and left me $10,000 I’d better have something from her estate, or the check going in, or something happening.
Property Division – Hybrid Property
And then you get into problems with hybrid assets, things that are part and part. So I own a car and we get married and after we’re married I trade the car in and I get, I get $5,000 for my trade-in towards a $30,000 car. So 1/6 of that new car is my separate property.
Well, unless you bought an antique car or some specialty car that car is not going to increase in value, it’s not going to appreciate, and so now we’re gettin’ divorced and the $30,000 car may only be worth 15,000. My separate interest in that car is still a sixth, it’s not the 5,000, it’s a sixth of whatever the value is.
Conversely, that’s true, though, with something that does appreciate, so I’ve got a $10,000 CD before we get married, use it to put down on the house, and that’s a 10th of a $100,000 house, then I’ve got a 10th separate value of now what is a $200,000 house. And there are circumstances all the time where both parties had $10,000 and somebody put it down on the house and the other one paid for the honeymoon and they thought everything is square. The person who put it down on the house has a claim to an asset and the person who put it down on the honeymoon may own the pictures. But it’s not the same, and it doesn’t matter what you intended it to be, it’s what you did.
So, you know, helping people understand how a court is going to view their stuff may help people get to the table to mediate or to settle a case, but the first step is trying to agree on what our stuff is. So when I’m working with a couple a lot of times I ask them to make a list and see, can you agree? First, can you agree that this is your stuff, can you agree that he owned this or she owned it prior to marriage, or it was gifted to ’em, or their parents bought it for ’em, or whatever, and then what’s the ya’ll stuff together that there may be a separate component in.
Once you agree on what that pot is, the division of property is much easier. People still fight over the green couch or the blue vase, but you cut down on a lot of the arguments if you can use these rules to categorize your stuff, and then you know what you’re fighting about because that’s what the court has to do. The court has start property division by characterizing property and decide whether it’s a community asset, or a separate asset, or a part and part, or a hybrid asset.