There are nine states in the U.S. that are community property jurisdictions, and Texas is one of them. What does it mean that Texas is a community property state? How will this impact the outcome of your divorce?
The short story is that any property you or your spouse acquired during your marriage is considered community property in Texas, except for a few exceptions. This means that you both own the property equally, no matter whose income purchased it or whose name is on the title.
When you realize you’re getting divorced, your mind will quickly move to questions about things like who will get the house, who will get the car, and who will deal with all that credit card debt.
In this article, we’ll take a closer look at what it could mean for you to get divorced in a community property state.
Yes, Texas is a community property state. Community property is a legal concept that governs how property and assets acquired during a marriage are owned and divided in the event of a divorce or the death of one spouse.
In community property states like Texas, the general principle is that most property and debts acquired by either spouse during the marriage belong to both spouses equally, regardless of which spouse earned or acquired the property.
There are only nine states in the U.S. that are community property states. Here’s the full list:
There are three other states that have a community property law that can be “opted-in” to. In Alaska, South Dakota, and Tennessee, both parties can agree to a community property division. Community property laws also apply to registered domestic partners in three states– Washington, Nevada, and California.
So, what legal concept do the other states use to distribute property and debts in the case of a divorce? The other 41 states are what is known as common law states. This means that a number of different factors are taken into account when splitting things up, including things like:
Understanding community property under Texas law is essential if you’re getting a divorce. Once you have a grasp of what this concept might mean for you, you’ll be much better situated to anticipate the outcome.
Texas law deems that all earnings and property that were acquired during a marriage are considered community property. This means that both spouses own the property together, regardless of which spouse specifically acquired it or whose earnings paid for it.
So, basically, it doesn’t matter if your income paid for the car or your spouse’s income paid for the house. It doesn’t even matter whose name is on the account, title, or contract. If the property was bought during the marriage, it’s considered the property of both spouses equally.
There are three exceptions to this rule. Assets or property acquired during the marriage can be considered separate property if:
If you’re still feeling a bit unsure about what community property means, here are some examples to help make the concept clearer:
Of course, there’s a good chance that you own some stuff you acquired before you got married. This is where the concept of separate property comes into play.
When you get divorced, everything that was acquired during the marriage will be viewed as community property unless you can prove otherwise. The easiest way to do so is for your spouse to be willing to agree that the property belongs to you rather than the marital estate.
Separate property is property that was either obtained before the marriage began or came during the marriage through inheritance, as a gift, or as a part of a personal injury settlement.
Here are some examples of separate properties:
Another concept that’s worth understanding is that of reimbursement. Even if you bought a house or a car before you got married, and it’s considered separate property, it’s possible that your spouse could ask to be paid back if community funds were used to make payments.
For example, let’s say you own a house before your marriage and your spouse moves in with you after marriage. If you’re using the income that either you or your spouse earns to make the mortgage payments, you are technically using community property to make the payments. During the divorce, your spouse could ask for reimbursement since community funds were used to pay for your separate property.
It’s important to understand that your marital property is not necessarily going to be divided equally by the court. Though a 50/50 split can certainly happen, the court isn’t required to break your estate in half and give out assets in precisely equal ways.
Many factors must be considered as a part of this decision, including:
That being said, the simplest and least stressful way to get divorced is for you and your spouse to come to an agreement about how property and debts will be split up. Unless the agreement seems outrageously lopsided, the court will usually agree to a marital settlement agreement signed by both parties.
Another important point is that any property you are awarded will usually mean that you are responsible for any attached debt. For example, if you are given the house in a divorce, that means you’re on the hook for the mortgage. The same goes for a vehicle and its car payments.
There’s a good chance you and your spouse have some debts at the time of divorce, and these will need to be divided up, too.
For example, if you or your spouse have any of the following types of debt, it will need to be determined who will be responsible for making payments after the divorce:
Just like with property, courts don’t have to divide debts equally. The division, instead, must be “just and right” in a way that reflects the particular circumstances of each individual.
No matter which spouse created a debt or has their name on a title, both spouses are considered responsible for liabilities and debts in a marriage.
At the same time, courts can’t remove the name of one spouse from a title or contract even if they’ve given the property and associated debts to the other spouse. This means that in the eyes of the creditor, the other spouse is still on the hook for staying current with payments. This is true in the case of several different types of debts, including mortgages and credit card agreements.
Getting divorced is never easy, but you’ll be much better suited to the task if you have a firm grasp of how divorces work in Texas. Understanding that Texas is a community property state, for example, is key to being able to anticipate the property and debts you’ll be responsible for in your post-divorce life.
Are you searching for more resources to help you as you navigate your Texas divorce? Make sure you check out our Texas Divorce Laws blog for more information and articles.