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How to Protect Your Assets from Divorce in Texas

Sophia Merton
September 8, 2023

There are two primary concerns in most Lone Star divorces. The first has to do with children and child custody issues, while the other is related to how property is divided. If your marriage is breaking up, it's perfectly reasonable to wonder how to protect your assets from divorce in Texas.

The division of property is a bit different in Texas divorces than in other states. The reason for this is that Texas is a community property state, along with only twelve other U.S. states.

If you have a substantial estate and are motivated to protect your assets during the divorce process, you're probably going to want to work with an attorney rather than get a DIY divorce. Even if you don't have ill intent in your efforts to protect your property, acting without the advice of experienced legal counsel puts you at risk of appearing to hide assets.

Let's take a look at what you need to know about pursuing a fair division of property in a Texas divorce.

Texas as a Community Property State: Why It Matters

Most states in the United States are known as equitable distribution states, but Texas is not one of them. Along with twelve other U.S. states, Texas is considered a community property state.

What does this mean? How does this impact the division of assets in your divorce?

marital home in texas divorce protecting assets

The truth is, this is a very significant factor in how property is split up when two people are dissolving their marriage. While estates can get pretty complicated, the short story is that all of the property that you and your spouse own at the time you're getting divorced is assumed to be the property of both parties.

This can be very surprising to people in a day and age when it's increasingly common for spouses to maintain separate financial accounts and make purchases separate from one another. It doesn't matter if you used your income to pay for the home you live in with your spouse, for example-- in the eyes of the law, the home is marital property regardless.

Community Property: A Closer Look

All of the earnings and property of both people in a marriage in Texas that were acquired during the marriage are considered community property.

It doesn't matter at all whose name is on the title or account, whose income paid for an asset, or who took on responsibility for maintaining an asset. If the asset was acquired between your wedding day and the day of your divorce, it's considered community property, except for a few exceptions.

vehicle owned by one spouse in texas divorce asset trying to protect

What are those exceptions? An asset acquired during a marriage isn't necessarily considered community property if it was:

  • An inheritance
  • A gift
  • A personal injury settlement

Here are some examples of what might be considered community property in a Texas divorce:

  • Income from employment, including all salaries, wages, overtime, and tips
  • Vehicles that were bought during the marriage, even if only one spouse has their name on the title
  • Homes or other properties that were bought during the marriage, even if only one spouse has their name on the deed
  • The balance in your bank accounts, both checking and savings, regardless of whether it's a joint account or singly owned by one spouse
  • Payment for lost wages or unemployment compensation
  • Individual contributions to 401Ks, pensions, or other retirement accounts that were made after the marriage began

Separate Property: A Closer Look

The presumption in Texas is that any property acquired during a marriage is a part of the marital estate and, therefore, community property. However, spouses can agree (or, alternatively, one spouse can successfully prove) that a piece of property is the separate property of one spouse.

modern home owned by couple in texas divorce one spouse trying to protect assets

Separate property is:

  1. Property that one spouse owned before the marriage began or
  2. Property that one spouse acquired during the marriage through inheritance, as a gift, or as a part of a personal injury settlement

Here are some examples of what could constitute separate property in Texas:

  • A vehicle that one spouse was gifted by a family member
  • A home that was bought by one spouse before the beginning of the marriage
  • The inheritance one spouse received during the marriage
  • Jewelry that one spouse was given during the marriage by the other spouse
  • Retirement contributions that one spouse made to their own retirement account when they were single before the marriage
  • The personal injury settlement of one spouse acquired during the marriage

Reimbursement in a Texas Divorce

If you feel like you are in the clear because you bought your home or car before you got married and therefore they remain your separate property, you'll want to also know about the concept of reimbursement.

stack of US cash as assets in divorce one spouse working to protect

For example, let's say that you were using community funds during the marriage to pay for your mortgage or auto loan. In this circumstance, your spouse could ask for reimbursement. The idea is that marital funds were used to pay for separate property, and your spouse, therefore, has the right to ask to be repaid their share of what was spent from the community pot.

How to Protect Assets In a Texas Divorce

Some divorcing couples have little to no assets or debts and no children in the marriage. In these cases, spouses can save a lot of money during the divorce process by filing for a DIY divorce.

However, as soon as there are children involved or any amount of property or debts, it typically makes sense to involve an experienced divorce lawyer.

If you're concerned that you're going to lose your assets during a divorce, the first thing you'll want to do is find the right attorney. Though it might be tempting to try and move community assets around in order to protect them as a part of a divorce, this type of activity is not worth the risks.

For example, some people might try to lend assets to a friend if they smell a divorce coming on or otherwise disburse joint assets to try and keep them out of divorce proceedings. The reality is that there are severe penalties if you are caught hiding assets as a part of a divorce. If you think that your spouse is hiding assets, you'll want to talk to a lawyer about how they can be held accountable and whether you should have a temporary order filed to try and reduce the occurrence of this type of behavior.

The Good News About Property Division in a Texas Divorce

Even if your assets are technically considered community property, it isn't uncommon for one spouse to make the bulk of the money in a marriage or control most of the assets.

If this describes your situation, it's natural to be concerned that you're going to lose everything you've worked so hard for.

The good news is that this type of nightmare scenario isn't actually what happens in Texas divorces. The courts are motivated to create a fair outcome and are notably not eager to give a spouse a "free ride" in terms of practically unlimited spousal support or receiving the bulk of the assets. As an example, Texas is one of the most difficult states in the country for spouses to receive alimony.

The courts in Texas aren't trying to pick sides or punish one party by stripping them of their assets. The Texas Family Code is written in a way that attempts to create fair outcomes and prevent lopsided outcomes.

High Net Worth Divorces in Texas

Individuals with substantial estates are most certainly going to work with an attorney leading up to a divorce.

Once there is a considerable amount of money at play, things start to get a lot more complicated. Unless you are a divorce lawyer yourself, it is highly recommended to work with experienced attorneys who will look at your specific financial situation and come up with a plan that best serves your post-divorce goals.

Protecting Assets in a Texas Divorce: Final Thoughts

When you realize that you're getting a divorce in Texas, probably your first concern is who is going to get the kids (if you have them.) After that, you're next thought is most likely about what's going to happen to your assets.

Since Texas is a community property state and there are severe penalties for hiding assets during a divorce, the best thing you can do is to work with an experienced lawyer.

If you're interested in learning more about divorce in Texas, make sure you check out our Texas Divorce Laws blog!

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Written By:
Sophia Merton
Sophia received her BA from Vassar College. She is a researcher and writer that aims to help make the complexities of the legal system understandable to the layperson. Believing that people can be empowered by understanding their rights and responsibilities under the law, Sophia aims to offer accurate and well-researched information in straightforward and easy-to-digest legal articles.

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