In Texas, Community Property is property acquired by either spouse during the marriage, which is considered jointly owned. In Texas, community property is a fundamental concept in divorce law that governs the division of marital assets and debts between spouses.
Legal Definition of Community Property in Texas
Community property in Texas refers to assets and debts acquired by either spouse during the course of the marriage, with certain exceptions. According to Texas law, community property includes the following.
Income and Earnings
Salaries, wages, bonuses, commissions, and other forms of compensation earned by either spouse during the marriage are considered community property, regardless of which spouse earned the income or the source of the income.
Assets Acquired During Marriage
Property acquired by either spouse during the marriage, including real estate, personal property, investments, retirement accounts, and business interests, is generally classified as community property.
Debts Incurred During Marriage
Debts accumulated by either spouse during the marriage, such as mortgages, credit card debts, loans, and other financial obligations, are typically considered community debts and may be subject to division during divorce proceedings.
Relevant Law: Tex. Fam. Code § 3.002.
Separate Property in Texas
Certain assets and liabilities may be classified as separate property in Texas, meaning they are individually owned and not subject to division in divorce.
Property Acquired Before Marriage
Assets owned by either spouse before the marriage or acquired by gift or inheritance during the marriage are generally considered separate property and may remain with the individual spouse upon divorce.
Assets Designated as Separate Property
Assets that are specifically designated as separate property through a written agreement, such as a prenuptial or postnuptial agreement, may be treated as separate property and excluded from the community property estate.
Personal Injury Awards
Compensation received by either spouse as a result of a personal injury settlement or judgment is typically considered separate property, with some exceptions for damages related to loss of earning capacity during the marriage.
Division of Community Property in Texas Divorce
In Texas, community property is subject to equitable division upon divorce, which does not necessarily mean a 50/50 split, but rather a division that is fair and just under the circumstances.
Texas family courts consider various factors to determine a fair and equitable distribution of community property, including the following.
Contribution to the Marriage
Courts may consider each spouse’s contributions to the acquisition, preservation, or appreciation of community property during the marriage, including financial contributions, homemaking duties, and childcare responsibilities.
Future Financial Needs
Courts take into account each spouse’s financial needs, earning capacity, health, age, and other relevant factors when dividing community property to ensure that both parties can maintain a reasonable standard of living post-divorce.
Child Custody and Support Obligations
Courts may consider the needs of any children from the marriage, including custody arrangements, child support obligations, and the financial resources required to provide for the children’s well-being.
Fault in the Marriage
While Texas is a “no-fault” divorce state, meaning that fault is generally not considered when granting a divorce, egregious behavior or marital misconduct by one spouse may be taken into account by the court when determining the division of community property.