When it comes to divorce and legal separations in the state of Texas, matters involving community and separate property are important issues during divorce proceedings.
Understanding the laws surrounding property ownership in Texas is a critical first step toward protecting your rights and assets. Below, you’ll find a brief summary of important differences between community and separate property and gain insight as to how these are regulated in Texas.
Community Property Defined
To begin, Texas is a community property state. Simply stated, this means all property acquired during marriage by either spouse is classified as community property and shared/jointly owned by the married couple. This includes money, real estate, personal property, and any other asset regardless of how the asset is titled. An asset claimed as a separate property will have to be proven by its claimant.
Defining Separate Property
A married person may acquire an asset claimed as separate property in the state of Texas only through exceptional circumstances, including:
- Property and assets acquired prior to marriage.
- Gifts made to only one spouse.
- Inherited property by one spouse.
- Monetary compensation in a personal injury claim for injuries sustained by one spouse —or as an exception, damages resulting from earnings loss.
In Texas, income from separate property is considered community. For example, owning a rental house prior to marriage and subsequently receiving rent payments during the course of the marriage are classified as community property.
Another example would be if one spouse owns a certificate of deposit before marriage; the interest accrued from the certificate of deposit during marriage is considered community property.
Owning shares of stock before marriage, however, is excluded as community property if it sees an increase in value. In these instances, the stock remains separate property.
Retirement and Pension Benefits
Many couples who find themselves in the midst of divorce or legal separation will often wonder how benefits and retirement will be impacted.
Money acquired by a spouse through pension, retirement plan, or other employee benefit is considered community property in Texas. As a result, these funds are subject to property division during a high-asset divorce or legal separation.
In a High-Asset Divorce, This is How Community Property is Divided
Couples seeking to divorce in Texas should understand the presumption that all assets at the time of divorce are community property. Spouses may move forward by drawing up an agreement stating how they wish to divide marital property.
If spouses aren’t able to come to an agreement, the court will determine community property division in a manner that is “just and right”. This means, in certain cases, the property will be split in half between the two spouses.
“Just and right,” however, will not necessarily mean equal division of community property. When unique circumstances arise, a judge may decide a different form of distribution that reflects fairness in his or her view.
Divorce and the division of property may often be complex. In cases involving high-net-worth individuals (HNWI), or those with greater assets to their name, it’s important to find an experienced and respected legal team to help you navigate the often challenging aspects of a high-asset divorce or legal separation.
Experienced Houston high-net-worth attorneys can help you discover and preserve your rights and assets during a high-asset divorce.
Protecting Your Assets and Your Future
Known for their reputation for relentless legal representation, the Law Offices of Douglas Ray York, P.C. offers personalized attention and does the heavy lifting when it comes to strengthening your high-asset divorce case.
By practicing your case in front of a mock courtroom, or relying on expert testimony from appraisers or other financial experts, our legal team pursues every avenue to build a strong case.
The first step toward securing a favorable outcome is finding the right attorney to represent you in court. If you find yourself in the midst of your marriage ending and need assistance moving forward, contact the Houston high-asset divorce lawyers of the Law Offices of Douglas Ray York, P. C. today.