Division of Marital Estate
Aside from the determination child-related issues, the primary focus of divorce litigation is the identification and valuation of community property and the pursuit of a “just and right” division of the community estate.
Community Property and Separate Property
Texas is a community property state, meaning that unless proven otherwise, courts consider all property acquired by either party during the marriage as “community property,” subject to division upon divorce. “Separate property” is identified generally as property acquired by a party prior to marriage or as a gift, inheritance, or a certain type of recovery from a personal injury claim.
Determining the characterization of property can become the source of great contention during a divorce. In more complicated scenarios, an expert may be engaged to “trace” community and separate property interests. Tracing is a valuable tool when, for example, parties are seeking to determine whether and what portion of increases from certain categories of premarital investments, or what portion of money in accounts funded with both types of property will be considered community property.
Valuing Community Property
In some cases, in the absence of agreement otherwise, determination of what value to attach to community assets may require professional valuation services (for example, valuation of businesses and business interests and/or valuation of real property and even certain personal property items). To that end, if divorce is imminent, it is advisable to begin developing an inventory of all known assets (community and separate) and identifying all known debt held by either or both parties.
Dividing the Community Estate
The underlying principle in the division of a community estate is that the division of the estate be a “just and right” division, “having due regard for the rights of each party and any children of the marriage.” What is considered a “just and right” division is largely determined by the circumstances of each case. A 50/50 division is not always the “just and right” result. Courts will consider a variety of circumstances in determining what constitute a “just and right” division of the community estate, including, but not limited to, the following:
- Fault in the breakup of the marriage, fraud or wasting of estate assets by one spouse
- Age and health of the spouses
- Education and employment of the spouses
- Business and employment opportunities of the spouses
- Relative income and ability to earn income and financial condition of the spouses
- Need for future support
- Length of marriage
- Nature of property to be divided and tax consequences of division
Experienced Spring/Woodlands Texas Property Division Attorney
How property is valued, and whether it is determined to be community or separate property, can have a tremendous impact on the financial outcome of a divorce. Spring/Woodlands attorney Lisa Bruce represents clients in Montgomery County, Harris County and the surrounding areas of Texas in divorce-related property division matters. She has extensive experience guiding clients through the process of identification, valuation and division of assets and debts.
If you have questions about Texas property division, we invite you to contact our law office to learn more.