Division of Community Property in Texas
by Houston divorce lawyer John K. Grubb
Attorney at Law
4600 Post Oak Place, Suite 301
Houston, Texas 77027
Property is categorized either as community property or separate property when a Texas court tries a divorce case.
A spouse’s separate property consists of:
- The property owned or claimed by the spouse before marriage;
- The property acquired by the spouse during marriage, by gift, devise, or descent and,
- The recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during the marriage.
The significance of separate property is that a Texas court cannot divest a spouse of their separate property. Therefore, once a court determines that a particular piece of property is separate property, then it must set that property aside to the separate property owner. The burden is upon a spouse to prove that property is his or her separate property by clear and convincing evidence.
Community property consists of all property, other than separate property acquired by either spouse during marriage. Property possessed by either spouse during the dissolution of the marriage is presumed to be community property, unless the spouse can prove that it is their separate property by clear and convincing evidence. Community property consists of almost anything of value, such as real property, personal property, stocks, bonds, savings accounts, automobiles, retirement benefits, 401(k) accounts, IRA accounts, stock options, copyright royalties, patents, income, rental income, life insurance and virtually anything else of value.
Texas Community Property Division
Once the court determines that property is community property, the court must divide the property. In dividing community property, the Texas court is obligated to order a division of the estate of the parties in a manner the court deems “just and right”, having due regard for the rights of each party and any children of the marriage. In dividing the community estate of the parties, the court typically takes into account one or more of the following factors:
- Fault in the breakup of the marriage
- Health of the parties
- Education of the parties
- The present earnings of the parties
- The earning capacity of the parties in the future
- The party raising the minor children of the marriage
- The specific nature of the property
- Any separate property that a spouse may have
- Any inheritance that a spouse is likely to receive
- Tax issues in connection with property
- Any fraud that one spouse has committed against the community or the other spouse
- The debts of the parties
As a practical matter, if the court has two people before it, with the same educational background, earning the same income, and having the same opportunities in the future, and no children, the court will divide the estate of the parties 50/50. As more facts favor one individual, then the court has a tendency to award that individual a greater percentage of the community property. For example, if the wife is clearly at fault in causing the marriage to break up, is young, and in good health, is earning substantial income, has an MBA, and expects to inherit a lot of money from her family, and the husband has only a high school diploma, suffers from deteriorating help, has a low paying job, and is taking care of the parties three children, then the husband could expect to receive a substantially greater portion of the community property than the wife. Property awards up to 90%, in very unusual circumstances, have been upheld by the appellate courts in Texas.
Many clients want to approach a divorce settlement insisting that they get 60%, 70%, or 75% of the community property because they believe that the other party was at fault in the breakup of the marriage. Such an approach can make it very difficult to settle a case without trial. Usually the other spouse does not believe that he or she was at fault in the breakup of the marriage, or even if they were, they believe they were justified in engaging in the conduct because of the complaining parties approach to the marriage. The courts frequently do not place the same degree of emphasis upon one particular issue as the clients frequently do. For example, while one party may clearly be at fault in the breakup of the marriage, the court will be weighing that issue against the issues of present earning ability, future earning ability, educational background of the parties, etc. The courts frequently have a different perception of the value of the community estate whichcan substantially affect the court’s division of community property. For example, if the party who claims that the other one is at fault, believes that the equity in the house is worth $30,000.00, and is demanding 70% division from the court (or $21,000.00), the court may very well find that the equity in the house is only $10,000.00, and award the party not at fault only 60% of that equity ($6,000.00).
Of course, the vast majority of cases do not go to trial. While evaluating any settlement, the parties should take into account all of the factors that the court will consider when settling a case and that there are other factors having a significant bearing on the settlement. For example, if one party particularly wants the house, they should probably be willing to accept a lower percentage of the community estate in a settlement in order to make certain they get the house. There is absolutely no guarantee that the court will award a person the house. The court may very well decide that it would be better to sell the house, or award the house to the other spouse.
A Texas court has great discretion in how it divides the community property of the parties, since a judge can take into account so many different factors in dividing the community estate. The appellate courts very rarely will reverse a trial judge on the basis that the trial judge was guilty of “abusive discretion.” Knowing that there is very little possibility that a party can appeal a trial court’s division of the estate of the parties, is another factor that has to be taken into account in making a decision on whether to settle the case or not.
If you are looking for options and solutions for the division of community property, contact the Houston divorce attorneys at our firm today for a consultation. Our Houston family lawyer is here to help you.