When TX Property Division Becomes Difficult

Overview

Texas is a community property state. This means that all assets and liabilities earned during the marriage start out as a 50-50 split when the parties get divorced. There are rules and circumstances wherein the division of assets becomes “equitable distribution” instead of equal distribution:

• Pre-marital property
• Property owned or claimed by one spouse prior to the marriage
• Property acquired by one spouse during the marriage by gift, devise or descent
• The recovery for personal injuries sustained by one spouse during the marriage, with the exception of any recovery for loss of earning capacity during the marriage

• Court’s discretion
• If one spouse makes a considerable amount more than the other spouse
• Alimony awards
• Fault

These are not the only things that can cloud a 50-50 split of the marital estate but are the most common. Recently, an on-going Baton Rouge, Louisiana, case hit the news because a businessman paid his first ex-wife a sum of money ($3 million). A settlement agreement was reached regarding property division in the divorce from the businessman’s second wife. Years later, when the businessman sold some of his stocks, the second wife came forward and stated that the businessman still owed her over $20 million because the stock that he recently sold was acquired during the marriage. The businessman states that the stock was acquired prior to the marriage to the second wife.

If, during the divorce from his second wife, the business was valued properly, the court should have awarded the second wife her percentage of the business worth at the time of filing of the divorce or at the time of the final judgment. Because the stocks may have been bought with marital funds, the second wife might have claim to some of the proceeds of the stocks.

Before getting divorced, contact a Houston divorce attorney. A divorce attorney can help determine what property may be pre-marital and not subject to settlement or a divorce order. He or she can also make sure that any marital property is equitably divided so that proceeds earned after the divorce are properly disbursed, whether to the person who was awarded the property that gained equity or via payment if the spouse is entitled to same.

Divorce property settlements can also be convoluted if property owned by the married couple is owned as a partnership with another person, couple or other entity. Property is usually sold and the proceeds divided if it cannot be divided any other way, but with a third party in ownership of the property, this can be difficult if the third party does not want to sell the property, nor has the funds to buy each spouse out.