Last Updated on September 7, 2022 by Benson Varghese
Property Division in Divorce
Property division can complicate the divorce process. You may have heard that Texas is a “community property” state. Complications arise in determining whether or not the property owned by either one of the parties is actually community property. The goal of any property division is to make sure the parties’ community estate is divided in a fair and equitable manner. To that end, one must figure out what the community estate consists of. In most cases, a marital estate consists of a marital home that the husband and wife live in, as well as their retirement accounts.
Please take a moment to watch this informative video by family law attorney Turner Thornton who explains the difference between community and separate property in this video – and how it applies to equity in a pre-marital home in which both spouses paid down the mortgage.
Types of Property in Divorce
Separate property is property acquired before your marriage or given to you personally through gift, devise, or descent. Devise or descent is property you inherit from someone.
Community property is property acquired during the marriage. Income generated from separate property can actually be viewed as community property, and generally is viewed that way.
Very often, property is not clearly community property or separate property. Separate property is property owned prior to marriage by one of the spouses or gifted to one of the spouses or inherited by one of the spouses.
Dividing Mixed Property
Property that is purchased with a mixture of community money and separate money is considered mixed property. Dividing mixed property is a complicated process. For instance, if there’s a business one has to determine whether or not the business was established before the marriage or after the marriage, and even if the business was established after the marriage, from what funds was it created? Was it created from a separate property source or was it created from community income?
Oftentimes a marital business has to be evaluated to determine what the value of it is so that the community estate can be properly divided. That’s often done with the help of a forensic accountant. If there are multiple businesses as well as multiple parcels of real estate and other investment assets, the community estate will require a lot of assessment to determine the proper division.
Learn more about how a divorce can affect business owners.
If you are facing a divorce involving complex property division, call us at (817) 900-3220.