Community & Separate Property Are Important When Dividing Assets
In divorce, one of the most difficult issues for spouses to deal with is property division. No longer is the 50-50 split of assets considered the best option for all couples. Texas acknowledges equitable distribution, a method of property division that considers the projected financial situation of each spouse following divorce.
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Community Property vs. Separate Property
In property division cases, it is necessary to differentiate between community property and separate property.
- Community property is property that spouses own together. Because spouses are considered as one unit, not separate entities, any property acquired and any money earned during the marriage is considered community property. A retirement account accumulated during marriage, for example, is considered community property.
- Separate property is property that spouses owned individually before marriage, property acquired through inheritance or gifts and property acquired after the date of divorce.
Separate property is off-limits to division. The amount of separate property owned by each spouse, however, can influence the division of community property.
In Texas, property and debt division is focused on the equitable distribution of community property. Rather than simply awarding each spouse 50 percent of the community estate, a series of questions will be asked to ensure a fair and equitable division.
Spouses are encouraged to resolve property division issues among themselves. If you and your spouse are unable to reach an agreement about how best to divide your community property, the state will call upon the court to intervene. When determining the division of community property, the court must consider a variety of factors regarding each spouse, including:
- Education level
- Work experience
- Earning capacity
- General health
- Waste of the estate
- Special needs of children
- Amount of separate property owned