Texas’ statutory law governing the division of property between divorcing spouses differs from the majority of states. Texas falls within a minority of jurisdictions that recognizes spouses’ assets as community property.
Going into a divorce, here are some important things that you should know about community property division.
What is community property?
Under the community property approach to splitting up property, both spouses have property rights to everything that either spouse acquired during the marriage. With some limited exceptions, both parties will have a shared interest in the assets that either party acquires.
What are examples of community property?
Almost any type of physical property or financial asset could constitute community property. Both spouses may have ownership rights to a home, vehicle, or other tangible assets. Intangible property such as pensions or 401(k) accounts would also belong to both spouses.
Stocks also fit within this description. If one spouse purchases a stock that appreciates in value dramatically, both spouses could reap the benefits of the investment.
Debt can also be community property. For the most part, courts treat financial obligations such as credit card debt or personal loans in the same manner as assets.
How do courts make divisions?
In some instances, it may be necessary to liquidate the value of certain types of property in order to divide it. For example, a divorcing couple may need to sell their home in order for each house to receive the value of their equity interest in it.
Although both spouses share community property, a court will not necessarily divide everything straight down the middle. Instead, they aim to divide things as fairly as possible.