Preparing for Property Division in a Texas Divorce

Property Division Tips from TOP San Antonio, Fort Worth, & Southlake Divorce attorneys

Preparing for Property Division in a Texas Divorce

Dividing property and debts in a Texas divorce depends on several factors. At the very least, you need to identify all the property owned by either spouse and property owned by both spouses, characterize each identifiable property and agree to the value of each property.

Each party can develop an inventory that identifies all the property that they know about and assign a value to each property listed. Developing a composite inventory from both parties’ inventories becomes helpful in identifying value differences later.

Before dividing property, the characterization of the property must be ascertained as community property to be divided or separate property to be confirmed to the separate property-owning spouse.

Separate property is property owned before the marriage or property acquired during the marriage by gift bequeath or device. If the spouses do not agree on which property is separate property, then separate property must be proven by clear and convincing evidence.

In the inventory, listing the characterization of each property is helpful in identifying separate property that must be proven by clear and convincing evidence later.

Debts

Debts associated with secured transactions typically will follow the property that secured by the debt. The loan on a house or car will usually be assigned to the party acquiring the house or car. Secured debt that incumbers both parties can be ordered refinanced so that the spouse not assigned the property will not be left owing on the property assigned to the other spouse.

Other debt, like credit card debt, can be assigned to a spouse in a just and right manner just like assets that are not incumbered by debt.

IT IS NOTABLE, that no matter how debt is assigned in a final decree of divorce in Texas, the decree is not enforceable against the debtor. Therefore, even if a debt is assigned against one spouse, if the original debt is in both spouse’s names, then the debtor may seek payment relief against both spouses.

Separate Property Problems

Separate property is property owned before the marriage or property acquired during the marriage by gift bequeath or device. If the spouses do not agree on which property is separate property, then separate property must be proven by clear and convincing evidence.

But sometimes separate property is hard to identify.

For example, money received by one spouse during the marriage that pays for damages to their body. This is separate property by device, even though that money can be accompanied by payments for lost wages during the marriage which is community property.

Converting separate property from one kind of property to another kind of property will not change the character of the property. Oil Royalties from separate property owned before the marriage is a conversion of property from land to money and keeps its character. But delay rentals is not a conversion of property, but an income from ownership and therefore would be community property if acquired during the marriage.

Stock splits or increases in stock price generally do not change the character of separate or community because the increase in the property is due to the nature of the property itself. However, a dividend on a stock is income and would be community if earned during the marriage.

Separate property can lose its character if it is mixed with community property to the extent that the separate property cannot be identified by clear and convincing evidence. Separate property that has been mixed with community property, as with bank accounts or stock trading accounts, can be Traced by an expert to prove the separate property portions if necessary.

Mediation and Property Division

Mediation presents a unique solution to separate property. In mediation, the character of the evidence does not matter. The spouses may agree to any division of property. A Court has not discretion to divide separate property and must assign the separate property to a spouse if it is proven by clear and convincing evidence.

Court Division of Property

A court shall divide the community property in a just and right manner. This is not a 50/50 split of the property. The Value of the property and debt is only one factor the court considers in dividing the community property. Other factors are;

  1. The length of the marriage;
  2. The age, health, education, and earning capacity of each spouse;
  3. The contributions of each spouse to the acquisition, preservation, or enhancement of the community property;
  4. The fault or misconduct of either spouse in causing the breakup of the marriage;
  5. The needs of the children and the custodial parent;
  6. The tax consequences of the property division; and
  7. Any other relevant factors

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