For many couples, dividing the estate is not all that difficult. Some couples agree to a division early in the divorce process. Some couples decide that most of their property divides naturally along who has been responsible for the asset, and they decide that each party will get their own assets and debts. For others, though, property division can be a complex task. Larger estates, debt-ridden estates, and estates that accumulated during a long marriage are often harder to divide.
The first thing that you have to understand is how Texas views marital property. We are a community property state, which means that any asset acquired during the marriage is presumed to be community property, meaning that the property is equally yours and your spouse’s. You each own the same 100% share of community property.
A marital estate can consist of the following estates:
- The community property estate,
- The husband’s separate property estate, and
- The wife’s separate property estate.
If you owned property prior to the marriage, that property is considered to be your separate property. It belongs 100% to you only, and a divorce court does not have the authority to divest you of your separate property. Property that you inherited during the marriage and property you received during the marriage as a gift is also your separate property. These are exceptions to community property that the legislature has carved out.
If there is a dispute as to whether property is community or separate, the party claiming that property is separate has the burden of proving the separate nature of the property by clear and convincing evidence. We need to provide documents (or other evidence) that show when and how the property was acquired.
In a divorce, either the parties or the court have to come up with a way to divide the community estate in a manner that is fair and equitable. Since community property is 100% owned by each of you, if all else is equal, a 50/50 division is fair. However, most times not everything is equal. There are a number of factors that the court can take into account in determining a fair and equitable division of the community estate. These factors include:
- disparity of the earning capacity of the spouses
- who gets custody of the minor children of the marriage
- the respective ages and health of the spouses
- fault in the break up of the marriage
- benefits the innocent spouse may have derived from the continuation of the marriage
- size of separate property estates
- financial responsibility for adult children of the marriage
- foreign property outside the court’s jurisdiction.
There are a number of other factors that are discussed in the case law; this is just a sampling of the factors I see most often. Usually, a finding that a factor exists only nudges the property division off the 50/50 mark by a couple of points. Rarely do courts order a property division that is greater than 60/40.
The first step to a property division is preparing the Inventory & Appraisement (which we call an I&A), a document that lists everything you own and everything you owe and a value for each asset or debt. Once you have filled out that document and provided us with the back up documentation, we drop the data to a spreadsheet, so that we can get a picture of the estate and start working on a logical division of the community estate.
If an estate is complex, we may choose to retain a financial professional to assist with valuing the assets of the estate, tracing separate property, and assisting with understanding the tax consequences of the estate division.
Whether you have a simple estate or a complex estate, we have the knowledge and the resources to assist you in the division of your estate during your divorce.