Will I Lose My House in My Texas Divorce?

Texas is a community property state, which does not mean assets are divided equally but rather based on what is “just and right.”

Of the many issues that a divorce can raise, one of the most concerning is often what will happen to the couple’s assets. There is no uniform way for dividing property across the country; instead, each state has enacted laws that dictate how the process will go. According to the Internal Revenue Service, only nine states use the community property system when dividing assets in a divorce. Texas is one of those states.

Understanding community property

Under Texas law, any assets that the couple acquired during the course of their marriage are presumed to be community property. Assets that are separate include anything a spouse owned prior to the marriage, any items he or she inherited at any time, and gifts given from one spouse to another.

When a couple chooses to end the marriage, community property will be divided. Keep in mind that debts may also be considered community, and therefore, a couple may have to share debt following a divorce. Separate property will remain separate and under the control of the spouse who owns it.

Dividing assets

The law states that community property will be split under a system based on what is “just and right.” This does not necessarily mean that assets will be divided equally. In some cases, the couple may be able to come to an agreement on who will get what. However, when that is not possible, a judge will make the decision. There are several factors a judge could take into consideration, such as the earning capacity of each spouse, who will raise the children, and the physical condition of each spouse.

There are also more complex factors that must be pointed out when dividing assets, such as the following:

  • Tax considerations
  • Anticipated inheritance or gifts
  • Losses that will take place following divorce, such as the loss of health insurance

Additionally, it may take a trained eye to appropriately distinguish community and separate property. For example, if separate property has been commingled with community property, those assets may be subject to division. One spouse who puts funds that were earned before a marriage into a joint account may lose the right as the sole owner of that money.

So, who keeps the house?

When it comes to large assets like a house, there are several different approaches. The first is that the couple could sell the home and put any proceeds into the marital estate for division. Or, one spouse could keep the home and essentially trade another asset for it, such as money equivalent to the equity the other spouse would have had in the home.

It is possible that the courts could give the family home to a spouse if he or she will be the primary custodian of children. This is often viewed an act in the best interests of the kids in mind, as it provides continuity. However, it is important to keep in mind the true value of the home and how that should apply to a “just and right” property division.

Splitting assets may sound simple, but it is often quite complex. Anyone facing these issues should consult with a family law attorney in Texas.