Community Property Laws in the Lone Star State

 Posted on May 19, 2016 in Complex Property Litigation

Texas is one of only nine community property states in the Union. The concept originally comes from Spanish law, and was adopted by Mexico in the 19th century and passed onto its possessions in what is now the modern-day United States. The idea is that marital property belongs to both spouses upon divorce, due to the emotional and financial nature of a marriage. Some states have very strict community property laws (in California, a 50-50 split is mandatory), but Texas has a community property presumption in Chapter 7 of the Family Code. Like most all presumptions, this provision can be overcome in certain high-asset divorces.

Identifying Property

The presumption applies to all property that was acquired during the marriage, unless it was a gift. This dividing line is not always clear, because property is often commingled. Assume that Husband bought a car before the marriage (separate property) and makes the payments from his paycheck (community property). Or assume that Wife inherited a rental house (separate property) and used proceeds from a second mortgage on the marital residence (community property) to fund improvements.

In these instances, the contributing estate may be liable for reimbursement from the recipient estate. So, Husband must give money to Wife to compensate her for the community funds he used to make payments on the vehicle, and Wife must do likewise because of the home improvements.

Dividing Property

Once property is identified, the judge may use a number of factors to divide it, including:

• Fault: Most states do not allow an "innocent" spouse to receive a greater share of the estate because of the adultery or other misconduct of the other spouse, but Texas is an exception.
• Relative Earning Capacity: In some cases, a business owner may have a larger earning capacity than a nine-to-five wage-earner.
• Separate Estate: One party's large separate property estate may be grounds to give the other party a larger share of the community estate.
• Support Obligations: Both child and spousal support may be calculated in the property division.

The final high net worth divorce must include a "just and right" division of the community estate.

For prompt assistance with a property division claim, contact an aggressive Williamson County high asset divorce attorney. Call Powers Kerr & Rashidi, PLLC at 512.610.6199 today.

Sources:

http://www.statutes.legis.state.tx.us/Docs/FA/htm/FA.7.htm#7.001

http://www.baylor.edu/law/faculty/doc.php/205011.pdf