Separate vs. Community Property in Austin, Texas Divorce Cases
What is the difference between separate and community property in Austin, Texas divorce cases?
All assets you and your spouse have acquired during your marriage because of your earnings and income is commonly referred to as community property. Examples of community property are homes or other real property, vehicles, retirement accounts (IRA’s, 401ks, pensions), stocks, and personal property (furnishings, clothing).
Separate property is any property you owned prior to the marriage or have obtained through inheritance or gifts during the marriage. This includes gifts from one spouse to the other during the marriage. Additionally, certain types of monies recovered independently from lawsuits may be characterized as separate property. The presumption in Texas is that all martial property at the time of divorce is community property; if you want to show something is either entirely or partially your separate property then you have the burden to prove that claim by documenting or tracing the source of those funds and property. If you fail to adequately prove the separate property characterization of an asset, the court will consider it community property and divide it between the divorcing spouses in a Texas divorce case.
Debts incurred by either spouse during marriage are considered community. These liabilities include mortgages, car loans and credit card debts. Even if only one spouse’s name is on the loan document or title to the property, if acquired during the marriage and if the loan or credit was extended taking community earnings/property into account then the debt is typically considered a joint or community obligation and thus subject to division. Typically the party awarded the property at the end of the divorce is also awarded the debt; in other words the debt follows the property. This is to protect the asset in the future because the party who owns the property is responsible for making the corresponding debt payments.
Debts that are separate property are those (1) incurred prior to marriage and/or (2) incurred during marriage that were secured solely by the separate property of one spouse with a statement from the lender to look only to that spouse’s separate property for security of that obligation. All separate property and separate debts are automatically awarded to the spouse whose name they are in. The other spouse has no claim on the separate property and no legal obligation to pay the separate debts. Again, if you are asserting that property or a debt is separate you have the burden to demonstrate that.
Texas law also provides that, if you divorce in Texas and have property that you acquired while living outside of Texas and that property would have been community property if it had been acquired in Texas, the court shall treat it as community property. This is often referred to as “quasi community property.”
In Texas, upon divorce all marital property is subject to what is called a “just and right division.” Community property is commonly divided fairly evenly between the parties, just as are all community debts. However, there are certain circumstances where a judge may award more of the community estate to one party.
At the beginning of your divorce case in Austin, Texas you should discuss all of your assets and liabilities and the circumstances around your income so that your attorney has a clear idea of the community estate and so that your attorney can help you protect your separate property.
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