A Guide on What is (And Isn’t) Community Property In Texas
You may be wondering, “Is Texas a community property state?” and if so, what will that mean for property division if you enter into a divorce? We have the answers that you need.
First, it’s important to understand that community property is a legal concept that governs the ownership of assets acquired during a marriage. In community property states, which include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Washington, Wisconsin, and Texas, all income, property, and debts acquired by a couple during their marriage are usually considered joint property and can be divided equally in the event of a divorce.
The concept of community property is that both spouses are equal partners in a marriage, and therefore should share equally in the assets and debts that are acquired during that time. This means that each spouse has a 50% ownership interest in all community property, regardless of who earned the income or made the purchase.
What Is Community Property in Texas?
Examples of community property under Texas law can include:
wages (including salaries, tips, and overtime) earned by either spouse during the marriage
real estate purchased with those wages
debts incurred during the marriage
the balance of 401ks, savings accounts, and other investment accounts regardless of whether they are single or joint accounts
vehicles purchased during the marriage regardless of the name on the title
The reality is that community property can be especially complex to divide for high-net-worth households that include ownership of a business, large retirement accounts, and other complex high-value assets for division. This is why it’s deeply important to have a lawyer’s guidance when considering a divorce or even when entering into a marriage.
In community property states like Texas, there are some important considerations that couples should keep in mind when managing their finances. Among those are prenuptial or postnuptial agreements. These marital agreements allow couples to clarify ownership of certain assets and debts in the event of a divorce. While it may not sound romantic, and you will hopefully never need it, signing a prenup or postnup offers protection and peace of mind.
What Is Not Community Property in Texas?
Certain assets and debts can be excluded from community property, such as:
property owned before the marriage
inheritances received by one spouse during the marriage
debts incurred before the marriage
jewelry given to one spouse by the other
A spouse’s personal injury settlement resulting from an auto accident in which he was injured
It’s also important to note that while a property that was acquired before the marriage is not community property, any payments that were made towards that asset during the marriage with wages earned during the marriage could be requested by your spouse as a reimbursement.
How Will Your Property Be Divided?
What is or is not community property in Texas is important to consider, but this does not mean that the court is required to divide your property equally. All factors, ranging from the earning potential of each spouse to the best interest of any children in the marriage, can be taken into consideration by the court. Similarly, the court is not required to divide debt equally, but will instead decide what constitutes a “just and right division” based on all of the factors involved.
Overall, community property can be a complex legal concept that requires careful consideration and planning for couples who live in community property states. However, by understanding the basics of community property and working with an experienced attorney, couples can ensure that their assets and debts are managed in a way that is fair and equitable for both parties.
Get Qualified Legal Help
Don’t navigate property division or protection on your own! Whether you are in need of a drafting a prenuptial/postnuptial agreement, or you are ready to start the divorce process and are unsure of where to begin, Capps Law Firm has decades of experience in complex family law cases just like yours.
Schedule a consultation today and move forward with confidence.
Notice: This article does not create an attorney-client relationship. Its purpose is to educate the public about the topic of family law. This article should not be seen as legal advice. You should consult with an attorney before you rely on this information.