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Does community property equal half of everything in a divorce?

You might believe that because Texas prescribes to the community property method of dividing property and debts in a divorce that this automatically means that you receive half of everything in a divorce. In reality, the Texas courts focus more on dividing property in an equitable manner than in an equal one. In addition, before dividing any property, what constitutes the marital estate needs to be determined.

What assets make up the marital estate?

In general, any assets acquired during the marriage belong to both of you. For instance, the following property acquired during the marriage often makes up the marital estate:

  • Income earned by either of you
  • Your marital home
  • Investment income
  • Joint debts, including your mortgage loan
  • Earnings in retirement accounts
  • Furniture and other household belongings

You might own separate property that you acquired either before or during the marriage, such as the following:

  • Inheritances kept separate from the marital estate
  • Earnings after you separated
  • Property owned before the marriage
  • Separately held bank accounts
  • Real property, such as a home
  • Gifts you received
  • Proceeds from a personal injury claim
  • Debts in your name alone

In some cases, inheritances or other monies that otherwise constitute separate property become part of the marital estate if you put them into a joint account with your spouse. This co-mingling of assets could cause them to be included in the marital estate unless you and your spouse expressly agree to consider them separate property in the divorce.

Portions of some assets often end up part of the marital estate. For example, if you began a retirement account before the marriage, and it grew during the marriage, the portion acquired during the marriage is subject to division.

Once the assets are divided into marital and separate property, what happens next?

After establishing the marital estate, the court looks at several factors in dividing your assets:

  • The earning capacity of each of you
  • Any disparity in actual or potential income
  • Loss of compensation received during marriage
  • The size of the marital estate
  • The age of each of you
  • The physical and mental fitness of each of you
  • Any gifts considered separate property
  • Anticipated inheritances
  • Factors such as cruelty or adultery
  • Who receives primary custody of any children under the age of majority

In addition, the court might consider any other factors relevant to your particular circumstances. Obviously, the process entails much more than simply dividing your property in half. The courts attempt to avoid one spouse walking away with a disproportionately large part of the marital estate, which often eliminates the possibility of a true 50/50 split.

Before going to court or negotiating your own divorce settlement, other issues need considering. For example, consider the tax ramifications of receiving certain assets. The value of a retirement account and a home might appear equal, but taxes, any maintenance and other potential expenses attached to these assets often make them unequal in the end. Fighting for a certain asset from an emotional standpoint could cause financial consequences in the future. You should consider your choices carefully before entering the courtroom or negotiating a settlement outside the courtroom.

Attempting to go through the divorce process alone might jeopardize your future financial security. Obtaining that security requires careful preparation if you intend to let the court divide your assets or if you and your soon-to-be ex-spouse want to negotiate your own settlement. A family law attorney understands the stakes and helps you determine what constitutes the marital estate and the best course of action for your circumstances.

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