The end of marriage in Texas could mean significant changes to people's finances as one household gets split into two. Assets and liabilities must be divided, but how people go about property division typically leaves room for many mistakes. Failing to be smart about money matters in divorce could lead to problems, including unnecessary taxes and assets that are less valuable than the ones given to a spouse.
Texas is one of 10 states that operate according to community property law. Sometimes community property is referred to as marital property. These laws are used to govern how debt and assets are divided in a divorce. Some of these states divide the debt and assets equally between divorcing couples while other states, including Texas, use equitable division. Equitable division allows judges to use discretion when distributing the assets and debts to each member of the divorcing couple.