Community Property Lawyers serving Bell, Denton, Dallas, Collin, and Tarrant Counties and the cities of Allen, Argyle, Belton, Carrollton, Colleyville, Coppell, Dallas, Denton, Denton, Flower Mound, Fort Hood, Frisco, Grapevine, Harker Heights, Irving, Keller, Killeen, Lake Dallas, Lewisville, Little Elm, Mckinney, Nolanville, Plano, Prosper, Roanoke, Salado, Southlake, and The Colony.
Supportive Texas Lawyer Advocates for Clients in Community Property Division Disputes
Divorce is a difficult time in anyone’s life. You deserve an attorney who’s not only knowledgeable but compassionate as well. Here at Ilarraza Law, we fight to protect your rights and provide the guidance you need to make it through this challenging part of your life. One aspect of divorce that causes a lot of stress is the division of community property.
Compassionate Texas Law Firm Protects the Rights of Divorcing Spouses
Texas is a community property state, which means that divorcing couples are required to split the value of their marital property. At Ilarraza Law, P.C. in Flower Mound, I provide the legal guidance you need to protect your rights and secure a fair property settlement. Since 2010 I’ve been a strong advocate for our Texas clients during negotiations and in court.
Knowledgeable counselor advises on questions regarding marital property
At Ilarraza Law, P.C., I give clients comprehensive information concerning the division of community property and debts in a divorce. In this jurisdiction, community property is designed to encompass almost any type of asset that is accumulated by a married couple. Items that can be considered property include:
- Houses, cars, boats, clothing, furniture
- Copyrights, patents, trademarks
- Bank accounts, stocks, and life insurance that has a cash value
However, there are items that are not considered property for the purposes of property division following a divorce. These may include:
- Assets acquired before marriage:Community property law does not apply to inheritances and property acquired before the marriage and kept separate during the marriage — for example, funds from a trust that was left to you from your mother’s estate and that you kept in a separate bank account from your spouse or domestic partner throughout the entire duration of the marriage or partnership.
- Items covered by pre-nuptial agreements:Couples with a prenuptial agreement can avoid community property laws in Texas by setting forth their own terms in writing before marrying or entering into a domestic partnership.
- Mixed separate and community property — commingling:It can be difficult to distinguish between community and separate property. The most common problem is with pension plans. If a pension plan or retirement account were started before the marriage and contributions continued to be made to it throughout the marriage or partnership, it can be difficult to divide. In this example, the contributions made before marriage might be considered separate property while those contributions made during the marriage are considered community property. My firm can advise you about how such gray areas are handled under Texas law.
At Ilarraza Law, P.C., I deliver strong counsel when issues arise relating to valuation and how assets should be classified. My firm asserts clients’ rights no matter how complex or contentious the divorce might be.
How will the court divide our property?
Unless you can provide evidence of separate property, then the court assumes the property falls under community property as per the community property law in Texas. If you and your spouse cannot reach an agreement regarding the ownership of the community property, then a judge will divide your property in the way that they believe is considered “just and right.” The allocation will likely be different in every case. Just and right does not always mean 50/50.
How will the court divide our debts?
Texas community property laws also cover community debt. If you cannot agree on how to divide your debt, then the judge will decide for you. This means that the judge may decide that your spouse must pay a debt that is in both of your names. However, if the spouse does not pay that, then the creditor can still seek payment from you and vice versa. It is a good idea to keep a close eye on your personal credit report before, during, and after your divorce. You’ll also want to speak with your attorney on how you can protect yourself and your credit report in these situations.
What about Taxes?
Texas community property law also affects federal income taxes. If you and your spouse file separate income taxes, then each of you is taxed on 50% of the total income, no matter which spouse earned the income. For example, if Susan made $60,000 and David only made $40,000 and they filed taxes separately, they would each pay federal taxes on half of the combined $100,000 income. So, they would each pay taxes on $50,000 for the year. Each person is also responsible for federal taxes on any separate property they may own.
What about property purchased on credit?
If you and your spouse were purchasing a home or land together then it’s very important you speak with a divorce and community property attorney. Significant purchases like land and homes purchased on credit can put you in a difficult position if you don’t speak with a good divorce attorney. Here are some examples of situations you want to avoid.
- You could lose ownership but still be responsible for payments. The ability of a mortgage company to collect payment is not impacted by your final divorce decree. If you and your spouse purchased a home together and are still paying on the mortgage, and the judgment awards the home to your spouse, and your spouse does not make the payments, then the mortgage company will come after you. This can happen even if the judge issued court orders for your spouse to pay the mortgage. However, a family law attorney can help you protect yourself from these situations.
- You may be unable to enforce an order or agreement that says your spouse must pay you a portion of the value of the asset. In some situations involving certain assets including community real estate, the court may order one spouse to pay the other spouse for part of the value of the asset. This should be secured with a property lien. However, if you don’t secure it with a lien, then it’s possible you’ll never see that money. Thankfully, an attorney can help you with these situations.
- You may be unable to sell the property at a later date. If you are awarded property and don’t follow the proper steps to ensure you’re able to sell that property without your former spouse’s involvement, then you may find yourself in a difficult situation. This is another reason why it’s so important to have a lawyer for your Texas community property divorce.
It is important to remember that it doesn’t matter whose name is on the property or the deed unless the asset was purchased with the separate money of one spouse.
What about bank accounts with separate and community property income held within?
Community property laws in Texas state that anything acquired during the time of the marriage, including income that is placed into separate accounts, falls under community property and belongs to both spouses. So, even if you have separate bank accounts, the income you earned while married may still be in play. A divorce attorney can provide more legal advice on how you can keep property separate.
Is Inheritance Community Property in Texas?
An inheritance is not considered community property in Texas divorce even if the assets were inherited during the marriage. However, this is generally only true if the inheritance is not comingled in a way that makes it difficult to separate. For example, if one spouse inherits $15,000 from the death of a loved one and that money is deposited into the joint bank account, then it may become difficult to determine what was spent and what wasn’t as the years pass. Inheritance funds can also be comingled when they’re used to pay for household expenses or community property debts. Likewise, if you inherit a home and then use community property money to pay for improvements to that home then the lines blur on where the division is.
The best way to protect an inheritance is by ensuring that it remains separate property and that you can prove it is separate property over the course of the marriage. This includes keeping tax records, recording payments made, and keeping track of any and all improvements. It’s also a good idea to work with an attorney when you receive an inheritance to learn more about your options. Or, if you have not gotten married yet, you may wish to consider creating a prenuptial agreement or premarital agreement in the event that a divorce may occur.
Hire an Attorney to Help with Your Community Property Divorce
If you’re considering divorce or if you or your spouse has already filed for divorce, then the best thing you can do for yourself is to hire a qualified and experienced divorce attorney. Not only can they help you file for divorce, but they can also help you navigate the complexities of both contested and uncontested divorces. If you and your spouse share joint ownership of several assets or have at least one child together, then it’s imperative that you speak with an attorney. Your attorney will help with property division, child custody, child support, and even alimony while looking out for your rights and the best interest of you and your children.
Call Ilarraza Law today at (214) 646-3253 to learn more about the community property services we provide to help protect your rights and best interests.
Community Property FAQs
In the state of Texas, you can put community property in a will. The purpose of a will is to control how a person’s estate is handled should they pass away.
In the event that a married person has children from a previous relationship that are not the children of the surviving spouse, it doesn’t necessarily mean that their share of the community property goes to the spouse should the other spouse die. A married couple can agree in writing that all or part of their community property will pass on to the surviving spouse or they can create an agreement that some of the property will go to the children, and some will remain with the surviving spouse.
If you have any questions or concerns about the division or distribution of community property based on your passing, then it’s a good idea to speak with property division attorneys about how to handle your joint property should one spouse pass away. If these things are not handled ahead of time then they could result in long, drawn-out legal battles and assets being tied up in probate.
Yes. It is possible for adultery to affect the division of assets in the state of Texas. Texas court may award a smaller share of matrimonial property to a spouse who has committed adultery, especially if there is evidence.
Texas courts don’t necessarily divide community property equally. Instead, they focus on what is “just and right.” A just and right division of community property may mean that one spouse receives a larger share of the community property. To determine the share, the court will evaluate the following:
- Each party’s abilities and capacities including their physical and financial conditions
- The age difference between parties
- The estate size of each party
- The benefits for the not-at-fault party if the marriage would have continued
- Any business opportunities
- Each party’s earning ability
- And the nature of the property in question
The court may also consider other factors should they deem them relevant.
There are currently 9 community property states in the United States:
- New Mexico
No. In Texas, according to Texas divorce law, any property acquired by gift, device, or descent is separate property.
There are various pros and cons of living in community property jurisdiction states. They include:
- Community property offers balance for a spouse who may not be financially stable
- Community property also promotes the equal generation of ideas when it comes to communication, financial matters, and legal matters
- It does not require the married couple to enter an agreement prior to marriage to fairly distribute joint property
- If one person acts irresponsibly, then the other spouse is partially responsible for that behavior
- Some activities require transactional consent of the other partner
- If one spouse is more successful than the other, then they will have to share the bounty of their success
Many divorcing couples work together through mediation to agree on the division of community property. This allows them to have more control over what assets they receive in the divorce and negotiate for the property they care about the most. A qualified divorce attorney can help you through the mediation process to ensure your rights are respected and represented through the mediation and divorce process.
A community property premarital agreement outlines how certain community property will be divided in the event of divorce. Under the Texas Family Code, money earned during the marriage is generally considered community property, as is retirement benefits. However, should the couple want to avoid dividing retirement benefits or any other assets or debts, they can outline this agreement in a prenuptial agreement. This way, instead of considering an IRA or 401(k) community property, each couple may instead opt to keep their own retirement accounts and not have to worry about dividing the retirement accounts in the event of divorce.
Community property includes personal property, real estate, financial accounts, retirement accounts and pensions, cars, debts, and much more. The general rule of thumb is that if it was acquired during the marriage then it falls under community property assets or debts and liabilities.
Examples of community property include:
- The family home
- Retirement Contributions
- Other Employment Benefits
- Land or property owned
- Bank accounts
- Credit card debt
It is best to speak directly to a divorce attorney about when your income will no longer be considered community property. In many cases, as long as you are still married, the income of both parties of the married couple is considered community property. However, there may be instances where an attorney can help depending on your situation.
Quasi community property are assets acquired during the marriage but prior to moving to a community property state. If a couple moves from a non-community property state into a community property state then quasi-community property comes into effect.
In Texas, any property acquired during marriage (with a few exceptions) is equally owned by both spouses. This includes property and earnings no matter who paid for it or who has their name on the title or contract. If the property was purchased between the date of marriage and the date of divorce and it was not a gift, inheritance, or personal injury settlement to one specific spouse, then it is considered community property.