Family Law

Prenups & Marital Agreements

In a Texas divorce, one of the most common issues that drags the divorce out is property division. Property division is the division of all assets accrued during the marriage by both parties.

There are two categories one needs to be aware of in property division in a Texas divorce. The first category is “separate property.” Separate property is anything which was earned or accrued before the marriage, gifted to the party, inherited by the party, or, awarded as “separate” to the party in a prenuptial or a postnuptial agreement.

Everything which does not fall into “separate property” is by default “communal property.” Communal property is added up, and is then divided between the parties. The legal doctrine which controls the division of property states that the property must be divided in a “just and right” manner, taking into account the rights of each spouse and any children of the marriage. (Texas Family Code §7.001.) What this means in practice is that the Courts will normally strive to divided property about 50/50.

However, this 50/50 is not set in stone, and many factors affect the division, such as : the needs of a party to the divorce, education and employability, size of separate estates, age of the parties, fault in the marriage, fraud unto the estate, wrongful acts by one of the parties (torts), criminal actions involving community property, and so on.

Pension plans are subject to division, but only the money which accrued during the marriage. For example, if Amy has a 401k plan of $120, and $20 of that money accrued during the marriage, then her at time of divorce, Amy’s spouse can demand that the $20 be factored into the communal property at time of division and try to get at least half (or more) of that $20.

There are often disagreements between the parties as to how much an asset is actually worth, for examples antiques and business holdings. In such cases, the Court can – on its own initiative or at request of either party – appoint an expert valuator to value the asset in question and to report back to the Court. The valuator’s report is not the final say, but the Court normally presumes the valuator’s report to be valid. If a party disagrees, they can have their own expert do a competing valuation, and use that report to counter that of the Court’s valuator.

An important misconception to clarify is that in Texas, an asset is considered communal if it is earned or accrued during the marriage (with the exceptions listed above) even if it is only in the name of one of the parties. This means money which was earned during the marriage and put into a bank account in one spouse’s name only is still community property. The same applies to real estate property purchased in one spouse’s name only during the marriage.

Another important concept to keep in mind is where the money originated. If money which was separate property – say earned before the marriage or inherited during the marriage – was used to purchase an asset during the marriage, then that assets retains the distinction of being separate property, provided that a party can trace the purchase of that asset to separate money.

More rules and caveats apply. Division of property is a hotly contested and nuanced issue in a Texas divorce. If you require an experienced and aggressive attorney to help you dealing with the division of property in your divorce, the attorneys at Ilionsky Law, PLLC are standing by to provide you with highly effective negotiation experts to do just this. Give us a call at (713) 482-1974 to discuss your options and how we may help you.