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Understanding community property rules

On Behalf of | Jan 28, 2022 | Family Law

Texas is one of the few states that follow community property rules. For divorcing couples, this means that, in general, all assets and debts acquired during the marriage will be divided equally. However, in practice, community property rules are somewhat more complex.

The basic points of community property

When a couple decides to end their marriage, they will need to divide their property. In some cases, this can become a major conflict, as spouses fight over every asset. As well, assets include not only property, savings and investments. It also includes pensions and retirement accounts. The basic points of community property rules include:

  • Dividing all assets acquired using community income during the marriage equally between both spouses
  • Dividing all debt acquired during the marriage equally
  • Dividing assets acquired with joint individual and community income based on the part of the asset acquired with the community income
  • Keeping individual assets, those acquired before the marriage or after the couple legally separated, as individual assets
  • Allowing inheritances and individual gifts received during the marriage as individual property

Other important factors

Besides the basic points, it is important to know about other factors that might affect the division of property. First, if there is a legally-binding prenup or the couple negotiates another agreement, the 50-50 division will not be enforced. Second, in cases where the spouses bought property outside of the state, the division will happen based on where the funds to buy the asset were earned: in a community property or a common-law state. Finally, the division of property might also become somewhat more challenging when the spouses have generally filed taxes separately.

Dividing property can be stressful as there is a lot that depends on getting the division right and fair. Community property laws can help make the settlement each party gets from the divorce more balanced.