Texas is one of nine states in the U.S. that has adopted community property laws. Unless someone is in the midst of a divorce, there's a good chance he or she doesn't know what that means. However, it's an important law to understand long before someone contemplates going through a divorce.
Here are five important things to know about community property laws in Texas and how they might pertain to anyone who is divorcing:
- Essentially, the law says that property or assets that were acquired during a marriage belong equally to both spouses. It doesn't matter whose income paid for it, whose name is on the contract or title ... if it was purchased during the marriage, in the eyes of the Texas law, it belongs equally to the spouses.
- It's not just property or belongings. It's checking and savings accounts, even if they are only in one name. It includes individual 401k contributions. Individual salaries and wages are also considered community property.
- There are exceptions to what it includes, such as gifts, inheritances and personal injury settlements. It also doesn't apply to things owned separately prior to the marriage.
- Having a legally executed marital agreement in place, whether it's pre- or postnuptial, can allow a couple to circumnavigate the community property laws. The perfect time to decide what makes sense regarding distribution of finances and property is when both parties are still looking out for each other's best interests. For example, the couple can decide that the primary custodian of the children should keep the family home.
- If one person owns a business that was acquired or developed during the course of the marriage, it is community property. This area of community property gets even more complicated as business appraisers and accountants are called in to determine the fair value of the business.
The court will usually take into consideration different factors including the level of education of both parties involved, who was at fault in the deterioration of the marriage, or who will be raising any minor children. It's unlikely that the ruling will be an exact 50/50 split. A seasoned family law attorney can help you maneuver through the convoluted process of a fair division of property and help you get what you're entitled to receive.