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Do community property laws require that you split everything?

On Behalf of | Jan 21, 2022 | Divorce

Dividing real and personal property can be challenging.  Frequently, both spouses would like to keep the same asset or have different opinions about the appropriate way to divide their possessions and financial obligations.

Unless you have an agreement with your spouse or negotiate arrangements outside of court, you will be subject to Texas community property laws during divorce litigation. Community property rules presume that both spouses have an interest in everything earned, accumulated or purchased during the marriage.

Does that mean you have to divide all of your assets equally during your divorce? 

You don’t have to divide everything

There are numerous ways to handle property division in a Texas divorce. Spouses have the option of settling outside of court and coming up with creative solutions on handling the division of assets and debts and even agreeing to do things a judge could not order to be done. Without an agreement, however, a judge will listen to evidence and information on property and render an order on how to handle the division.  A judge can order assets to be divided or sold or awarded solely to one spouse.  They can offset an asset division by awarding one spouse more debt or more of one asset and less of another.  How specific property is divided depends on the type of asset, the size of the estate as well as the parties’ circumstances.  The overall division of assets does not have to be equal – the parties can agree to a different division than 50/50 and/or a court can order a disproportionate division depending on circumstances.

When working on a division of assets, it can be easier to divide a retirement account or a checking account or something of concrete value and more difficult to divide items such as household furnishings or tools, for example.  Parties may attribute much more sentimental value or dollar value to those items than a judge would and it typically costs more to fight over those things than it does to replace them.  The best approach is to start by determining if there is even an issue on who gets what from the marital residence and then try to negotiate the items in dispute or possibly value those in order to negotiate a division.

Separating property may require additional steps

With some assets, like a house, a spouse may choose to refinance the loan to either remove the other spouse from the liability or to obtain funds to buy the other spouse out of the equity in the home. There are also deeds that must be signed when a house is awarded to one spouse in a divorce.  Dividing retirement plans often requires a separate court order and steps post-divorce.  It is important to make sure that orders for retirement are submitted to the appropriate plan administrators and receipt confirmed, that any deeds needed are filed in the property records of the appropriate county and  that car title issues are addressed before a division of assets and debts is truly complete.