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Understanding the Community Property Laws of Texas

Understanding the Community Property Laws in TexasIn a divorce, determining how to divide of the assets and obligations accumulated and incurred during the marriage can be a challenge. For centuries, the prevailing approach was the concept of “equitable distribution,” where the court would try to find a “fair” solution if parties could not come to agreement on their own. In those jurisdictions, unfortunately, significant time and money can be spent trying to determine what is fair.

Texas, however, has joined a minority of states in implementing a different system, one designed to simplify the process—the community property approach. Under the Texas community property laws, the court starts by identifying the character of marital property—is it separate property or is it community property. As a general rule, any property owned and brought into a marriage is separate property and rightfully goes back to the owner in the event of divorce. All other marital property is considered community property, with two exceptions:

  • Property obtained by gift or inheritance
  • Property that both parties agree is separate property

It’s also important to understand that all property generally retains its character as separate or community property, even if it changes form. For example, if you own a home before the marriage, but sell it, the cash proceeds will be separate property, unless you commingle it with marital property. Accordingly, you don’t want to put proceeds from the sale of separate property into a joint marital account.

The parties to a divorce can agree to property settlements that are contrary to the Texas community property laws, but the court will always have the discretion to review and reject such agreements, should there be evidence of fraud and misrepresentation, undue influence or duress.

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At the office of Linda Stewart Law, PLLC, in Baytown, we bring more than 8 years of experience to clients in south Texas. To learn how we can help, call our office at 281-761-6042 or contact us online . We offer an initial consultation at a reduced fee of $50. We accept credit cards and will set up a payment plan, if appropriate. Our offices are open Monday through Thursday, from 9 a.m. until 5 p.m., and until noon on Fridays. Evening and weekend appointments can be arranged upon request.

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