As you close out your personal affairs and finances for 2023 and make plans for the new year, you might be one of many people who are heading to court for divorce proceedings. If you have children or own a business, then the financial aspects of your divorce will be a top priority. It is important to understand that Texas is part of the minority regarding property division laws.
Texas is one of only nine states throughout the country that operate under community property guidelines in divorce. Most states follow equitable property rules. Before entering proceedings, it is important to understand the differences between these two systems and to know what to do to ensure that you receive a fair settlement.
Community property division means a 50/50 split
Under community property guidelines, a divorce court judge will typically split all marital property 50/50 between spouses. There will also be an equal division of liabilities, meaning any debt that you or your spouse incurred during your marriage. This system of equally dividing property and debt is different from most other states, which apply equitable property rules, meaning the court fairly divides assets and debts between spouses, although not always a 50/50 split.
Factors that are not necessarily relevant to a Texas divorce
In equitable property states, a judge considers numerous factors to determine a fair (equitable) division of marital property and liabilities. If you were to live in a state that operates under equitable property guidelines, determining factors might include marriage longevity, each spouse’s income and financial contributions to the household, as well as extenuating issues such as domestic violence or whether one spouse sacrificed a career to stay home full-time and raise a family.
In Texas, where community property rules apply, such issues will not necessarily change the outcome. The court will simply split all marital property and debts equally between you and your spouse. Some assets may be separately owned, such as property you may have designated this way in a prenuptial agreement. This is often the case when an individual owned a business before marriage or received an inheritance.
Protecting your financial interests in a Texas divorce
The longer you and your spouse were married, the more complex your divorce might be. Issues such as retirement benefits, insurance policies, stocks and investments, etc., may have a significant impact on your settlement. It is wise to seek guidance from a financial adviser and to have legal support on hand to ensure that you are receiving all that you’re entitled to under Texas property division laws.