In Texas, the law follows a community property system. This means that the court divides most property acquired during a marriage equally if a divorce occurs. For high-asset couples, understanding this division is crucial to protecting personal interests.
Texas marital property laws
Community property includes most assets accumulated during the marriage. This can be wages, retirement benefits, or even appreciation of a spouse’s separate property. For example, if one spouse owns a house before marriage, the home remains separate property. Yet, if the couple uses community funds for repairs or improvements, the marital estate could claim reimbursement for those contributions.
Separate property consists of assets owned prior to marriage or obtained through gifts or inheritance. The original owner retains these assets unless they mix them with community property. Courts assess property status based on the “inception of title rule,” which helps determine the property’s original ownership and contributions.
Factors affecting property division in high-asset cases
While Texas aims for a 50/50 split of marital property, this is not always the case in high-asset divorces. The court considers several factors when deciding on the division:
- Marriage length: a longer marriage often leads to an even division of assets, while shorter marriages may result in a more uneven split.
- Earning capacity: the judge may factor in each spouse’s education and earning potential when determining the fair division of property.
- Separate property: If one spouse has more separate property, that spouse may influence how the court divides community property.
- Spousal support: a spouse who receives maintenance or child support might have different property rights after divorce.
Judges also consider debts, like credit card balances, and assign them to the spouse who incurred them.
Protecting your property in divorce
High-asset couples can take steps to protect their wealth before and after marriage. A prenuptial agreement or postnuptial agreement can clarify how spouses will divide property, ensuring a fair outcome. Without such agreements, Texas law dictates the division of assets, but couples can still propose their own arrangements. If the judge finds the plan fair, they will accept it.
To ensure you receive a fair and equitable share, working with an experienced attorney who understands Texas law is advisable. A skilled lawyer can help you protect your separate property, assess the division of assets, and advocate for your financial future during the divorce process.