Dividing Property Upon Divorce

Caveat

The information on this website is designed to give the public an overview of Texas divorce law to assist in coming to an agreement on divorce. The website does not include all Texas divorce law: Many important subjects are omitted. If you have any doubt about your rights and obligation on divorce, you should consult an attorney rather than use Texas Divorce Lawyer Online for your divorce.

Community and Separate Property

When a couple divorces in Texas, the court must divide the couple's community property. A Texas court has no power to award one party's separate property to the other spouse except by agreement.

Community property is broadly defined as "the property, other than
separate property, acquired by either spouse during marriage." Texas Family Code § 3.002.

Separate property is:

  • Property owned or claimed by a spouse prior to marriage;
  • Property acquired by a spouse during marriage by gift, devise or descent; and
  • Recovery for personal injury sustained by a spouse during marriage, except recovery for loss of earning capacity during marriage.
Texas Family Code § 3.001.

The Community Property Presumption

Property possessed by either spouse during or on dissolution of marriage
is presumed to be community property. Texas Family Code § 3.003(a).

Under Texas law, the name in which property is held usually makes no difference to how property is characterized. The key to determining whether property is community property is when and how the property was acquired, not whose name the property is in.

Proving Separate Property

The degree of proof necessary to establish that property is separate property is clear and convincing evidence. Texas Family Code § 3.003(b).

Dividing Community Property

The court is charged with making a "just and right" division of the community property. Texas Family Code § 7.001. Division of the community property is a matter committed to the discretion of the trial court. However, if the parties come to an agreement on the division of their community property, judges usually approve the parties' agreement unless the property division is extremely one-sided.

If a divorce case is tried, the court looks to a number of factors to decide how to divide the parties' community property. Fault in the breakup of the marriage is one factor. According to the Texas Supreme Court, a court can consider many other factors, such as:

the spouses' capacities and abilities, benefits which the party not at fault would have derived from continuation of the marriage, business opportunities, education, relative physical conditions, relative financial condition and obligations, disparity of ages, size of separate estates, and the nature of the property. . . . Likewise, the consideration of a disparity in earning capacities or of incomes is proper . . . .

Murff v. Murff, 615 S.W.2d 696, 699 (Tex. 1981).

Special Note About Retirement Benefits

Many employee benefits are subject to the Employee Retirement Income Security Act ("ERISA") or to some other federal or state statute. Under ERISA, for retirement benefits to be divided in a divorce, the court must sign a "Qualified Domestic Relations Order," commonly known as a "QDRO." QDROs must be accepted by a Plan Administrator and can be technical.

"Retirement benefits" is broadly defined. The phrase can include pensions, retirement plans, annuities, employee stock option plans, and so forth. Many assets turn out to be subject to ERISA even though one would not ordinarily consider them "retirement benefits."If the spouses agree that each will keep his or her own employee benefits, then no QDRO is necessary. But if one spouse is to receive a part of the other spouse's employee benefits, then a QDRO will be necessary. Because of their complexity, we charge $400.00 for each QDRO required.


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