Is Texas a community property state?

When it comes to marital property and finances, there are two main ways that states handle these matters:

• Community property: the default assumption is that all property and financial assets acquired by either spouse during the marriage--that is not separate property--are owned equally by both spouses.
• Equitable distribution: property and assets are divided between the spouses in a way that the court determines is fair, taking into account various factors such as each spouse's contributions to the marriage.

The other community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Washington and Wisconsin.

Community property vs. Separate property

A crucial factor in community property states is the distinction between community property and separate property.

As noted above, most debts and property acquired during a marriage are considered community (or marital) property. But separate property is treated differently.

So what is separate property? Typically, a spouse's separate property is:

• the property owned or acquired by the spouse prior to the marriage
• gifts or inheritances acquired during the marriage
• recoveries for personal injuries sustained during the marriage (except for recoveries that relate to the loss of earning capacity)

As noted above, separate property in Texas is a spouse's separate property entering the marriage; any gifts or inheritances a spouse acquires during the marriage; and recoveries for personal injuries sustained during the marriage, such as a personal injury settlement or jury award.

Community property in Texas is everything else; that is, everything that is not separate property. Texas law defines community property as all property acquired by either spouse during their marriage, except for separate property.

Indeed, Texas law states, "property possessed by either spouse during or on dissolution of marriage is presumed to be community property," so a spouse must actually prove by "clear and convincing evidence" that something is separate property.

(Note also that community property rules apply to common law marriages in Texas as well).

Examples of community property assets in Texas

Examples of community property in Texas include:

• The family home
• Any other real estate that is acquired during the marriage
• Cars, boats, or other vehicles
• Furniture, appliances, and other household items
• Bank accounts, stocks, and other investments
• Jewelry, clothing, and other personal property

Remember, a key factor for all these examples listed above is that they are acquired during the marriage.

Examples of community property debts and liabilities in Texas

Just as marital assets must be divided in a divorce, marital debts and liabilities but also be divided. Examples of marital debts in Texas include:

• Mortgages on the family home or other real estate
• Loans for cars, boats, or other vehicles
• Credit card debt
• Any rent that is owed

Similar to assets, though, keep in mind that marital debts are debts created during the marriage. Both parties are responsible for debts taken on during the marriage, regardless of whose name is on the title or note.

Texas law states that community property must be divided "in a manner that the court deems just and right."

Thus, the court has some discretion when dividing marital property and is not required to award a 50/50 split. If the court determines that an equal division of property would not be fair, it can award a larger share of the property to one spouse.

Factors that the court may consider when determining whether to deviate from a 50/50 division include:

• whether one spouse is at fault in the breakup, such as due to adultery or drug abuse
• whether one spouse has significantly greater earning potential than the other
• which spouse has custody of any children
• any relevant tax consequences of the distribution
• each spouse's respective education and future employment prospects

How are marital debts divided in Texas?

As with community property, marital debts are assumed to be shared by the spouses, but courts in Texas are not required to divide debt equally. Instead, Texas courts apply the same "just and right" criteria when dividing marital debts.

Reaching your own agreement

In some cases, spouses may agree to a different division of property than what the court would order. And working with your ex-spouse can reduce some of the stress, time, and costs involved in the divorce process.

The spouses can come to a mutually acceptable agreement on how to divide their property, which is then presented to the court. If the court determines the agreement is "just and right," the agreement would be approved and incorporated into the divorce decree.

If the court does not approve the agreement, the judge can either request the spouses to try again or order a hearing to determine the matter if the couple cannot reach a fair agreement.

As noted above, Texas law states that property owned by either spouse is presumed to be community property at the end of a marriage, so a spouse has to prove by "clear and convincing evidence" that something is actually separate property.

Here are several steps that you can take to support your claim in the event you need to prove something is separate property.

• Avoid commingling separate property with community property -- If property is commingled with community property, it can be difficult to prove that it is separate property.
• Keep detailed records -- This can include bank statements, receipts, and other documentation showing the source of the funds used to acquire the property. Records are particularly important because property acquired with separate property is also considered separate property.
• Maintain separate property in the name of the individual spouse -- In Texas, property acquired by one spouse before the marriage, by gift or inheritance during the marriage, or after the date of separation is considered separate property. If one spouse acquired the property in one of these ways, it should be maintained in that spouse's name in order to support a claim that it is separate property.

There are several ways that couples can avoid having their property be considered community property in the event of a divorce.

1. Enter into a prenuptial agreement

A prenuptial agreement is a legal contract that sets forth the terms for how property will be divided in the event of a divorce. In a prenuptial agreement, the couple can specify which property will be considered separate property and which property will be considered community property.

2. Keep separate property separate

If a couple wants to keep their property separate, they should ensure that separate property is not commingled with community property. This means that separate property should be kept in the name of the individual spouse who owns it and should not be used to pay for expenses related to the community property, such as the mortgage or household bills.

3. Keep records of separate property contributions

To ensure that property is considered separate property in the event of a divorce, couples should keep detailed records of any contributions of separate property. This can include bank statements, receipts, and other documentation showing the source of the funds used to acquire the property.

Is Texas A 50/50 community property state?

No, Texas is not a 50/50 community property state. 

Texas is a community property state, but the courts are not required to use a 50/50 property division. Instead, Texas community property laws state that judges must divide property in a way that is "just and right."

In other states, community property law often requires a 50/50 property division, but that is not the case in Texas.

What are the exceptions to community property in Texas?

Here are some exceptions to community property in Texas:

• Each spouse's separate property entering the marriage
• Property acquired by either spouse after the date of separation
• Gifts, inheritances, or personal injury recoveries of a spouse during the marriage
• Property acquired using separate property funds during a marriage (e.g. a spouse buys a car using money from an inheritance)

How does Texas spousal maintenance impact community property?

Spousal maintenance, sometimes referred to as alimony, is a payment made by one spouse to the other spouse to provide financial support during or after a divorce. Whether or not to award spousal maintenance in Texas is a separate consideration from community property laws.

That said, the community property division could impact a spouse's financial position and ability to support themselves, which could impact whether they are eligible for spousal maintenance in Texas.

So, is Texas a community property state? Yes, but it does not require community property to be divided 50/50, unlike some other community property states.

Instead, Texas community property laws require the court to aim for a property division that is "just and right."

If you have questions about property division in Texas, it may be worth speaking with an experienced family law attorney. And if you do, here are the key questions to ask them when you first meet.