Property Division

Property Division

Division of Property Divorce Lawyers in Frisco, Texas (TX)

Our Law Firm Serves Clients in the Following Counties: Collin, Denton, Dallas, Rockwall, Kaufman, Johnson and Cooke.

Disclosures and Valuations

One of the first steps in property division is to identify and determine the value of all assets and debts. Many clients are concerned that they do not understand the contents of their estates. This fear can be very paralyzing, especially if you don’t have access to the financial accounts and assets.

However, as part of the divorce process, you will be granted access to and full disclosure of all the assets and debts owned by you and your spouse. If needed, sending formal discovery requests to your spouse, taking depositions of those with relevant knowledge about your estate, and even sending subpoenas to financial institutions can be used to ensure we understand exactly what property is owned by your estate.

If there is a dispute over the value of an asset, such as a business or piece of real property, we will take the necessary steps to obtain a competent and reliable valuation of that asset to aide in the property division analysis. No matter how large or complicated your estate may be, Grinke Stewart Law, PLLC, can help you identify your assets, understand your legal rights, and protect what is rightfully yours. We work closely with trusted forensic accountants, certified divorce financial analysts, business valuators, and other experts to help identify and protect your property.

Division of Property in Texas – Separate vs. Community Property

Texas is a community property state, which means the court will divide all assets and debts acquired during a marriage in a “just and right” manner.  However, this does not necessarily mean that all the community assets and debts are divided equally.

Separate Property

Generally, separate property is defined as anything that belonged to someone prior to marriage or that was acquired during the marriage through gifts or inheritance. This includes assets a spouse received in a prior divorce, personal property items a spouse owned before the marriage, such as a car or furniture, and even gifts a person received during the marriage from his or her spouse or anyone else. Separate property can also include dividends and capital gains on property owned before the marriage and proceeds from a personal injury award (excluding proceeds for lost wages and medical bills).

A party’s separate property is not subject to division by the court in a divorce proceeding.  However, it is possible for you to lose your separate property if you are not careful. For example, if you have a bank account comprised solely of funds that you owned before marriage, those funds are your separate property. But if you deposit money you earned from your employment (which is considered community property) into that bank account during your marriage, you have now commingled the funds and have potentially lost some, or even all, of your separate property in that account.

Community Property

Community property is everything that is not classified as separate property. Assets acquired during the marriage are presumed to be community property, and thus, the court has the ability to determine how those assets will be divided. This can be true regardless of the asset only being titled in one spouse’s name. Likewise, income earned during the marriage is usually owed by both spouses, even if one spouse didn’t work. That means the court can decide which party will receive those funds, as well as the other assets accumulated during the marriage.

Examples of typical community property include:

• Real property, such as a home or land
• Cars, boats, RVs, and other vehicles
• Furniture and decorative items
• Money in checking accounts and savings accounts
• Businesses
• Stocks and investments
• Retirement account contributions

A key point to note is that things such as premarital and post-marital agreements can alter the classification of assets as separate property or community property. In these agreements, the spouses can decide that certain property (or debt) will stay separate, even though it would otherwise be considered community.

Division of Debts

Just as spouses must classify separate and community assets, they must also classify separate and community debt and divide all community debt. Like assets, debts are considered separate if they were incurred by one spouse prior to the marriage and are considered community if they were incurred during the marriage. Community debt will also be divided in a way that is “just and right,” which again, does not necessarily mean 50/50.

It is extremely important to understand that a creditor’s debt collection rights are not cut off or changed with a divorce agreement. Creditors can seek collection from either spouse for debts taken out in the names of both spouses, regardless of what is ordered in a divorce decree. This means if a spouse is allocated a certain debt in a divorce agreement, like a car loan, but doesn’t pay the loan, the lender can seek payment from the other spouse. The spouse responsible for paying the debt will need to refinance and remove the other spouse’s name in order for that spouse to be relieved of the obligation to pay.

Division of Retirement Benefits

Spouses are often surprised to learn that retirement benefits can be considered community property subject to division in Texas divorces. Retirement benefits include all of the following:

• 401(k) accounts
• Individual Retirement Accounts (IRAs)
• Pensions
• Deferred compensation accounts
• Any other retirement savings accounts

Generally, contributions made to retirement accounts during the marriage will be considered community property, while contributions made before the marriage will be considered separate property. It does not matter which spouse’s name is on the account, which spouse contributed to the account during the marriage, or whether one or both of the spouses is actually retired at the time of the divorce.

In some cases, additional factors will determine whether retirement benefits are eligible for division. For instance, for Social Security spousal benefits and military retirement benefits, spouses will need to consider the duration of the marriage, work history, and/or duration of military service.

Retirement benefits can be a person’s most valuable asset, which leads to the desire to avoid splitting the contributions. For this reason, withdrawal of retirement benefits during divorce proceedings is illegal in many counties in Texas. Spouses living in counties without orders prohibiting retirement withdrawals can request a temporary restraining order (TRO) that would prevent the same.

Factors for Division of Property in Texas

Many factors can be taken into consideration when determining how to divide community assets and debts, including:

• The spouses’ education levels, ages, and health;
• Each spouse’s income and ability to earn income;
• The length of the marriage;
• Whether one spouse will be the custodial parent of any shared children;
• The separate property of each spouse;
• The tax consequences of property division;
• The cause(s) of the failure in the marriage (adultery, insupportability, etc.); and
• Other factors the court deems relevant.

The court will look at the unique circumstances present in the case and make the most equitable decisions for property and divisions based on all of the information.

Contact Grinke Stewart Law, PLLC for Experienced Representation

Grinke Stewart Law’s team is here to answer all of your questions and provide the resources you will need to solve your legal issues regarding division of property in Texas. Call Grinke Stewart Law, PLLC at (469) 598-2001 to discuss your legal matter or click here to schedule a consultation with one of our attorneys.