Community property generally isn’t the most pleasant of topics because it usually involves either divorce or the death of a spouse. Texas is considered a community property state, which means it considers property accumulated during marriage to belong to both spouse, even if it was acquired in the name of only one spouse. In fact, Texas is only one of nine (9) states that recognize community property. The remainder of the states utilize equitable distribution laws, which mean that a judge decides how any property acquired during the marriage should be divided “equitably” or based on what the judge determines is fair.

What is the Difference Between Equitably and Evenly?

Community property in Texas is divided equitably, not equally, which means it’s up to the courts to determine what is equitable. Some states that recognize community property divide it evenly, or 50/50.

How do the Courts Consider Equitable Division of Assets?

There are many factors that are taken into account when the courts consider equitable distribution of community property. They can include:

  • Who’s at fault in the breakup of the marriage,
  • Earning power disparity,
  • Health of a spouse,
  • Child custody,
  • Education, and
  • Employability in the future.

In Texas, equitable is defined as what is “just and right”.

Does Community Property Also Refer to Money?

Community property law refers to all income and assets that were acquired during the marriage. So even if only one spouse was employed, the other spouse owns half of the amount earned, and thus has ownership interest in bank accounts, employee benefit plans and investment accounts to the extent that such financial assets were acquired during the marriage.

Does Community Property Also Refer to Money Owed?

Yes, debts are included in the concept of community property. Any debt incurred during the marriage or money owed, such as credit card debt, mortgage payments and car loans can be allocated equitably between both spouses. Debts however also usually involve a contract between one or both of the spouses and a third party, such as a bank or other financial institution, and the rights of that third party cannot be cut off if both parties are on the obligation. The existence of a debt may impact who is able to afford to pay for the asset that secures the debt.

Is a Gift Considered Community Property?

No. Any type of asset inherited or received as a gift during marriage is not considered community property.

How are Employee Benefits or Pensions Addressed?

Employee benefits, including pensions, are included as community property if they are earned during the course of the marriage. The courts, however, or the parties might decide not to divide some employee benefits equally if each spouse has their own retirement account or pension.

If you have questions about community property in Texas, contact the law offices of Mary Ann Beaty. She’s a board-certified attorney who’s been practicing family law in Dallas for over 40 years.