The “Just and Right” Division of Community Property in Texas
The Texas courts have the authority to divide the community property of a marriage in a manner that is deemed “just and right.” The division does not necessarily mean a 50/50 split of the community property. Instead, the court has broad discretion in determining a “just and right” division and may consider a variety of factors in deciding how the community property will be divided.
In several cases, the Texas Supreme Court ruled that a trial court can take into consideration many factors in deciding a “just and right” division of the community estate at the time of divorce. The Court set out a non-exhaustive list of factors that a court may utilize to facilitate an outcome that is fair to all parties involved. Every divorce is different and there is no ‘cookie-cutter’ formula in determining how the community estate will be divided. Be sure to provide your attorney with all the information at your disposal that will help the court decide how to divide your marital estate.
Familiarizing yourself with the types of situations and factors that a court may consider are helpful in understanding the court’s broad discretion in making their decision. There are four primary categories of the types of circumstances that are commonly used by the court in deciding a “just and right” division of the community estate. Within each category are numerous nonexclusive considerations which address a variety of possible family dynamics.
The Spouses’ Ability to Support Themselves –
When the court is dividing the community estate, the comparative economic status of each spouse is of concern because commonly there is some financial disparity in the ability for one spouse to support themselves. During the divorce process, both spouses should extensively consider their prospective future needs. When evaluating your future needs for support, it is crucial to take into consideration how any children of the marriage will be supported after the dissolution of the marriage. If you are going to be the primary parent for the children, you should look at the potential needs for your children in the future. For example, a spouse may be awarded the family residence because it is the best interests of the children to stay in the home with the primary parent.
When considering financial disparity between the spouses, the court may look to a spouse’s educational background and employment capacity. A court may award a spouse a larger portion of the community estate if their earning ability is limited due to the marriage. For example, a spouse may be unable to earn an education because they have to stay home with children from the marriage. Another situation may arise where a spouse has limited skills and resources, and therefore may lack the ability to obtain future employment to support their needs. The court may also look to the spouses’ business opportunities and each of their financial conditions and commitments.
Each spouses’ ability to support themselves may also be measured by the size of their separate estate. Texas recognizes two types of property: separate and community. The separate property owned by one spouse may be analyzed by the court when deciding how the community estate should be split. If a spouse has a significant amount of separate assets, the value and effect of their separate property may heighten their ability to support their needs after the divorce is final.
The court can consider the age and health conditions of each spouse when determining how the community estate will be divided. An injury or disability can have a strong impact on a person’s ability to support their needs. Also the age of a spouse may be used, if needed, in deciding what is “just and right” in each set of circumstances.
The Wrongdoing of a Spouse –
In Texas, marital fault may be considered in making a “just and right” division of the community estate. Texas fault-based grounds for dissolving marriage include cruelty, adultery, a felony conviction, or abandonment. A divorce in Texas can be granted on no-fault grounds or fault-based grounds. If your divorce is granted on fault-based grounds, the court may consider those ground when deciding how to divide the community estate. If your divorce is to be granted on no-fault grounds, the courts are split as to whether fault-grounds can be used to divide the community estate. Some courts will not allow fault-based grounds to be considered if your divorce is based on no-fault grounds. Other courts may allow fault-based grounds to be considered during the division of the community estate even if your divorce is to be granted on no-fault grounds.
Another factor a court can consider is other misconduct of a spouse during or prior to the divorce process. Because Texas is a community property state, the community property of a marriage belongs to each spouse. If one spouse intentionally tries to waste money and deplete the assets of the community estate without the permission or knowledge of the other spouse, the court may consider their conduct in dividing the community estate. It may be “just and fair” for one spouse to receive a larger share of the community estate because the other spouse has intentionally destroyed portions of community property belonging to both spouses.
The Financial Burden Sustained by a Spouse during the Divorce Process –
The divorce process is often time consuming and expensive. Often times, one spouse incurs a greater financial burden during the process and therefore can be considered by the court in dividing the community estate in a “just and right” manner. When splitting the marital estate, various financial issues may confront each spouse. A court has the discretion to consider whether one spouse is awarded spousal support to provide for their needs during the divorce process. Because a spousal support payment is financially burdensome one spouse, such payments can be used to help the court divide the community estate in a “just and right” manner. A spouse may expend a greater amount of money to maintain the community property during the divorce process and should therefore be considered in dividing the community estate.
Attorney fees and court costs stemming from a divorce can cause a substantial financial impact on both spouses. The court has the ability to look at the financial burden underwent by both spouses in order to obtain a divorce to aid in the division of the community estate.
Another financially burdensome factor that can affect a spouse during the divorce process and after a final judgment is rendered are the tax consequences associated with dividing property. There are many tax benefits associated with being married and because a divorce results in the cessation of these benefits, one spouse may sustain a larger financial impact compared to the other spouse. The court can look to the financial burdens incurred by either spouse when deciding how the community property should be divided in each case. A spouse’s tax liability can be altered when dividing the community property of a marriage. The capital gains and losses associated with property division can be considered by the court as well as the potential tax penalties that can arise post-divorce. Because every case is different, the court has the ability to choose what factors would result in the best, “just and right” division of the community estate.
Other Considerations –
The last category of factors includes various considerations that do not fall under the other three categories. The length of marriage can be a factor considered by the court when making a “just and right” division of the community estate. The longer the marriage, the more complex the division of community assets will be. The court may not always consider this factor when dividing the community estate, but has been a consideration made in previous cases.
Another consideration that can be given when deciding how to divide the community estate is the nature of community property. For example, each spouse may have their own individual vehicles. However, both of the vehicles may be part of the community estate if bought during the marriage. A court will look at the nature of each asset and how it is managed. Though the vehicles belong to the community and may differ in value, the court will likely award each spouse their respective vehicle with dividing the community estate. If there is a business of the marriage, the court may apply the same principles in deciding how to divide the asset. The court’s discretion is flexible which allows them to equitably distribute the community assets between two spouses during a divorce.
To learn more about how the court may divide your property during your divorce, contact a member of our family law team.