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What Happens to the Community Property after Divorce?

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Knowing whether a property is characterized as community or separate is very important when you divorce. 

When filing for divorce, if there is no agreement between the spouses as to the division of the property, the court will be the one to decide on this matter.

Texas Law on Community Property

Texas follows the rules on community property when it comes to the property of the husband and wife.

Community property essentially means that most, if not all, of the properties acquired during the subsistence of the marriage belong to both the spouses. This type of property settlement follows the rule of “what is mine is yours and what is yours is mine.”  These properties shared by the spouses must be  liquidated and divided at the time of divorce. When the marriage ends, they each get to own and keep their separate properties and get their respective portions of the community property. 

What is Separate Property

Separate property is defined as any property that only one spouse owns and cannot be encumbered by the other spouse. These include the properties of the spouses owned before the marriage, property acquired by only one of the spouses by virtue of inheritance, property as a gift by only one of the spouses, and lastly, recoveries for personal injuries sustained by only one of them, except for what was intended to compensate for lost earnings during the subsistence of the marriage.

Presumption when it comes to Properties of Spouses

As a  general rule, the presumption is that all properties are considered to be community property. The exception to this rule is proof to the contrary by the party claiming that it is to be considered as separate property.

The degree of proof must be preponderance of the evidence.

As for other types of marriage settlements, it must be done before the wedding – as much as possible. Texas law permits the court to divide marital property in what the court believes to be just and right, considering the  rights of each spouses and children of the marriage, if there be any.

Property outside of Texas acquired by either spouse shall be considered as community property if the same property would be considered as community property had it not been obtained in Texas.

In addition to all other community property in a decree of annulment or a divorce, the court will be the one to determine and decide the rights of both the parties with regard the disposition of the following property:

  • Claims for reimbursement;
  • Insurance Policies; and
  • Pensions, annuities, annuities, employee stock option plans, IRA’s, , stock options, or other forms of savings, bonus, profit-sharing, or other employer plan or financial plan of an employee or a participant.

It is best that you contact a family lawyer if you have any doubts as to your marriage settlement or you need clarifications on the matter.

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Hutton Law

Mr. Hutton is a Divorce and Custody Lawyer based out of Round Rock, TX. His background is with child psychology at Arizona State University where he received a B.S. in 2006, and he continued this by working with the Children’s Right’s Clinic at the University of Texas School of Law where he received his J.D. in 2009. Throughout his practice, he has been a strong proponent of utilizing modern technology to improve his practice and the representation of his clients. He currently is the technology chair of CAFA of Travis County and is committed to improving and modernizing the practice of law in Texas. If you have any questions you can contact him at timothy.hutton@austintexaslegal.com

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