The marital estate refers to property and debts of a Texas marriage. Before you can complete a successful uncontested Texas Divorce, you must have an understanding of what is contained in your Marital Estate. In this discussion, I will only focus on the property aspect of the marital estate and discuss debts in a later post. Obviously some marital estates in a Texas Divorce have large and complex property issues with businesses, retirements, houses, rent houses, and so on, while other estates have very little property to divide. Regardless of the complexities, the marital estate of a Divorce is composed of 3 estates:
- The community estate – This is all property acquired during the marriage.
- Your Separate Property – This is all property you owned prior to the marriage, any property you received during the marriage in the form of a gift or inheritance, or property that can be “traced” to your separate property. The concept of “tracing” will be discussed in a future post.
- Your Spouse’s Separate Property – The same rules discussed above apply to your spouse’s separate property.
What complicates things under Texas Divorce Law (a combination of The Texas Family Code & Texas Property Code) is that courts will presume that all property possessed by the parties in a Texas Divorce proceeding is “Community Property” and thus subject to a “just and right” division by the court unless a spouse can prove that some of the property is their “Separate Property” and exempt from a division by the court. So, for example, that rent house you owned prior to the marriage or that $100,000 you received as an inheritence from your Grandpa’s estate, is presumed by a Texas Family Court Judge to be community property and based on that legal presumption your spouse could be awarded some, or all, of that property if the court isn’t presented with sufficient evidence that those property items are your separate property. Once Separate Property is proven, it is “off the table” for the Texas judge to divide, as a family law judge only has authority to divide the Community Property based on the Texas Constitution and nothing else.
As a result, many spouses that can’t reach an agreement will pursue costly methods to prove that specific items of property are in fact their “separate property.” The problem with this is proving separate property can be difficult as it must be proven by “clear and convincing evidence” to the judge and this often requires the use of an expert. Experts cost at least $3,000 – $5,000 on the low end (sometimes just to get started) and upwards of $15,000 – $30,000 on the high end. The concept of proving separate property is explained in more detail in some of the videos in our Uncontested Divorce Courses and future posts will discuss this in more detail as well.
The good news is you and your spouse agree on which property items are community property and separate property and skip all the expense of experts. Additionally, in an Agreed Texas Divorce, the judge doesn’t even care how the property is divided and what is claimed as community or separate property. As long as both spouses have approved the Final Decree of Divorce, the Judge is going to approve it (provide there are no issues with child custody, child support, or other matters to consider). If you and your spouse are doing your own Texas Divorce with our Forms, you can save all that extra money that would otherwise be spent on divorce lawyers and experts. The only thing you have to be mindful of is properly completing the community & separate property sections of the Texas Divorce forms. Unfortunately for many Texas residents that represent themselves by preparing their divorce forms they obtained online from other sources is that the community property and separate property if the marital estate are not properly divided or confirmed which usually requires them to retain a divorce attorney anyways post divorce to attempt to fix the problem, if it can be fixed at all. So, completing your Texas Divorce Forms accurately is vital in every case, and our videos will guide you through this process.
The main thing to take away from this post is that before making any agreement with your spouse, spend some time determining the “character” of all property. That is, identifiy what property in the Marital Estate is community and separate property. In our online courses, we provide several videos known as our “Overview of Texas Divorce Laws Videos” that are approximately 2 hours in length, and they will help in evaluating the character of your property. Just in case you are wondering, it is possible to have a “mixed character asset” which means that a certain piece of property in the Marital Estate is part community and part separate property. And, this is when things get even more complicated if the spouses can’t figure out a way to handle the division of the estate themselves. If you can’t figure it out, and you and your spouse are moving towards a contested Texas Divorce, you’ll probably need to consult a Texas Divorce Lawyer to help you. Just realize that Divorce attorneys often propose the most expensive methods to divide the marital estate. While their proposed methods might be correct “text book” methods, that doesn’t necessarily mean the method is cost effective or even necessary to reach an amicable and fair solution. For instance, just because an item of property is “separate” doesn’t mean the spouse that technically owns it cannot give up his/her interest in it if that helps get a deal done. Keeping communication open with your spouse even during a contested Texas Divorce will help in resolving the case. Additionally, always question your divorce lawyer as to other cost effective options available instead of giving the attorney a “blank check” in handling your case.
There are many creative ways to reach a fair agreement, but before you start to worry about what’s fair, make an inventory of all the property in your marital estate and determine its character. After that, it’s just a matter of sorting out the community property from the separate property. Even then, all of this is up for negotiation between you and your spouse in order to reach an agreement. Note that a good negotiation first starts with a sufficient understanding of the marital estate and what claim each party has to specific items of property.