"But it's MY money!" Community Property in Texas

In all my years of handling divorce cases, I never tire of explaining community property laws to my client's. Some have done independent research on the web and know a little about community property law and others are completely blown away when I tell them that their spouse would be entitled to a portion of their retirement, or that just because their car is solely in their name doesn't make it solely theirs.

Texas, along with nine other states, are community property states. All of these states are generally located in the Western part of the United States. Community property laws were derived from the laws of Mexico, who in turn derived them from Spain. Community property law generally means that whatever you acquired during your marriage, belongs to both you and your spouse equally. It does not matter whose name is on the title or deed, if you got it during the marriage it belongs to both of you. This includes, land, vehicles, debts, bicycles, TVs, furniture, retirements, everything. There are three exceptions to this rule. If you owned it prior to marriage, if you inherited it, or if it was a gift solely to you, then the courts will consider that property your separate property, and thus not divisible at divorce. Of course you have to prove you owned it prior to marriage or that it was inherited or that is was a gift. The courts will always presume that all property you own is community property. So if you want to claim something as separate property, you must prove that is was acquired through one of the three ways mentioned.

Retirement is probably the hardest thing for people to swallow when it comes to community property law. Client's are astonished when they find out that their spouse will probably get half of their 401K. "But I am the one who worked all those years, it's my money!" Unfortunately, the State of Texas says its your spouses 401K as well.

"So that means my spouse only gets half, right?" Not necessarily. The laws in Texas governing how the community property should be divided in a divorce state, "In a decree of divorce or annulment, the court shall order a division of the estate of the parties in a manner that the court deems just and right, having due regard for the rights of each party and any children of the marriage." Tex. Fam. Code Section 7.001. Notice it did not say EQUAL manner. In other words, the courts can give one side more than the other if the judge believes that is "just and right." Why might the court give one side more than the other? There are many reasons, fault in the break up of the marriage, disparity in the earning potential of the spouses, who gets the children, length of marriage, disability of a spouse, cruel treatment by one of the spouses, and so on. Don't get me wrong, most of the time the court divides the community estate as close to 50/50 as possible. However, on occasion, the court will give one side more than the other. Rarely does the court divide the community property more than 60/40. Something really egregious would have had to happen for the court to give one side more than 60%.

So, when you head off to divorce court, remember it's not necessarily "your money." Most of the time it's "yall's money." Unless of course it's separate property, but we'll leave that discussion for another day.