Because Texas is a community property state, courts in Texas generally divide property equally following a divorce. However, the situation is more complicated when it comes to a house. Which spouse gets the house is largely dependent on when the home was purchased as well as where the mortgage payments are coming from. In some cases, the spouse who does not get the house will instead receive a greater portion of the remaining marital property, while the spouse with the house may receive more of the marital debt.
Community and Separate Property
Texas is a community property state, meaning that most assets acquired during the marriage are owned equally by both spouses. Courts distinguish between community property, which may be divided during a divorce, and separate property, which is not divisible. Separate property includes anything either spouse owned before the marriage as well as gifts, inheritances or recovery from personal injury lawsuits received during the marriage. If a home was purchased by a spouse during the marriage, it will likely be considered community property. However, if a spouse provides evidence that the house was purchased prior to the marriage, received by gift or inheritance, or purchased with separate assets, it may be considered separate property.
Community Property Division
If the house is considered community property, the court will consider several factors to determine which spouse should have the house, as well as how other community assets should be divided. In contrast to equitable distribution states, community property states, like Texas, assume community property should be divided equally. If the couple does not have children, neither spouse was at fault for breaking up the marriage, and each spouse has approximately equal financial resources after the marriage, the court will likely divide community property 50/50. However, this division may be adjusted based on such factors as income and income potential of each spouse and fault of either spouse. After determining the percentage of community property each spouse is entitled to, the court may ask the couple to sell the house to divide its value or will award the house to one spouse and offset its value with other assets or debts.
Inception and Reimbursement
In Texas, courts consider whether or not a house is community or separate property based on how the property was originally acquired. If one spouse places a down payment on a house before getting married, but makes mortgage payments with community assets after the marriage, the house is still considered separate property owned by one spouse. However, because community property was used to pay for part of the mortgage, the spouse who does not get the house may be entitled to reimbursement for her portion of the marital payments made on the house.
Reimbursement for Community Contributions
If a house is considered community property, but one spouse makes mortgage payments with his separate property, he may be reimbursed for those contributions before the court divides the community property. However, in this case, the contribution may be "offset" or reduced based on how the spouse benefited from the use and enjoyment of that property. The reduction is based on the value of tax deductions earned and money saved on living expenses, including rent money the spouse would otherwise have to pay if it were not for the marital home.
References & Resources
- John K. Grubb & Associates: Division Of Community Property in Texas
- Texas Legislature: Texas Family Code, Sec. 7.001. General Rule of Property Division
- The Houston Lawyer: Texas Abolishes Economic Contribution In Divorce Cases – Now What?
- Texas Legislature: Texas Family Code, Sec. 3.001. Separate Property
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