So, now we know that Texas is a community property jurisdiction and we understand the differences between community v. separate property. However, there are still lingering misconceptions about property division. Today I would like to point those out to further educate Texans on this crucial topic.
In particular, spouses should avoid common fallacies regarding the division of community property, retirement assets, and commingled property during a divorce. Without further ado, let’s dive into the three most prevalent misconceptions about property division:
“Retirement Benefits are Easily Divided”
In Texas, retirement benefits are considered community property, but dividing these assets can be significantly more convoluted. It’s crucial to note that the administrators of pension plans and certain other funds are not required to honor the terms of a divorce decree that redirects benefits to a non-employee spouse. Consequently, divorcing spouses must draft a special legal document called a Qualified Domestic Relations Order (QDRO) to ensure the proper division of retirement benefits and funds. These orders are highly specialized, so extra precautions should be taken to ensure that no mistakes are made. It would be prudent for divorcing spouses to work with an attorney who has experience dividing complex marital assets.
“Commingled Property is NOT Traceable”
Often, during the course of a marriage, spouses contribute separate property toward the purchase of community property or the reduction of the other spouse’s separate liabilities. It’s a commonly believed myth that spouses cannot recover this mixed property. On the contrary, the Texas Family Code allows spouses to file a claim for reimbursement in various situations. For example, if separate or community property was used to pay down one spouse’s separate debt, the other spouse may make a claim for reimbursement. A common scenario is when a gainfully employed spouse pays for the other spouse to attend medical school, to fulfill their lifelong dream. If this couple were to divorce after the latter spouse becomes a practicing physician, the former spouse would have a valid claim for reimbursement.
“Equitable Means Equal”
The Texas Family Code requires an equitable distribution of community property, which consists of most property that a couple obtains while married. Many people assume that this means community property will be divided equally between spouses. Nevertheless, a family law court judge may order an uneven distribution based on the factual circumstances of each case.
Due to this provision, the way that spouses present their financial standing and contributions to the marriage may be influential. A judge might award property unevenly if one spouse is significantly disadvantaged due to any of the following factors:
- Age and health
- Education, vocational skills, and earning power
- Separate assets and liabilities
A judge may also award property in an unequal manner based on other considerations, such as one spouse’s role as a caretaker or one spouse’s intentional depletion of marital property.
These three beliefs are merely a few of the potentially detrimental fallacies that Texas spouses may have about property division. To avoid further misconceptions during this process, spouses are advised to seek the advice of an experienced attorney.
I built my law practice on the premise of being a life raft in a sea of sharks. I want to be an advocate for those that have been wronged and are too intimidated to seek help. My firm is here to explore your options, guide you through your legal journey, and give you that safe space to ask questions! There’s no such thing as a stupid question…Only the ones you don’t ask. So, my question to my clients is not “do you have any questions?” But rather “what questions do you have?”
As always, the Kazi Law Firm is standing by to help you in your time of need. Don’t hesitate to contact us today. We specialize in real estate law, landlord-tenant disputes, immigration, and wills & estate planning. Family is at the core of our practice. Just as we treat our family with respect and understanding, we treat yours. Come join the Kazi Law Firm family today!
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