Understanding Community & Separate Property
When it comes to property division, Texas law maintains the presumption that any assets owned by married spouses (including a family home) are community property subject to equitable distribution. Equitable distribution means fair, not necessarily equal, and applies to all forms of community property, which include income and debts, vehicles, and other assets acquired during a marriage. Non-community property is considered separate property, and will not be subject to division in divorce.
Is My Family Home Community Property?
Family homes are typically at the core of most property division matters in Texas divorce cases, as they are commonly community property and because they are most often the largest asset owned by spouses. If your family home was purchased during the course of your marriage, it is likely that it is community property subject to division. A family home may be considered separate property not divisible in divorce if:
- The home was acquired by one spouse as an inheritance or gift;
- The home was purchased by one spouse prior to marriage; or
- Terms of a premarital or post-nuptial agreement dictate rules of property division.
Although these exceptions may mean that a family home is separate property, distinguishing separate from community property is not always so straightforward. That’s because separate property can become community property during the course of a marriage, especially if:
- The home was deeded to both spouses (such as when a home purchased by one spouse before marriage is refinanced during the marriage)
- Both spouses contributed funds to paying the mortgage of a family home, even if it was purchased by one spouse before marriage. This may also result in a reimbursement claim against the owning spouse’s separate property for payments to the principal amount of the mortgage, or to improvements of the home.
Because it may be difficult to distinguish separate and community property in divorce cases, working with a lawyer can help identify whether a family home is considered community property, or whether there are reimbursement claims against separate property homes.
Resolutions for Dividing the Community Property Family Home
Family homes declared community property are subject to equitable distribution. What happens to the home itself, however, will depend on a variety of factors. This includes whether or not spouses are able to communicate and compromise effectively to reach amicable resolutions, and what their individual goals may be. With the help of an attorney who can protect your rights, you can negotiate property division agreements for what happens to the family home that both parties agree with. In cases where spouses cannot come to an agreement on their own, the court will make determinations based on the facts of a case and evidence provided at trial by spouses and their attorneys.
Possible resolutions may involve:
- One spouse buying out the other spouse’s community property share of the home.
- One spouse being awarded possession of the family home for a specified amount of time (which may happen when spouses have minor children), with a requirement for both spouses to sell the home by a specified date.
- Both spouses being ordered to sell the home immediately and divide the proceeds.
- One spouse being awarded the family home, with the other spouse being awarded other community property assets to offset its value.
Whether resolved through out-of-court negotiations or through the court, division of the family home will result in one of two general outcomes:
- One spouse stays in the family home – One spouse may keep the family home if they wish to stay and are able to afford mortgage payments moving forward on their own. This may involve a buy-out of the other spouse’s share, or offsetting the value of the spouse’s share with other assets.
- The family home is sold and proceeds are split – If neither spouse wants to keep the family home, or are not able to afford payments on their own, it can be sold and the proceeds from the sale will be divided through either negotiated agreements or according to court orders.
Protect Your Interests with a Proven Divorce Attorney
What happens to the family home in divorce depends largely on the unique circumstances involved in your case, including the ability of spouses to reach agreements, whether or not you or the other spouse want to keep the home, and whether or not it is financially feasible for either spouse to continue making payments on their own. Because your goals and unique interests matter, it is important to work with experienced divorce lawyers like those at Boudreaux Hunter & Associates, LLC who can help discuss your options and determine how a positive resolution can be reached. To discuss property division and your divorce with a member of our team, call to request a consultation.