Every divorce involves the division of property and debts. The basic steps in this process are:
- Determine what is community property and what is separate property (this is called “characterization”)
- Determine the value of community property.
- Decide on a division of community property that is “fair and just.” Community property often is divided evenly but a 50-50 property division is not required and courts will frequently award one spouse more than 50% of the community property.
What property is divided in a divorce?
The court can only divide and award the “community estate” in a divorce. The community estate consists of community property and debts acquired or incurred during the marriage. A person’s separate property cannot be taken away in a divorce. Sometimes, however, people decide they must sell their separate property in order to pay debts or obligations created by a divorce.
More detailed discussions of the important topics in characterization of property can be found at:
- Characterization Rules and Presumptions
- Injury Settlements are Usually Community Property
- Characterization: 401k Plans, Pensions, Stock Options, Restricted Stock
What is Tracing?
If money that is separate property has been mixed or commingled with community funds, it may be possible to go back and trace the separate money and recover it.
Click here for a more detailed discussion of Tracing Separate Property in a Texas Divorce.
What are Reimbursement Claims?
If community funds are used to increase the value of separate property or to pay off debts on separate property, the community estate may have a right to seek reimbursement from the spouse who so benefitted. Reimbursement claims are complicated and should be discussed with a lawyer.
Click here for a more detailed discussion of Reimbursement Claims in a Texas Divorce.
When will a Judge make an uneven division of property?
The judge can award an unequal division of community assets and/or debts after considering all relevant factors that include:
- Who was at fault in breaking up the marriage
- The earning capacities and education of the parties
- The parties’ ages and health
- Any special needs of the children; and
- The separate property owned by either spouse
The two primary reasons that divorce judges will award one spouse more than 50% of the community property are a big difference in the ability to earn money in the future and really bad behavior during the marriage.
What is a “QDRO?”
A Qualified Domestic Relations Order, or “QDRO,” is a separate order signed by the judge in addition to the divorce decree which directs a pension, 401k plan, or other employee benefit plan to divide the plan benefits.