Divorce is difficult enough without the added stress of figuring out who gets what. If you are going through a divorce in Texas, one of the biggest questions on your mind is probably how your property, assets, and debts will be divided. Will you get to keep your house? What about your retirement accounts? What happens to the savings you had before you got married?
At McCarty Larson, PLLC, we help families across Ellis County, Johnson County, and Tarrant County navigate property division every day. Texas is a community property state, which means the rules are different from what many people expect. This guide will explain exactly how Texas divides property in a divorce, what counts as community property versus separate property, and what you can do to protect your interests.
When you choose McCarty-Larson, you are choosing a legal team that will stand by you every step of the way.
Is Texas a 50/50 Divorce State?
Texas is a community property state, but that does not mean everything is split 50/50. Instead, the court divides the community estate in a way that is “just and right,” which can mean an unequal split depending on the circumstances. Community property includes most assets and debts acquired during the marriage. Separate property belongs to only one spouse and is not divided. The distinction between community and separate property is one of the most important and most contested issues in a Texas divorce.
Community Property vs. Separate Property
Understanding the difference between community property and separate property is the foundation of property division in Texas.
Community Property
Community property is everything acquired by either spouse during the marriage, with a few exceptions. Texas law presumes that all property owned by either spouse at the time of divorce is community property unless one spouse can prove otherwise.
Common examples of community property include:
Income earned by either spouse during the marriage. Real estate purchased during the marriage, including the family home. Vehicles bought during the marriage. Retirement accounts and pension benefits earned during the marriage. Bank accounts and investment accounts funded with marital income. Business interests started or grown during the marriage. Furniture, electronics, and other personal property acquired during the marriage. Debts taken on by either spouse during the marriage, including credit cards, car loans, and mortgages.
Separate Property
Separate property belongs exclusively to one spouse and is not subject to division in the divorce. However, the spouse claiming separate property has the burden of proving it by clear and convincing evidence, which is a high legal standard.
Separate property includes:
Property owned by either spouse before the marriage. Gifts received by one spouse during the marriage, even from the other spouse. Inheritances received by one spouse during the marriage. Personal injury settlements received by one spouse during the marriage, except for the portion that compensates for lost wages or medical bills paid with community funds. Property purchased with separate funds, as long as you can trace the funds back to a separate property source.
The Tracing Problem
One of the most common issues in property division is when separate property gets mixed with community property. For example, if you had $50,000 in a savings account before the marriage and then deposited your paychecks into that same account during the marriage, the entire account may be treated as community property unless you can trace the original $50,000 back to its separate source.
This is why financial documentation is so important in a Texas divorce. Bank statements, account records, and other documents that show the origin of funds can make the difference between keeping an asset and losing it.
How Courts Decide What Is “Just and Right”
Texas law does not require a 50/50 split of community property. Instead, the court divides property in a manner that is “just and right” considering all relevant circumstances. In practice, many divorces result in something close to an equal split, but the court has broad discretion to divide things differently.
Factors the court considers include:
Fault in the breakup of the marriage. If one spouse committed adultery, was cruel, or abandoned the other spouse, the court may award a larger share of the community estate to the innocent spouse.
Disparity in earning capacity. If one spouse earns significantly more than the other or if one spouse gave up career opportunities to raise children, the court may adjust the division to account for that imbalance.
Age and health of each spouse. A spouse with health issues or who is close to retirement age may receive a larger share of the estate to account for their reduced ability to rebuild financially.
Custody of children. The spouse who will be the primary caretaker of the children often receives the family home or a larger share of liquid assets to provide stability for the children.
Size of the separate estates. If one spouse has substantial separate property and the other does not, the court may award more community property to the spouse with fewer separate assets.
Education and future employability. A spouse who lacks education or job skills may receive a larger share to help them become self-supporting.
Wasting of community assets. If one spouse spent community funds recklessly, gambled away money, or hid assets, the court can hold that against them when dividing the estate.
Dividing Specific Types of Property
The Family Home
The family home is usually the most valuable and most emotionally significant asset in a divorce. The court has several options for handling it.
One spouse can be awarded the home and buy out the other spouse’s share. The home can be sold and the proceeds divided. One spouse can be granted the right to live in the home for a period of time, often until the youngest child turns 18, after which the home is sold. The mortgage is a separate consideration. Even if one spouse is awarded the home, both spouses may still be legally responsible for the mortgage if both names are on the loan.
Retirement Accounts and Pensions
Retirement accounts earned during the marriage are community property and are subject to division. This includes 401(k) plans, IRAs, pensions, and military retirement benefits. Dividing retirement accounts often requires a Qualified Domestic Relations Order (QDRO), which is a court order that instructs the retirement plan administrator to divide the account between the spouses.
Only the portion of the retirement account that was earned during the marriage is community property. Contributions made before the marriage or after the date of separation may be separate property.
Business Interests
If either spouse owns a business, determining its value and how to divide the community interest can be one of the most complex parts of the divorce. The business itself may be separate property if it was started before the marriage, but any increase in value during the marriage may be community property.
Business valuation often requires hiring a forensic accountant or business appraiser to determine fair market value.
Debts
Debts acquired during the marriage are generally community debts and are divided along with assets. This includes mortgages, car loans, credit card balances, student loans taken out during the marriage, and tax obligations.
The court tries to assign debts fairly, often assigning each debt to the spouse who is best able to pay it or who benefited most from it. However, creditors are not bound by the divorce decree. If both spouses’ names are on a debt, the creditor can pursue either spouse for payment regardless of what the divorce agreement says.
Protecting Your Interests in Property Division
Gather financial documentation early. The more documentation you have about your assets, debts, income, and expenses, the better prepared you will be. This includes bank statements, tax returns, retirement account statements, property deeds, mortgage documents, and credit card statements.
Do not hide assets. Texas courts take asset concealment seriously. If you are caught hiding assets, the court can award a disproportionate share of the community estate to your spouse as a penalty.
Understand the difference between title and ownership. Just because an asset is in one spouse’s name does not make it separate property. If it was acquired during the marriage with community funds, it is community property regardless of whose name is on the title.
Consider the tax consequences. Not all assets are created equal when it comes to taxes. A retirement account worth $100,000 may only be worth $70,000 after taxes are paid on withdrawals. A house with significant equity may trigger capital gains taxes when sold. Your attorney and a financial advisor can help you understand the real value of each asset.
How McCarty-Larson Can Help
At McCarty Larson, PLLC, our Texas property division attorneys help you protect what matters most during your divorce. We understand the financial and emotional stakes involved, and we work to secure a fair outcome for you and your family.
- We identify and classify all community and separate property in your estate
- We trace separate property to protect assets you owned before the marriage or received as gifts or inheritances
- We work with financial experts to value complex assets like businesses, retirement accounts, and real estate
- We negotiate property settlements that protect your financial future
- We litigate contested property division cases when negotiation is not enough
- We serve families across Ellis County, Johnson County, and Tarrant County
Ready to protect your future? Call McCarty Larson, PLLC today at (972) 775-2100 for a free consultation, or visit our Texas divorce lawyers page to learn more.
Frequently Asked Questions
No. Texas is a community property state, but the law does not require a 50/50 split. Instead, the court divides the community estate in a way that is “just and right” based on all the circumstances. Factors like fault in the divorce, earning capacity, custody of children, and the size of each spouse’s separate estate can all result in an unequal division.
Separate property includes anything you owned before the marriage, gifts you received during the marriage, inheritances, and personal injury settlements (except for lost wages). You must prove that an asset is separate property by clear and convincing evidence. If you cannot prove it, the court will presume it is community property.
The portion of your retirement account that was earned during the marriage is community property and is subject to division. The portion earned before the marriage is your separate property. A Qualified Domestic Relations Order (QDRO) is typically used to divide retirement accounts without triggering early withdrawal penalties or tax consequences.
The court can award the house to one spouse, order it sold with proceeds divided, or allow one spouse to remain in the home for a period of time. If the house was purchased during the marriage, it is community property. If one spouse owned it before the marriage, the home may be separate property, but any mortgage payments made with community funds during the marriage may give the other spouse a reimbursement claim.
Yes. Debts acquired during the marriage are generally community debts and are divided along with assets. The court assigns debts based on fairness and each spouse’s ability to pay. However, creditors are not bound by the divorce decree, so if both names are on a debt, either spouse can be held responsible for the full amount.
The timeline varies depending on the complexity of the estate and whether the division is contested. Simple cases with few assets can be resolved in a few months. Complex cases involving businesses, retirement accounts, real estate, and disputes over separate property can take a year or longer.