Collin County divorce attorneys recognize that property division can be a very complicated and contentious part of the divorce process. In the absence of a prenuptial or post-nuptial agreement, all assets and debts of the parties must be allocated. Texas is one of nine states in the country that is a community property state; all property owned by a husband and wife is presumed to be owned by both unless and until proven to be separate property by clear and convincing evidence. 

Community property is any asset acquired by spouses during their marriage. Income, rent or interest earned on separate property during the marriage is considered community property as well, since although it derives from separate property, it is acquired during the marriage. Businesses and professional practices developed by the couple over the course of their marriage also constitute community property, and their value will be divided between the parties. The assets acquired by the parties prior to marriage, however, constitute separate property. Separate property remains with the party that brought it to the marriage.  Gifts to and inheritances by only one spouse are also considered to be separate property.  

Collin County divorce attorneys explain that the process of property division consists of four basic steps: identification, valuation, characterization, and division. Identification of what assets must be divided pursuant to the divorce is not as easy as it may seem; financial portfolios, intellectual property, brand development, and software are all examples of types of assets that can be challenging to identify. The valuation of assets can be the most contentious part of the  property division process. Obviously, the values given to various assets affect the overall settlement or award; therefore, each party has a vested interest in their value being the one that is accepted. Expert appraisals can be used to determine values, and when there is still a lack of agreement on the worth of a particular asset, the matter can be submitted to court. The court can review the evidence, request testimony, and/or additional evidence, and then make its decision.

When it comes to the third step in the property division process, characterization, the presumption of community property means that determination of what is separate property is a function of rebutting the presumption. Put another way: to prove a particular asset is separate property, one must be able to disprove it is community property by clear and convincing evidence.  For example, a party could prove that a valuable piece of art was separate property by providing the materials relevant to the date of purchase, which was prior to the marriage.  

 The last step in the process is of course, the division itself. Although Texas is a community property state, its laws do not mandate a fifty-fifty split (as e.g. California does).  Texas law allows for what is called "equitable distribution" of community property.  Under this system, a court can consider the earning capacity of each spouse, the age and health of each spouse, whether one spouse was a primary caregiver and sacrificed career opportunities, separate property owned by each spouse, and other relevant factors. 

 If you are contemplating a divorce or about to start the process, and have questions regarding the division of assets, contact the Collin County divorce attorneys at Nordhaus Walpole, PLLC.