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Division of property starts with understanding a state's system

When a couple divorces in the state of Texas, emotional flare-ups can overshadow more seemingly mundane concerns, such as finances. However, as a couple proceeds through the divorce process, attention eventually turns to the distribution of the marital estate. Understanding property division is a task best left to professionals, though, especially in a community property state like Texas.

Despite popular misconception, a community property state does not consider every single one of a couple's assets to be community property. In addition, the Texas legal system does not simply divide assets down the middle during divorce, nor does it automatically allocate half of all assets to each party. A community property state does recognize separate property, or property owned by an individual before he or she entered into marriage. During the course of a marriage, however, some separate property may be sold, and those proceeds might be used to acquire new assets. In this type of situation, it often takes a legal expert to determine the status of the new property.

Only nine states are community property states. The next-door neighbors of Texas, New Mexico and Louisiana, share the distinction. Still, residents of Texas often hail from all regions of the country; thus, familiarity with the concept of community property is important for all married couples in the Lone Star state. Separate property that was originally acquired in other states may still be considered separate property when brought into Texas, provided those assets are identifiable and segregated from other assets.

Community property, or marital property, is usually property acquired during a marriage. However, exceptions can apply, and the division of such property can be as complex as the reasons why a marriage ends in the first place. A person's age, earning capacity, anticipated inheritance, or status as a custodial parent can all affect the distribution of community property. Consequently, Texans going through or pondering a divorce will likely require some form of guidance through the division of their property.

Source: Journal of Accountancy, "Tax considerations when dividing property in divorce," Ray A. Knight and Lee G. Knight, May 2, 2013

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Attorney Christine K. Lincoln

Christine K. Lincoln offers sound counsel and legal services to protect clients and their families facing divorce and other family disputes.

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