The right of reimbursement in Texas property division

May 5 2017 - Posted by , in Property Division, Tagged in Property Division

Individuals considering divorce for the first time may have heard about the different models of property division. In most states, the theory that rules is called equitable distribution. A judge has the power to decide what is fair. The outcome might favor one spouse over the other depending on many variables.

In fewer states, including Texas, the law focuses on what the couple has acquired over the course of the marriage. The entire stock of assets and debts making up the marriage estate is community property and is typically subject to even splitting between the parties. Holdings of the individual spouses are separate estates, but they, too, can be affected in divorce. For the sake of protecting financial interestson all fronts, an attorney’s skills should be enlisted.

Non-community property could be affected

Texas code allows for the potential tapping of assets from one of the separate estates under the aegis of what’s called reimbursement. An example of how this might work follows.

Say one spouse owns the home that the couple shares during their marriage. In the course of their being together, the non-owner spouse uses funds from an inheritance or injury award to pay for improvements to the house, such as installing a swimming pool at a cost of $20,000.

Under the law, the non-owner spouse could seek reimbursement for that cost as part of the divorce. Since the pool can’t be split evenly, reimbursement serves as a means to maintain fairness in the process.

Careful accounting and handling of all estates is clearly called for to guard future security.

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