Property Division: How Does The Court Determine What Is Fair?
December 22, 2020
When it comes to the division of marital property, or property acquired during marriage, Texas divides property in a manner that is considered just and right during a divorce. In other words, the courts in the state try to be as fair as possible when making property division determinations. As this is not always easy, the court must use their discretion to divide a marital estate, relying on several factors to help with their decision-making process.
Texas is a community property state, meaning that property and assets collected and purchased during marriage are considered jointly owned. Therefore, they are divided if the couple divorces. Marital property is considered separate, community, or mixed. Today, we will review what factors the court considers when determining what is just and right when dividing marital property.
Factors The Court Considers When Dividing Marital Property
The court has broad discretion when dividing marital property. Here is a list of some of the factors that may impact the court’s decision:
Each spouse’s ability to support themselves.
Duration of the marriage.
If any spouse has exhibited bad behavior.
Each spouse’s age and physical and mental health.
Which spouse has custody of the children (if applicable)
Value of the couple’s separate property.
Disparity of earning power between the spouses.
Earning capacity of each spouse.
If one spouse was at fault for the dissolution of the marriage.
History of domestic violence or other inappropriate conduct.
Tax consequences of dividing the community estate.
Nature of the couple’s property.
How The Court Divides Marital Property
The methods the court utilizes when dividing marital property are as follows:
Award A Money Judgement
If the court cannot make a fair judgement regarding property division, it can order that one spouse receive a money judgement from the other spouse. This typically happens when the community estate cannot be divided fairly by splitting the assets down the middle, to satisfy a claim for reimbursement, or to satisfy a claim for fraud on the community property.
Divide The Property In A Fair & Just Way
Per Texas law, this process does not require splitting each piece of property in half. Instead, the court will award individual items of property to each spouse in a manner that it deems fair. The court could award a piece of property to one spouse, order them to share ownership, or even divide the property into separate shared.
Order The Property To Be Sold
Another option is for the court to order the couple to sell their community property and divide the proceeds equally. This is typically done when the other two options will not work or are determined to be impractical or unfair.
Valuing Marital Property
Before the court can divide marital property, a value must be assigned to all the couple’s assets and liabilities. The court will use what is known as fair market value and intrinsic value when doing this. Fair market value is the price the property will be when it is offered up for sale and applies to any form of property. A real estate appraiser’s services may be required during this stage.
If property has no fair market value, meaning there is no way to calculate its value, then the court will use its intrinsic value. The court may take certain factors into consideration such as the purchase price, replacement costs, condition of the property, and any other information related to the value of the property itself.