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How a Texas divorce could affect your net worth

| Apr 30, 2020 | Firm News

Those who decide to file for divorce tend not to be thinking from a financial perspective when doing so. In the majority of cases, a divorce is filed because at least one spouse believes that they will be happier when they are no longer in the marriage. While it’s true that a newly divorced spouse is likely to become happier in the long term, it does not mean that they will be financially better off.

If you are considering filing for a divorce, it is, therefore, important that you take the time to understand how the process is likely to affect your net worth. Since assets need to be divided between spouses, it’s possible that you will lose ownership of key assets such as the primary family home or your vacation home. The following is an overview of Texas property division laws that apply to divorcing spouses so that you can gain a better understanding.

All property is classified as either separate property or community property

In Texas, it’s important that you understand how all assets will be classified. All assets that you personally owned before marriage, as well as assets you have been gifted, and inheritances you have gained, will be classed as separate property, and will belong solely to you.

Therefore, if you purchased a vacation home before you met your spouse, it will continue to be owned by you after the divorce. All assets that were acquired by either spouse during the marriage will be classed as community property.

Texas recognizes community property laws

Unlike in many other states, in Texas, community property is recognized. This means that when spouses divorce, all property that is categorized as community property will be split equally between spouses without further considerations. This means that you may not have much ability to impact the asset division process when filing for divorce in Texas.

The fact that Texas recognizes community property laws makes it especially important to correctly classify property. By ensuring that certain assets are correctly categorized as separate property, you will avoid losing additional assets. Make sure that you take early action to get the financial outcome that you deserve when divorcing in Texas.