Divorce is a nerve-wracking experience emotionally, physically, mentally and financially. During the process, you and your spouse will make decisions that can have a profound impact on your current and future financial well-being.

One of the first and most important decisions to make when a marriage ends is how to divide the property you own. Texas is a community property state, meaning that all assets and debts acquired during the time you were married are generally split equally in a no-fault divorce.

Marital vs. non-marital assets

When considering a divorce, spouses need to understand their financial situation and take a comprehensive inventory of assets, including:

  • Bank and investment accounts
  • Insurance policies
  • Retirement plans and funds
  • Wills and trusts
  • Real estate holdings
  • Mortgages and loan documents
  • Credit card statements
  • Motor vehicles
  • Jewelry
  • Any property owned by either party before the marriage

Courts consider a wide variety of factors

A judge will ultimately determine what marital property is subject to division and what property is deemed to be separate, namely assets acquired before the marriage. However, the court also considers several factors when dividing assets, such as:

  • Differences in earning potential
  • Benefits lost by one spouse in cases where the other is at fault
  • The health and ages of both spouses
  • The total size of the community estate
  • The size of each spouse’s separate estate
  • Anticipated inheritance one party may receive
  • Gifts given between spouses
  • Gifts given by one spouse to someone during an adulterous affair
  • Property ownership outside Texas
  • Child support and alimony obligations

Knowledge is power

Divorce can bring out the worst in some people, and even some who are considered honest will try to cheat to improve their financial outcome. The best defenses are to know as much as possible about your joint finances and consult an experienced family law attorney to help you protect your financial future.