What does it mean to divorce in a community property state and why is Texas one of only 9 states in the country that are based on the community property system?
First, there are two types of property division in the United States when it comes to Divorce:
- Equitable Distribution; and
- Community Property.
Most of the U.S. follows equitable distribution, while only nine states are community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin).
Equitable distribution laws divide property based on who earned it during the marriage. In a divorce, the property is divided in a fair and equitable manner and the court may look at the earnings of the spouses among other factors. It is possible for a spouse the receive anywhere from one-third to two-thirds of the marital property.
In a community property state like Texas, there are two kinds of property:
- Community property; and
- Separate property.
Community property is all property that is not separate property. So then, what is separate property? Separate property is property:
- Owned by a spouse before marriage; or
- Received via gift;
- Will; or
Each spouse has a 50% interest in all community property—regardless of who paid for it or earned it.
So even if one spouse is the bread winner, both spouses have an equal interest in all community property, including salaries. This same equal interest principal also applies to community debts, which can include mortgages, credit cards, and car payments—again, regardless of who acquired the debt or the name on the credit card. Except in limited circumstances, the vast majority of property division in a community property state hovers around 50/50 for each spouse.
Now let’s address why Texas is one of a handful of states that are community property states.
Reviewing the list of community property states above, you may notice that four of them share a border with Mexico. That’s no coincidence.
Equitable distribution aligns with the English traditions of property division, which tend to favor rights of primogeniture, amongst other things. Primogeniture means the passing of an estate to the eldest male heir and the English property system greatly favored male property rights over females’. For instance up until the mid-twentieth century, when an Englishwoman married, her property (even her inheritance from her family), became her husband’s property—for better or for worse. Often times, husbands would waste and spend their wife’s inheritance without the woman’s say, because women could not legally own property back then.
In contrast, the community property system was influenced by the Spanish traditions of property division, which provided more protection for women’s property. Under a community property state, a husband could not touch a wife’s separate property and therefore not waste her inheritance or property owned prior to marriage. This provided much more protection for women than the English system and geographically, you will see that most community property states are close to the U.S./Mexico border (I’m not sure what to tell you about Wisconsin).
While the community property system may seem complex and tricky at first, the rules are actually quite simple and straightforward. If you have any questions on community property in Texas, give us a call at 214-494-9916 or visit our website at pfdallas.com.