Texas is a community property state, so if you are contemplating a divorce or in the middle of one, you should be aware of what this entails and the effect on your property division. When two people enter a marriage, a community estate is created. This means that most of their property, assets, and debts acquired during the marriage are presumed to be assets and debts of the community estate. Conversely, there can be assets or debts that are characterized as separate property of either spouse. Separate property is generally considered to be property that was acquired before the marriage or was received as a gift or through inheritance.
It is important to clearly establish when the home was
purchased as well as where the funds came from to purchase the home. If monies
earned or received prior to marriage were used, then the party who utilized
those separate property funds could assert an equitable claim of reimbursement
against the community estate to recapture those dollars. If the home was
purchased before marriage, but was maintained by the parties after marriage,
the spouse who did not take part in purchase could, likewise, assert a
reimbursement claim against the other spouse’s separate estate on behalf of the
community to ensure appropriate credit is given to the community estate for
mortgage, taxes, and insurance payments (among other things) on one spouse’s
separate property. However, pursuing a reimbursement claim is not always a
simple exercise and requires that the party making the claim have sufficient proof
to trace the money, in reverse, such as settlement statements, closing
documents, and bank records.
If the Court weighs all the evidence and determines that the
property is clearly and convincingly characterized as separate property, then
the property itself is not subject to division in divorce, leaving only the reimbursement
claim as the method by which the community estate can receive fair credit. But
if the property is determined to be community property, you will have to come
to an agreement as to how the family home should be divided, or leave the fate
of your home in the Judge’s hands
Dividing property can be a difficult, and often emotional, aspect
of divorce. Every family is different. There is no singular “correct” answer on
how to divide the family home in divorce. Your family’s needs and your
financial situation will impact how you deal with the disposition of the family
home.
Some common solutions
you can consider are:
1.
Selling the home and dividing the proceeds
equally.
2.
Having one party buy out the other’s share of
net equity (i.e., fair market value as determined by an independent appraiser less
mortgage indebtedness and other liens).
3.
Continuing to own the property jointly.
4.
Letting one party retain ownership in exchange
for other divisible assets.
It is most common for both parties to sell all real estate
and divide the proceeds as purchasing the other party’s interest can be
expensive and unrealistic for many situations. It is important to consider the
pros and cons of each option, considering your family’s circumstances. Many
times, the parties wish to continue to raise their children in the family home
and later sell the property after the kids have finished high school. But this
option, if implemented, means you will need to remain in contact with your ex, work
together to maintain the property and ensure that the mortgage and other
expenses associated with the property are timely taken care of. This is
especially difficult with a high-conflict divorce or if you have trouble
communicating effectively and respectfully with your ex.
Additionally, maintaining a financial connection with your ex
after divorce could have a negative impact on your credit score. For example,
your mortgage debt will appear on both of your credit reports if you are both
named on the note. Also, if the party who retains ownership of the property
post-divorce fails to make mortgage payments, it can negatively affect the
other party’s credit score, limiting that party’s ability to secure and purchase
a home of their own. Similarly, if one party files for bankruptcy, the bank and
creditors may be able to seize that property in the process.
No matter how you choose to deal with your family home in
divorce, it is important that the terms and obligations are carefully and
specifically defined. Utilizing experienced legal representation to accomplish
this is highly advisable and the attorneys at Jenkins & Kamin, LLP are
prepared to serve you.
Jenkins & Kamin LLP is one of the most respected family
law firms in Texas. The firm is noted for its “team” approach by pairing
skilled attorneys, paralegals, and other support staff with clients to assist
them during difficult life transitions.
In addition to the “team” approach, Jenkins & Kamin, LLP
strives to personalize case strategies for each client, including
identification of every legal issue and effective explanation of the law with
respect to those issues. The firm
endeavors to achieve a resolution that is appropriate for each client, while
aggressively advocating on their behalf when necessary. Having a dedicated and
experienced team working with you in any family law matter is of utmost
importance to achieve the best result possible.
Jenkins & Kamin LLP represents clients in the following
aspects of family law practice: Marital Property Agreements, Divorce, Complex
Property Issues, Child Custody & Visitation, Child Support, Parentage,
Modifications, Family Law Appeals and Dispute Resolution Alternatives. To learn
more about the firm, visit http://www.jenkinskamin.com or contact one of our
offices in the greater Houston area.