Division of Assets During a Divorce in Texas: An Overview

Divorce can be a complex and emotional process, and one of the most contentious aspects is often the division of assets. Navigating the division of assets during a divorce in Texas can be a daunting task. Understanding the nuances of Texas law is crucial for ensuring a fair and equitable division.

Overview of Texas Divorce Laws Regarding Asset Division

Under Texas Family Code Title 1, Subtitle C, Chapter 7, the state follows a community property system. This means that most property acquired by either spouse during the marriage is owned jointly and must be divided in a way that the court deems "just and right," considering the rights of both parties and any children of the marriage (Tex. Fam. Code § 7.001). However, equitable does not necessarily mean equal. Factors such as fault in the dissolution of the marriage, each spouse's earning capacity, and future needs are considered (Tex. Fam. Code § 7.002).

Determining Community Property vs. Separate Property

Distinguishing between community and separate property is foundational in asset division. Separate property is defined under Tex. Fam. Code § 3.001 as property owned or claimed before marriage, acquired by gift, devise, or descent, and certain personal injury awards. In contrast, community property encompasses almost everything else acquired during the marriage. Proving that property is separate requires clear and convincing evidence (Tex. Fam. Code § 3.003).

Valuation of Assets

Once assets are categorized, they must be valued. This can be straightforward for bank accounts but more complex for assets like real estate, businesses, or retirement accounts. Professional appraisals may be necessary, and both parties should agree on the chosen experts to ensure the process is fair and unbiased.

Categorizing and Inventorying Assets

Creating a comprehensive inventory of marital assets is a critical step in the division process. This includes tangible items like homes, cars, and furniture, as well as intangible assets like bank accounts, stocks, and retirement plans. A detailed list helps ensure that nothing is overlooked during negotiations.

Marital Home and Real Estate Division

The marital home is often one of the most significant assets—and emotional points of contention—in a divorce. Options include selling the home and dividing the proceeds, one spouse buying out the other's interest, or, in some cases, one spouse remaining in the home for a set period (e.g., until children graduate from high school). The decision will depend on financial factors, emotional considerations, and the best interests of any children involved.

Division of Personal Property and Vehicles

Personal property and vehicles are divided based on their classification as community or separate property. The court aims for a fair division, but parties are encouraged to agree on the distribution of these items to avoid litigation costs and emotional distress.

Retirement Accounts and Investments

Retirement accounts and investments are subject to division, with courts often issuing a Qualified Domestic Relations Order (QDRO) for the distribution of retirement benefits without incurring early withdrawal penalties. It's important to understand the type of retirement account and the tax implications of the division.

Business Ownership and Professional Practices

In Texas, the division of business ownership in a divorce hinges on whether the business is considered separate or community property, as defined by Texas Family Code § 3.002. If a business was acquired during the marriage, it is likely deemed community property, making it subject to division. Therefore, you may be entitled to a significant portion of your spouse's business, potentially up to half, based on its classification.

A business owned by one spouse before the marriage is generally considered separate property and may not be subject to division. However, the increase in value of the business during the marriage and any contributions made towards the business from marital funds or efforts could be considered community property, making that portion subject to division.

The process of valuing a business for divorce purposes involves determining its current financial worth and future earning potential, often requiring expertise from valuation specialists. The court's aim is to ensure an equitable distribution, which might involve one spouse retaining the business and compensating the other with equivalent assets or, in some cases, selling the business and dividing the proceeds.

This division considers both financial and non-financial contributions to the marriage, ensuring that both parties receive a fair settlement reflective of their shared and individual investments in the business.

Debts and Liabilities in Divorce

In Texas divorces, just as assets are carefully divided, so too are debts and liabilities. The state's community property laws also apply to debts incurred during the marriage, meaning both spouses may be responsible for them upon divorce. However, the division of these obligations is not always a straightforward split.

The court examines several factors when allocating debts, including the nature of each debt, who incurred it, and the circumstances under which it was acquired. For instance, debts tied directly to the acquisition of community property, such as a mortgage on the marital home or a loan for a family car, are typically considered community liabilities. On the other hand, debts incurred by one spouse for non-marital purposes might be deemed that spouse's separate responsibility.

Mediation, Negotiation, and Litigation for Asset Division

While litigation is sometimes necessary, mediation and negotiation are often preferable for asset division. These methods can provide more control over the outcome, reduce costs, and minimize conflict. An experienced family law attorney can guide you through these options, helping to achieve a settlement that protects your interests.


Navigating the complexities of asset division in a Texas divorce requires a thorough understanding of the law, attention to detail, and strategic negotiation. By approaching the process with clear goals and the right support, you can achieve a fair and equitable resolution.

If you have questions about asset division in regards to a divorce in Texas, we're here to help. Please feel welcome to schedule a free consultation with one of our divorce attorneys at (737) 888-4883.

About the Author

Collin White is the founding owner and trial attorney of The Law Office of Collin T. White, PLLC. Collin understands that family law matters make especially difficult times for people. He is committed to making the legal process as stress-free as possible while protecting his client’s interests. He now practices primarily in Travis and counties contiguous, Texas.

This post is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting with an attorney.