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What do community property rules mean for a marital home?

Property division in a Texas divorce requires either a judge’s careful review or an agreement between spouses. Oftentimes, those pursuing a divorce or the judge presiding over a litigated divorce case will make the proper management of the largest marital assets a top focus. For example, both spouses may have invested a lot of personal effort in the maintenance and improvement of a home, and they may both have worked hard to save the down payment to buy it and to fund major projects for the property. There’s also often a very strong emotional attachment to a family’s home.

The community property laws that apply in Texas confuse many people, especially when they need to address high-value assets that they may not be able to reasonably divide, like real property. What does the community property approach to asset division in Texas mean for the home where a married couple lived together?

Marital homes are often part of a marital estate

In most circumstances, the house that a couple lives in together and pays for with marital income will be marital property when they divorce. There are many ways for the judge or the divorcing couple to handle the home.

For example, perhaps the spouses reach a mutual agreement that one of them will stay in the home because they will have more time with the couple’s children. Perhaps there are no children, and so the simplest solution would be to sell the home so the spouses can split the proceeds. Occasionally, people seek to maintain joint ownership of the home even after they divorce, but such arrangements are unusual.

Both spouses should typically receive a fair portion of the home’s equity at the very least, although sometimes they receive that value in the form of other assets rather than directly from the home itself. Despite the common assumption that there will be a 50/50 division of all assets in a Texas divorce, there is often reason to deviate from an even split when reviewing the marital property.

Neither spouse will need to stay in the home to have a right to receive some of its value during the property division process. Understanding that the value of a home and not necessarily its possession is what matters may help people establish more effective strategies when preparing for divorce in Texas.