For breadwinners of the family who are considering divorce, it can be frustrating to think that a non-working spouse may be entitled to a significant portion of your hard-earned wages. Understanding Texas community property concepts can help you move forward with the process and prepare a reasonable settlement proposal.
In Texas, wages earned during the marriage are considered community property. It does not matter which spouse performed the work to earn those wages; each spouse acquires a one-half interest in those wages earned during the marriage. Therefore, if Spouse A earns $80,000 during the marriage, Spouse B’s community property interest in those earnings would be approximately $40,000. Similarly, if Spouse B earns $50,000 during the marriage, Spouse A’s community property interest in those earnings would be approximately $25,000. This rule also applies to retirement benefits either Spouse earned through their employment during the marriage.
Keep in mind that the phrase “earned during the marriage” is key. For example, if Spouse A had $100,000 in a retirement account the day before marrying Spouse B, Spouse B would not be entitled tO a one-half community property interest in those funds. However, in a divorce proceeding, it is Spouse A’s burden to prove that the $100,000 is separate property by tracing the funds and keeping thorough documentation of the account.
Establishing this separate property interest can be a challenge when Spouse A maintains the retirement account and the value appreciates over time during the marriage.
This would result in part of the account being subject to a separate property claim, and part of it being subject to division as part of the community estate.
If you are considering a divorce, be sure to consult an attorney who has an excellent working knowledge of Texas community property laws and the exceptions to the general rules. Visit our online chat feature or call our office to request a consultation.
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