Austin Property Division: Divorce Assets Explained

TL;DR / Key Takeaway

Dividing property in a Texas divorce isn’t always a 50/50 split. Assets are classified as either community (shared) or separate (owned individually). Courts in Austin divide community property in a way that’s just and right, considering fault, earning ability, health, and long-term needs. Homes, retirement accounts, and businesses add complexity, and experienced legal guidance is often essential.

What does “community property” mean in Texas?

Texas is one of only nine states that follow community property rules. That means:

• Anything acquired during marriage is presumed to belong to both spouses.
• Wages, savings, vehicles, furniture, and debts are usually all community.
• Even if only one spouse’s name is on the account or title, it can still be community property.

Example: A couple in Austin bought a home in Circle C Ranch while married, but only one spouse signed the deed. Under Texas law, that house is still community property because it was bought with marital funds.

Key Takeaway: In Texas, community property covers almost everything acquired during the marriage, regardless of who earned or purchased it.

What counts as separate property?

Separate property is narrower. It includes:

• Property owned before marriage
• Gifts or inheritances given to just one spouse
• Personal injury settlements (except for lost wages)
• Certain recoveries from lawsuits

But there’s a catch: you must be able to prove the asset is separate, usually with records or tracing.

Example: A spouse inherited a lake cabin in Burnet County before marriage. If they kept it in their own name, it’s separate. But if marital funds were used to remodel or refinance it, part of the value may be considered community.

Key Takeaway: Keep good records. Mixing (“commingling”) separate and community funds can blur the line and make it harder to claim something as separate.

Does Texas divide everything 50/50?

Not always. Courts use a “just and right” standard. That means they aim for fairness, not strict equality.

Factors judges consider in Travis County include:

• Fault in the breakup – adultery, cruelty, or abandonment may shift the balance.
• Earning capacity – one spouse may have given up career opportunities to raise kids.
• Age and health – older or ill spouses may need more resources.
• Future support needs – childcare, housing, or education expenses can affect division.

Example: A couple in Westlake divorces after 20 years. One spouse stayed home to raise children while the other built a high-earning tech career. The stay-at-home spouse may receive a larger share of community assets to balance earning potential.

Key Takeaway: Fair doesn’t always mean equal. Texas courts weigh life circumstances to decide what’s “just and right.”

How are complex assets handled in Austin divorces?

Some divorces involve more than just dividing checking accounts. High-value or unique assets need special attention.

Real estate

Homes, rental properties, and land in Central Texas often require appraisal. Market conditions, improvements, and debt all matter. Judges rely on professional valuations to ensure fairness.

Retirement accounts

401(k)s, pensions, and IRAs are community property if built during marriage. Dividing them requires a Qualified Domestic Relations Order (QDRO) and careful planning around taxes and penalties.

Businesses

If one spouse owns a business in Austin, valuation gets tricky. Accountants look at tangible assets, goodwill, and earning potential. Options include buyouts, splitting ownership, or selling.

Example: A Barton Creek couple owns a family-run restaurant. Even though one spouse runs day-to-day operations, the other may still be entitled to part of the business value.

Example: In South Austin, one spouse worked for a large employer and built up a pension while the other stayed home. Even though the pension is in just one spouse’s name, the portion earned during the marriage is community property and must be divided—often through a QDRO.

Example: A couple in Travis Heights co-owned several rental properties. During divorce, one wanted to sell while the other wanted to keep them. The court considered appraisals and income potential before approving a settlement where one spouse kept the properties in exchange for other assets of equal value.

Key Takeaway: Homes, retirement plans, and businesses need expert valuation and often legal tools like QDROs to divide fairly.

Common mistakes in Austin property division

1. Assuming titles control ownership – a car or home in one spouse’s name may still be community.
2. Mixing separate and community assets – commingling can erase the separate claim.
3. Overlooking debts – community property division also includes shared debts.
4. Ignoring tax consequences – retirement divisions and business sales can trigger tax bills.
5. Skipping disclosure – failing to disclose assets can result in penalties or fraud claims.

Key Takeaway: Transparency and documentation are critical. Courts take a hard line against hidden or poorly documented assets.

FAQs about Austin Property Division

What laws govern property division in Texas? Texas Family Code, Chapter 7 sets the rules. Assets are presumed community unless proven separate.

Does equitable division mean a 50/50 split? No. Courts divide assets based on fairness, not equality.

How can I prove separate property? Through records like deeds, account statements, or tracing methods.

What if my spouse hides assets? The court can impose penalties, reallocate property, or allow a fraud claim.

Can informal agreements cover property division? Yes, but to be enforceable they must be written and approved by the court. Spousal support eligibility is determined separately.

Does spousal maintenance affect property division? Yes, future support needs are one factor in the overall division.

Next Step

Dividing property in a Texas divorce can feel overwhelming. The rules are clear in theory, but applying them—especially with homes, retirement accounts, or businesses—requires strategy and experience.

If you’re facing property division in Austin, don’t leave it to chance. Schedule a consultation with our team. We’ll help you protect what matters and move forward with clarity and confidence.

Better Divorce Austin
Serving Travis, Williamson & Hays Counties
Austin • Round Rock • Cedar Park • Georgetown • San Marcos • Kyle • Buda
(512) 481-0330
Board-Certified Family Law Attorney