If you are going through a divorce in Texas, you may own real estate or other assets in another state. This can make property division more complicated. Texas courts can address these assets in a divorce, but they may face limits when an asset is subject to another state’s property and title laws.
Knowing how Texas courts handle out-of-state property can help you prepare for the property division process.
Community property laws and jurisdiction
Texas follows community property rules. In general, property acquired during a marriage is part of the marital estate unless it qualifies as separate property. During a divorce, the court must divide the marital estate in a manner it considers just and right.
The location of an asset can affect how the court handles it. A Texas court may have jurisdiction over the spouses and their marital property even when some assets are located outside Texas. However, the court generally cannot change the title records maintained by another state.
For example, if you and your spouse own a home in Colorado, the Texas court may consider that home when dividing your marital estate. The court may also order a spouse to sign a deed or take other steps needed to transfer an interest in the property. The state where the property is located, however, controls its real estate records and related procedures.
How courts handle the division process
Texas courts can use several approaches when a marital asset is located in another state. One option is to order a spouse to take specific steps to complete the property division. This could include signing a deed, transferring a vehicle title or completing other documents.
If a spouse does not follow the divorce decree, the court may use enforcement measures, including contempt proceedings, when appropriate. Texas courts retain authority to clarify and enforce their property division orders.
Another option is to offset the value of an out-of-state asset with other property. For example, suppose you and your spouse own a vacation home in Colorado. The court could award the home to one spouse while awarding other marital assets to the other spouse. The court can use this approach to divide the overall marital estate without requiring a direct transfer of the Colorado property through the Texas court.
The specific approach can depend on the type of property, how the spouses acquired it and the circumstances of the divorce.
Enforcement considerations across state lines
Enforcing a property division order across state lines can add another layer to the process. A Texas court may order a spouse to transfer an interest in out-of-state property, but completing that transfer may require compliance with the law of the state where the property is located.
For real estate, this may involve preparing and recording a deed with the appropriate local authority. Other assets may have different transfer requirements. For example, transferring a vehicle may require documents or filings with the state agency responsible for vehicle titles.
Under the Full Faith and Credit Clause of the U.S. Constitution, states are constitutionally required to recognize valid final judgments rendered by courts in sister states, though enforcement procedures follow local state law. This means a valid final Texas judgment may be recognized in the state where the property is located, while the process for enforcing that judgment may depend on that state’s procedures.
Because these requirements differ from state to state, property owners may need to address both the Texas divorce proceedings and the procedures that apply where the asset is located.
Understanding your options during a divorce
Out-of-state property does not necessarily fall outside a Texas divorce. Texas courts can address marital assets located elsewhere, but transferring or retitling those assets may require additional steps in the state where the property sits.
If you own property outside Texas, you may want to identify those assets early in the divorce process. Gathering deeds, titles, account records and other ownership documents can help establish what property is part of the marital estate and how it may be divided.
Understanding both Texas property division rules and the requirements of the state where an asset is located can help you avoid unnecessary delays and complications as you work toward a final divorce decree.