Imagine owning a beautiful truck or gorgeous sports car. It has been customized to your exact style and specifications and represents hard work, personal freedom, and even a sense of pride. Even your spouse is happy for you and wouldn’t dare drive it. But what happens when life unexpectedly turns, and divorce enters the picture? How does Texas handle vehicle ownership?
Regarding something like this, the hope is that both parties can decide who gets to keep which vehicle in the current household. And in many cases, they’ll do exactly that without issue. But we all know not everything works out so smoothly.
This is especially true in contested divorce cases where neither party wants to give an inch to the other.
Let’s learn more about how assets are divided and, in this situation, what factors impact who drives away with the keys.
First Things First—Texas is a Community Property State
The state of Texas is a community property state. This means that assets acquired during the marriage are considered community property and are subject to a “just and right” distribution. When it comes to a “just and right” division of marital property, it doesn’t necessarily mean an equal distribution. Instead, it represents an equitable and fair distribution.
That said, some assets can be considered separate property. These assets were acquired before the marriage (such as through a gift or inheritance) and are not subject to distribution.
So, Where Does Your Vehicle Fall?
Whether or not some pretty big decisions need to be made regarding your precious vehicle depends on a variety of factors:
- Is it community or separate property? Vehicles acquired during the marriage are typically considered community property. However, suppose a spouse owned a vehicle before they were married. Or, perhaps they received it as a gift or as an inheritance. In that case, it may be classified as “separate” and is not subject to distribution.
- Who typically uses the vehicle? The court will consider whether one spouse generally uses one of the household vehicles as their own. For instance, the wife may use the Tahoe, and the husband exclusively drives his Corvette.
- Is there debt associated with the vehicle? If there is outstanding debt on a vehicle, the court may consider who makes the payments and whether those payments are made with money that is considered separate from the marital estate. The court may also consider which spouse can financially handle the loan associated with that vehicle.
- What is the vehicle’s market value? This could be crucial in determining its position in the overall division of assets.
Again, it would be helpful if both parties actively participated in making the asset division part of their divorce easier and more efficient. This includes conversations about household vehicles. It may be as simple as each person keeping the car they use the most and assuming the debt associated with that vehicle.
If not, the courts must decide—and it may not be the decision you were hoping to hear.
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