EP 243 Community Property in Texas Family Law with Dannielle Simms of SimmsLawGroup.com
Texas Attorney Dannielle Simms of Simmslawgroup.com joined Mac Pierre-Louis of Macpierrelouis.com to community property in Texas divorces, as defined in Texas Family Code Section 3.002. They discussed the nuances of community property and related concepts in Texas family law during divorce proceedings, clarifying misconceptions about property division and debt responsibilities, and emphasizing the importance of financial transparency in marriages. Read full transcript below.
Transcript
0:02 Community, property, in Texas family law with Attorney Dannielle Simms, that is your topic for today.
0:10 Welcome to the Lawyers and Mediators International Show and Podcast, where we discuss law and conflict resolution topics to educate both professionals and everyday people.
0:20 Catch regular episodes on YouTube, and any way you get your podcast.
0:24 Just remember, nothing in these episodes constitutes legal advice, so be sure to talk to a lawyer, as cases are fact-dependent
0:36 Hey, everyone.
0:37 This is Mac Pierre-Louis, Attorney, mediator, arbitrator, and welcome back to Lmipodcast. com, where we talk about law and conflict issues and topics.
0:44 Today, I’m back with attorney Dannielle Simms.
0:47 Danielle, how are you doing today?
0:48 I’m doing well.
0:49 How are you?
0:50 Good, good, good.
0:51 And so, Dannielle, welcome back.
0:52 And last time we spoke on geographic restrictions and Texas family law, now we’re going to switch the topic to talk about community property and Texas family law.
1:01 And I know that this is a passion for you because of the fact that you know you work with all kinds of divorce issues involving separate property, community property,
1:14 stuff involving 50 50 division of assets.
1:17 But we’re going to go through all these terms today.
1:20 But before we do, Danielle, take about a few seconds and just tell us a little bit more about yourself and where you are and what you do.
1:26 Okay.
1:27 My name is Dannielle Simms.
1:28 I am a native Houstonian, however, my parents are from the Caribbean specifically.
1:33 Jamaica and Dominica, and no, Dominica is not the Dominican Republic, it’s its own little island.
1:38 I’d be remiss if I didn’t tell you all that.
1:40 A little bit about myself.
1:42 I have been practicing law since about 2013, specifically family law since about 2015, 2016.
1:50 I do a lot of work involving divorces, custody.
1:54 In addition to that, I do a lot of work involving the Texas Department of Family and Protective Services.
1:59 More specific.
2:00 Let me call it this, CPS for those of us who don’t really understand the acronyms.
2:05 It’s CPS and that’s what most people are used to.
2:08 So I do a lot of defense work for parents.
2:10 I do a lot of representation of children.
2:12 I do a lot of representation of foster parents.
2:15 And as part of that, you know, there is the whole aspect of family law, which I enjoy and that’s what I do.
2:21 And that’s what I have found myself in.
2:25 Yes. And so Daniel, I know you are academic of sorts because you’ve actually studied the weeds of these things, right?
2:34 So let’s start off with overall, what is community property in Texas divorces?
2:41 That word is very theoretical to some people.
2:44 And can you just break it down for us?
2:45 And where does it come from, community property?
2:48 So when you’re looking at Chapter 3 of the Texas Family Code, I will give you the definition of community property.
2:55 Community property as defined by section 3. 002 of the Texas Family Code, community property consists of the property other than separate property acquired by either spouse during the marriage.
3:06 I hate defining words with their own words, but essentially just in a lay way, it’s what did you guys accumulate while married?
3:16 That is very important, the while married aspect because there are a lot of nuances to that and a lot of things that people misunderstand, especially when you are actually dealing with marriages
3:30 where we might be married.
3:31 but we’ve been separated a long time or we are married, but I brought things in that I already have that folks are contributing money to with the community pot.
3:42 So I think it’s imperative that people really understand what community property is as well as separate property.
3:47 Yes, and so whenever I get a new call from a client, a potential client who wants to talk about a divorce and how they’re going to be dividing their stuff, I kind of like to educate them by saying,
3:57 well, basically your community property is everything, including assets and liabilities, ie.
4:04 debts, that’s in the marriage.
4:06 And it’s presumed to be both yours because you guys became one flesh when you guys got married.
4:13 And that encapsulates it.
4:14 So John Doe Jane Doe, everything that they acquire is community property doing the marriage.
4:19 But then we have a bunch of exceptions.
4:21 So if it’s not community property, then what else might it be?
4:24 Separate property.
4:25 What is that?
4:26 So separate property, again, you will look at Section 3 of the Texas Family Code, more specifically section 3. 001, which defines separate property as, a spouse’s separate property consists of
4:40 the property owned or claimed by the spouse before marriage, property acquired by the spouse during marriage by gift, devise, or descent, and the recovery for personal injuries sustained by the
4:52 spouse during marriage, except any recovery for loss of earning capacity during the marriage. As one of the things that a lot of people don’t seem to realize is, when you come in with an asset that
5:04 was there before that date of marriage, that can be considered, that can be or is considered separate property.
5:11 When you are looking at things that have been inherited or given to you by a parent or given to you by someone else, that can be or is considered separate property.
5:20 One of the major things, ’cause my dad does a lot of PI in my office as well, and PI is personal injury.
5:27 And what you’ll see is you’ll see people get
5:30 settlements for personal injury.
5:32 Guys, a lot of times that’s separate property because that injury was specific to that individual in the marriage.
5:38 And a lot of times you’ll see people going, well, so-and-so got awarded $50,000 in that accident he was in.
5:43 Well, yes, but that is likely separate property because that injury
5:51 was specific to that individual.
5:53 Yeah, and so now we’ve defined community versus separate property. Now let’s move on to some of the more nuanced things.
5:59 Okay, so we hear sometimes, well, I want a 50 50 division.
6:03 Okay, you hear that phrase a lot and there’s an assumption or presumption out there by people who think, well, if you’re going in the marriage, you build wealth together, you create an estate
6:14 together.
6:15 When the divorce is gonna happen, then the estate should be divided 50 50, exactly down in the middle.
6:20 Is that true?
6:21 No. Okay, so what does the law actually say?
6:24 The law is talking about when a court is making a decision or a determination on how to divide your assets or your community property, the court is looking for a just and right division.
6:35 Just and right does not always mean 50 50.
6:38 Sometimes it does mean 50 50.
6:39 Sometimes it means, hey, you guys are gonna walk out on equal footing or it’s best to equal footing as we possibly can.
6:45 Sometimes it means, let me look at the facts of this case, not even just the characterization of your property, but what led to the divorce?
6:53 What were the behaviors over the course of the marriage?
6:55 What did you come into the marriage with?
6:58 What did you contribute from that marriage to your separate property?
7:01 What did your separate property contribute to that marriage?
7:04 And how do we make you walking away with whatever assets or whatever division we need to make?
7:10 How do we make that just and right?
7:13 Just and right does not always equal 50 50 and people need to understand that.
7:16 Just and right, just because you define it as, well, what I walked in with, I wanna leave with, that doesn’t make it just and right either.
7:23 So these are some things that we hear a lot.
7:25 We might hear somebody say, well, you know what?
7:28 That’s mine during the marriage.
7:29 I paid for that, okay?
7:31 Oh, or I hear this a lot.
7:33 We don’t have anything together.
7:34 Right.
7:34 Okay, so let’s just go through some of the things that we hear commonly stated to us as family lawyers.
7:41 But what do you think about that’s mine?
7:43 I paid for that.
7:44 Is that legal?
7:46 In a nutshell, no, that’s not legal guys.
7:49 One of the, I’ll tell you this one of the things that I deal with a lot is, he or she didn’t pay for anything, right?
7:55 I paid all the bills on that house, so it’s mine.
7:58 I paid all the bills, she didn’t pay anything.
7:60 Well, in the beginning of this, you mentioned that marriage is a coming together.
8:06 It’s a, there’s a consideration that you guys are one flesh, all of that stuff.
8:11 I like to refer to marriage as a business arrangement as well because that’s what it is.
8:16 Marriage is financial planning.
8:18 It’s a business arrangement.
8:19 It’s also for love.
8:20 I don’t wanna be that person that’s saying that, oh, don’t get married, yada, yada.
8:24 I’m not saying that.
8:25 My parents married for 40 years.
8:27 But what I am saying is, guys, it’s a business arrangement because you also are merging assets or you’re setting up a situation where you are building an estate because once that, once you get
8:39 married, when you look at that day to marriage, the things that happen after that, I don’t care if you’re paying for it on your own.
8:46 It doesn’t matter It becomes part of the community pot because you also have to remember that historically, and thankfully we’re no longer like this, women weren’t working, they weren’t.
8:57 And so what that man was bringing home and I’m quoting that, what that man was bringing home, that was for the marriage, that was for the estate.
9:08 And so again, just because you are paying for a specific item and you see that a lot with homes, You see it a lot with houses where someone will say, Well, I paid all the bills on that.
9:19 That’s great.
9:20 What you did was you invested in that community estate.
9:23 And so everything you paid for, no, we paid for it because it’s my estate just as much as it is yours.
9:30 Yeah, so something else you might hear a lot is we had nothing together.
9:34 Is that possible in a marriage?
9:36 Just maybe if you’ve been married for a number of months and then you missed out on doing an annulment that might be the case But is that something that’s realistic, that there’s nothing in common?
9:49 No, not at all.
9:50 Not if you’ve been buying stuff after that marriage date.
9:53 Not if you’ve been earning stuff after that marriage date.
9:56 Not if you’ve been paying bills after that marriage date.
9:59 What you see a lot with that is particularly for me and I don’t know about for you, so let me know.
10:04 What I’ll see a lot of is the individual will be married and they will have split up after a year.
10:11 But they’ll stay married.
10:12 They won’t do the divorce.
10:13 And so 10 years down the line, they’ll come to me and they’ll go, hey, I want to get divorced ’cause I’ve met this new person and I want to get married again.
10:21 And then they’ll tell me, well, I don’t have anything with my spouse.
10:23 The spouse that they haven’t seen in nine years.
10:26 Well, actually that house that you bought in year three after you left that person after year one, that’s still something you acquired during the marriage, right?
10:35 And so therefore it’s a community property asset.
10:38 Now, a lot of times you’ll see where the other spouse will work with the other person to not have to divide that, but you can also see spaces where it’s the exact opposite.
10:49 And it’s still community property whether we’ve been together or not.
10:52 Yeah, so this one is actually, they can become very damaging to a lot of people where they stay married, they don’t live together, they have nothing in common together.
11:04 They might have moved down with somebody else, have children with somebody else, but legally they’re still married to their spouse.
11:12 Technically under the law just by the definitions that we’ve given you today.
11:15 It’s still Half yours and half theirs and your stuff so belongs to both of you guys right as one and Imagine if one of those spouses won the lottery right would would it still be we have nothing
11:29 together anymore?
11:30 No, of course, no, most people would still want all I want that half I want my half of the lottery winnings just because at that point then it seems beneficial So that’s why we’re going to be
11:43 consistent.
11:43 Okay, the law is pretty clear about this
11:47 In other words, clean things up.
11:48 Don’t live in limbo like this.
11:51 Go to family lawyer.
11:52 Look at what your options are and clean things up Also guys when you and that person are split and there is no reconciliation There are very few times we’re staying married to that person when I say
12:07 very few almost none where staying married to that person is beneficial for you if you are
12:11 moving on with your life and acquiring property.
12:14 And like we said from the beginning, it’s about a just and right division.
12:18 So I don’t want the thought process to be that if you were to present it to a judge, it’s an automatic you are SOL per se, it’s still just and right, but you are starting from a presumption and
12:29 you’re going to have to overcome it.
12:31 Okay, let’s talk about debt, okay So you might hear somebody say then, you know, that we have community debt.
12:41 Is that a thing, because you hear that phrase a lot by lawyers even in our circles, just like you hear 50 50.
12:48 We speak about it a lot, but we got to be more nuanced.
12:52 So what is community debt or what do people mean when they say that?
12:56 So if you’re asking me what is community debt, it’s not a thing.
13:00 What people mean when they talk about that, they’re talking about the debts that are acquired during the marriage, which sounds,
13:08 Realistic right and and I get why people do it, but ultimately at the end of the day the thing about community debt per se is that when you get that Capital One credit card and you start putting
13:22 expenses for the marriage on that Capital One credit card if that Capital One credit card is under the name of Dannielle Simms Capital one is not going to go after my ex spouse. Capital One is not
13:35 necessarily going to go after my spouse.
13:38 That debt is mine because at the end of the day I made the contract with that creditor and while if you if you expect a court to award Joe Blow the credit card debt for Capital One of Danielle Sims
13:52 and Joe Blow doesn’t pay it It’s Dannielle Simms whose credit gets hit now granted in orders We generally have what’s called indemnification language meaning if a debt is not paid by you and it
14:06 impacts me I can sue you to get made whole again.
14:10 But in the meantime, my credit is getting hit.
14:13 I have to then come back to you, have to then sue you, have to start litigation all over again.
14:19 And so when people say community debt, I cringe because it’s not necessarily that.
14:23 Now, with that being said, when we’re doing our inventories, which is kind of the spreadsheet, guys, of what all of your assets are, what the debts are, do we look at the debts and go, okay,
14:33 what is Dannielle Simms walking away from because it’s in her name?
14:37 If it’s $3,000 worth of debt, we are going to give Dannielle Simms a credit in terms of how do we make her whole in other asset division?
14:46 So she’s just not walking away with a mountain of debt that she can’t escape.
14:51 And Joe Blow is walking away, sitting pretty.
14:55 We do recognize that, hey, look, at the end of the day, when I’m acquiring that debt during the marriage, nine times out of ten, it’s going to benefit my spouse, or the marital estate, or the
15:06 kids of the marriage; things of that nature.
15:09 So I need everyone to understand that the whole concept of community debt.
15:13 Stop saying that.
15:15 What I need you to look at is look, what what does the estate look like, which is going to include my debt.
15:22 And that’s kind of how we balance those things.
15:24 Yes, this one can get very hairy real fast, right, where people will
15:32 somebody will – some spouse will get into debt.
15:34 The other spouse is upset by it.
15:37 divorce ensues.
15:39 And they don’t think it’s fair that that debt in any way, shape or form, touches them somehow.
15:45 And let’s say you’re doing a divorce with a divorce when you when you do all the assets and minus all the liabilities, you come up with a negative number.
15:54 So you have a negative marital estate.
15:57 Sometimes we’re doing that.
15:58 We’re literally just dividing liabilities because there’s not a lot of stuff that’s left over.
16:06 And so what do you say to somebody like that who feels like they’re suffering from the financial decisions of their spouse who encumbered the marital mistake with so much debt,
16:17 that
16:19 marital debt
16:21 that, or the community debt that we referenced a second ago, that doesn’t really exist, is more of a statement we say, but what do we say to someone like that?
16:30 Who thinks that they’re the one who’s going to be suffering because of the decisions somebody else made to put so much debt into the marriage?
16:37 So when you’re looking at that, I do think you have to look at the facts behind it and how did we get to this debt point?
16:46 Because I can have, I have individuals who’ll come to me and say my spouse got into all of this debt and then I have to look and go, but did you benefit from those debts and in what way?
16:56 Because again, bringing us back to the beginning of this topic, it’s about just and right.
17:01 So for example, if I’m referring to that Capital One credit card, which this is not an ad for.
17:06 But referring to that.
17:07 It’s always capital one, by the way, I’ve noticed that.
17:09 Yes, but referring to that, if I’m taking that Capital One credit card and I’m shopping and that’s all I’m doing and I am getting my Birkin bag, my this, my that, and it is clear that it’s me
17:24 that is only benefiting from this or I’m spending like crazy, right?
17:29 Or you’ll see gambling debts.
17:30 If I’m doing that, we go back to what is just and right and then if I can show to a court, hey look, Joe Blow acquired all of these gambling debts and he was a chronic gambler or she spent too much
17:47 money and the money spending was just entirely frivolous.
17:52 My client should not suffer because of her inability to spend well or his gambling debts.
17:59 That’s when we get into the nuances of what is just and right. But keep in mind though.
18:06 I see a lot of times where I have clients who they spend above their means.
18:10 And it’s both of them, right?
18:12 And so I have to tell that person, well, ma’am or sir, you were in that just as much as the other person was and that’s why your estate is essentially debt.
18:22 So I can’t then turn around and go, well, it was the spouse’s fault.
18:25 Well, you were right there with them when they were doing all of this.
18:29 You had knowledge of it.
18:30 Now, when I have clients who don’t have knowledge of the other person’s spending habits or don’t have knowledge of the fact that they are gambling or doing things of that nature, it makes it
18:40 different.
18:40 Which is why everyone, it’s very important to have those hard conversations at the beginning of a relationship, not at the beginning of a marriage, the beginning of a relationship, so you can
18:50 establish who’s financially literate and who is not.
18:53 I mean, I’ll flat out tell you, I love handbags.
18:56 I love shoes.
18:57 I love things like that.
18:59 But guess what?
19:00 I’m very transparent with that.
19:06 And so for me, I know how to budget.
19:06 I know how to spend.
19:06 I know how to do things like that.
19:07 If I were a person who did not know how to do any of that, and somebody just married me and then got surprised when they saw my handbags, that those are the hard questions that you need to be asking
19:18 folks.
19:19 Because like I said, marriage while you do it for love, and you do it for children, and you do it all of those things, it’s a business, okay?
19:30 ‘Cause it’s merging of assets or the creation of an estate.
19:34 Yes, awesome.
19:35 So we went out of time.
19:37 However, I’m hoping we can come back and also do more conversations on the other things that are connected to all this topic of community property and community debt,
19:46 which is kind of weird.
19:47 So there’s keeping a home, refinancing a home, splitting up cars, there’s reimbursement claims, there’s waste claims.
19:56 There are all these things, the inventory you touched on earlier, that inventory and appraisement becomes a really big deal.
20:02 in a divorce setting, especially in front of a judge.
20:04 So there’s all these things that are connected to property division.
20:07 So it’s a really big deal.
20:07 That’s why there’s all these sections of the Texas family to discuss.
20:11 But we’re gonna leave it here for now.
20:14 Hopefully this video was informative and gave you the basics of what community property is in Texas family law.
20:20 Dannielle Simms, thank you so much.
20:22 And guys, if you want to learn more about Dannielle, of course, your website’s right there, SimmsLawGroup. com.
20:28 And hopefully people will call you up and check you out All right.
20:32 Thanks for having me back.
20:34 All right, guys.
20:34 Until next time.
20:35 Take care, everybody.
