Car issues in a Texas divorce? Read this blog post to find some peace of mind (2023)

FAQs

Who gets the car in a divorce in Texas? ›

Texas is a community property state, which means that all joint assets are generally divided on a 50/50 basis in a final divorce settlement.

In the lease purchase situation, the automobile will be an asset and its value gets added to the marital assets. However, the remaining payments and any final buyout amounts get added to the marital debts.

The car is considered a marital asset and is owned by both parties. Similarly, if there is a car loan associated with the car, then, although the car loan may be in one party's name, the loan is considered a marital liability and will need to be considered in the divorce.

Texas does not recognize legal separation. However, separation for a period of at least three years is one of the grounds for divorce in Texas. Living separately and apart means living in different residences.

A car purchased on credit during the marriage is community property. A divorce court can award the car (and balance owed) to one spouse, but does not have the power to remove the other spouse's name from the contract that created the debt. The creditor can still look to the other spouse for payment.

What do you do? Typically, the only way to get your name off the loan is for your spouse to refinance it in his or her name alone. If your spouse can't qualify for an auto loan by him or herself, or if he or she refuses to refinance the auto loan, it's worth the time to speak with a lawyer about your options.

There are various sources to help you find out the value of your used car; three popular sources are Kelley Blue Book (kbb.com), National Automotive Dealers Association, and Edmunds. Different factors will affect the value of your vehicle such as the mileage, the condition, your location, and the color of the car.

Depreciation is the difference between a car's value when you buy it and when you come to sell it. This drop in value varies between makes and models but typically is between 15-35% in the first year and up to 50% or more over three years.

Actual cash value (ACV)

It is determined by the replacement cost of your vehicle minus depreciation, which considers things like age and wear and tear. Most insurance policies cover the actual cash value of your car in the event of a claim and will use a third party to determine the ACV of your vehicle.

A financed vehicle can be considered an asset but only if its value is greater than the amount you owe on it. For example, if you have a car that is worth $10,000, and you owe $5,000 on it, the value of the asset as a whole would be $5,000.

Is a car an asset on a balance sheet? ›

In accounting terms, your car is a depreciating asset. This means your vehicle may have value right now and you could sell it. However, while you own the car, that value usually goes down over time.

Yes and no. The vehicle itself is an asset, since it's a tangible thing that helps you get from point A to point B and has some amount of value on the market if you need to sell it. However, the car loan that you took out to get that car is a liability.

Abandonment laws in Texas apply when one spouse leaves the marital home without the intent of ever coming back. In addition, the abandoning spouse generally must make no effort to communicate or offer any financial support to the other spouse.

Therefore, the court may consider dating while in the middle of divorce proceedings as “adultery” even if the couple has been separated and living apart. According to Texas law, a spouse commits adultery when the relationship is of sexual nature.

Thus, the average total cost of divorce in Texas is about $15,000 if no children are involved and $23,000 if child-related issues must be resolved.

Cars, jewellery, money, investments and pensions are all matrimonial property, even if owned by one party to the marriage, as long as they are acquired during the marriage and before the relevant date.

In the usual course, the family home, chattels, cars, holiday homes, businesses and any other property acquired during the relationship are relationship property. Separate property is usually property owned prior to the relationship (other than the family home) or assets received by gift or by inheritance.

A car is tangible personal property, not real property, as the car presumably can be moved. Unlike a great deal of personal property, a car can be used to secure a loan.

In most states, the estate and surviving auto loan co-signers are the ones held responsible for paying off the remaining auto loan balance. If there are no co-signers on the loan and the estate can't pay it off, a surviving spouse, relatives, or other beneficiaries won't be responsible for paying off the debt.

As long as both names are on the current car loan, no matter the situation of who's using it or which account the payments come out of, both parties are equally responsible for the full amount of the loan so it's better to clear it up!

How do I remove my spouse from my car loan? ›

If you bought your car outright or your finance contract is fully paid up and finished, you're the legal owner of the car. If there's still an outstanding balance on your car – you have finance to be paid or a balloon payment coming up – then you're only the registered keeper.

You reach positive equity on a car once the market value of your car surpasses the principal amount of your loan. Let's say you take out a $20,000 loan for a $25,000 car, and you made a $5,000 down payment. If that car's current market value is $23,000, then you would have $3,000 in positive equity.

Generally speaking, the average car loses 20% of its value in the first year alone. Depreciation in most cases does slow down after the initial year, with cars losing an average of around 33% of their value after three years and almost 50% after five years.

0-30,000 miles

New cars suffer their biggest drop in value within their first year of ownership and continue to lose value sharply until their warranties run out, which is normally at around 36,000 miles or in their third year – whichever comes soonest.

Electric items in the car such as the GPS system are one of the most valuable, along with sturdy metal like the fenders. Other parts that may get you some money include the doors, catalytic converters, air bags, bumpers, wheels, tyres, rims, side view mirrors, tail lamps, and the engine.

Your aunt may be willing to sell you her old car for $100, but that doesn't mean it has a $100 fair market value. The fair market value would be what the car is worth at an auto lot or in a normal private sale.

Fair market value is the price at which the vehicle would change hands between a willing buyer and a willing seller.

Generally, the cutoff is somewhere in the 70% to 75% range. In this case, the car is considered to be a total loss except for the value of scrap metal or potentially salvageable parts. An appraiser can check the damage done to a wrecked vehicle to determine the totaled car value.

Is a bank account considered an asset? ›

Assets are things you own that have value. Your money in a savings or checking account is an asset. A car, home, business inventory, and land are also assets.

Common types of assets include current, non-current, physical, intangible, operating, and non-operating.

The bottom line, most cars are not an investment or an asset. There are however other factors involved such as pride of ownership, status, and the fact that you probably won't get work if you don't have reliable transport.

In general, most people would say that a car is an asset because it has value and can be sold for money. However, there are other definitions of assets that may not include cars. For example, some people might say that an asset is something that generates income or increases in price.

Liabilities are anything you owe money on. A car loan, home mortgage, or even child support obligations are all liabilities that should also be included in your overall net worth.

Some common examples of fixed assets include vehicles, buildings, land, furnishings, and machines.

Retirement account: Retirement accounts include 401(k) plans, 403(b) plans, IRAs and pension plans, to name a few. These are important asset accounts to grow, and they're held in a financial institution. There may be penalties for removing funds from these accounts before a certain time.

Capital assets are significant pieces of property such as homes, cars, investment properties, stocks, bonds, and even collectibles or art.

Most vehicles depreciate over time, but there are some cars that increase and appreciate in value. It's not always easy to predict which new models will become future classics and which will end up in the junkyard, but cars worth more decades later often share some common characteristics.

Marital Tort – Intentional Infliction of Emotional Distress

As discussed in a recent blog post, this is not possible in Texas as our state does not recognize this cause of action. The most common tort pursued by a married person against their spouse is a claim for intentional infliction of emotional distress.

Can I get half of my husband's retirement in a divorce in Texas? ›

Most retirement savings plans – like 401(k)s – can be divided on divorce no matter the length of the marriage. For these types of plans, the court is not required to split the retirement evenly between the spouses.

No one is required to move out during a Texas divorce

Until the property is distributed in the final divorce order, both parties have a right to be there. Whether one party should choose to move out before the divorce is finalized, however, should be the subject of careful consideration and discussion.

But Texas courts consider marital misconduct, including infidelity, in dividing the parties' community estate. Typically, fault grounds for divorce, such as adultery, are raised by the innocent spouse to gain a greater (or disproportionate) award of the community estate.

Texas Family Code section 6.003 defines “adultery” as a married person voluntarily engaging in sexual activity with another individual who is not their spouse during the marriage. However, non-sexual activities such as texting, flirting over social media, and other consented actions aren't strictly considered adultery.

In Texas, the courts presume that all property and income that either spouse obtained during the course of the marriage belongs equally to both spouses. This means that the state will equally divide the couple's assets between them in the divorce process.

1. What is the standard alimony allowance in Texas? According to Abby, “The maximum alimony – or spousal maintenance as it is referred to in Texas – the court will order is $5,000 per month or 20 percent of the spouse's average monthly gross income, whichever is less.

Texas law entitles wives and husbands alike to a just and right share of marital assets. Marital assets, or “community property,” are generally assets that either spouse acquired during the marriage. Anything classified as community property is subject to division.

In Texas, the courts presume that all property and income that either spouse obtained during the course of the marriage belongs equally to both spouses. This means that the state will equally divide the couple's assets between them in the divorce process.

You need to have your ex-spouse execute a power of attorney that allows your name to be removed from the title. Your name would be removed from the title by taking a power of attorney to the Department of Motor Vehicles.

How do I remove a spouse from my car title in Texas? ›

Divorce. If a vehicle is awarded as a result of a divorce decree, give a certified copy of the decree to your county tax office and apply for title. If the decree does not award the vehicle, a properly assigned title (where your ex-spouse signed the title over to you) will be required.

Texas Is A Community Property State

In Texas Family Code Sec. 3.002, it states that everything you acquire during your marriage – money earned, real estate purchased, and any other property obtained– is considered to belong equally to both spouses and will be divided by the Court.

Is Spousal Support Mandatory in Texas? No, spousal support is not mandatory in Texas. In the case of a divorce where a spouse is seeking spousal support, the judge will ensure that the situation meets the requirements laid out in Texas law in order to qualify for spousal support.

So even in divorce cases where one of the spouses earns a sizeable income, that is the most you can expect. In addition, you must be married a minimum of 10 years in order to qualify for spousal maintenance in Texas.”

Amount of Maintenance in Texas

Texas is unique in that, unlike many other states, the law limits the amount of support a court can order. Maintenance awards may not be more than $5000 per month or more than 20% of the spouse's average monthly gross income (whichever is less).

Refinancing is the only way to remove a co-borrower from an auto loan. However, if you want to get your name off the car loan, your ex needs to qualify for refinancing and prove they can afford the payment on their own.

In either scenario, the owner(s) and lienholder(s) have 20 days to claim the motor vehicle. If the vehicle remains unclaimed, the certificate of authority is issued on the 21st day after the notification is mailed or posted on this page.

The spouse whose name is to be removed from the title will need to sign the deed in front of any notary. This can be done anywhere in the world. The signed and notarized deed will then need to be filed with the county clerk's office in the county where the property is located.

To add another lienholder on the vehicle title, you will need the vehicle title, Application for Texas Title and/or Registration (Form 130-U) and an Additional Lien Statement (Form VTR-267).

How much is it to change a car title in Texas? ›

The title fee is $33, plus motor-vehicle sales tax (6.25 percent). There is also a $2.50 transfer of a current registration fee. If the license is not current, there may be a registration fee.

To be eligible, you must have been married 10 years or longer and meet other requirements. Social Security Spousal Benefits are based on your spouse's work history. The amount of spousal benefits may depend on the social security benefits you'll receive based on your own work history.

Real estate, personal property, financial accounts, certain retirement plans and pensions, and specific employment benefits may be divided during divorce proceedings. However, any property or asset that qualifies as a party's separate property will not be divided in a divorce case.

In Texas, it generally does not matter which party files first. However, it may still be beneficial to be the filing party. This depends on your circumstances, and every case is different. If you have any questions, you should speak with your divorce attorney about what is best for you.