The first step in dividing the marital estate in a divorce is to identify all of the property that either spouse owns, without regard to when or how the property was acquired.
Characterize the property
The second step in dividing the marital estate involves characterizing the marital property as either community property or separate property. Community property includes any asset that was obtained during the marriage. For example, a person's earnings received during the marriage are community property so anything purchased with those earnings would also be community property. Any asset owned before the marriage or acquired through gift or inheritance would be that spouse's separate property and would not be subject to division by the divorce court. Likewise, any debt incurred during the marriage based on the spouse's credit would be a community debt. Any debt that was obtained prior to the marriage or during the marriage but where the creditor agreed to look only to the spouse's separate property for satisfaction, the debt would be separate.
Value the community property
Before a court -- or the parties in negotiations -- can assess whether a division of the marital estate is "just and right" under the law, a value must be assessed to each asset. For example, a residence or antique collection may need to be appraised. Often the marital estate will own an interest in a business entity, so the business entity will need to be valued. Pension plans can be troublesome to value because of the future time value of money. Debt values also need to be obtained.
Undertake a just and right division of the community estate
The legal standard for division of property in Texas is that the division must be "just and right". The courts are required to begin with a 50/50 division of the entire estate (assets and debts) and adjust from there based on whatever equities exist in a particular situation. Such equities may include that one spouse has a disability, or the other spouse has much greater earning capacity. Custody of children and the size of a spouse's separate estate can also be considered. The division does not have to be half of each asset. Much like a balance sheet in the business context, one asset can be awarded to one spouse and another asset can be awarded in its entirety to the other spouse with an adjustment for the value of each asset. Also, one asset may not be worth the same to a particular spouse as another asset. One spouse may value cash in the bank more highly and the other spouse may value maintaining retirement assets. All of these factors must be considered in the division.