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In a community property state ( TX ), can a spouse get one half of the equity from the home ( community property) , in the absence of a death or a divorce ?

  • So the spouse is not divorced from each other and they want half the equity in the house that is still being held as property? Or is this after a sale? – Ron Beyer Jul 9 '18 at 19:28
  • No sale, residence. Only one spouse wants half the equity. – blacksmith37 Jul 10 '18 at 0:33
  • Do they want actual cash, or just some kind of document saying that they are entitled to half the equity? I'm not sure that they would need it in a community property state. – Ron Beyer Jul 10 '18 at 2:26
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    This would depend upon the community property state and would not have a uniform answer. But, an answer is possible because a jurisdiction is provided. Even though it is a community property state, it also might matter how the property was titled and whether it was subject to a mortgage or not. – ohwilleke Jul 10 '18 at 3:08
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    "home is in both names" essentially means that the spouse already has half of it. There is nothing to "get" here any further. – Greendrake Jul 10 '18 at 5:50
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General Rule

There is generally no obligation of one spouse to cash out the other spouse from jointly titled community property real estate subject to a mortgage in Texas in circumstances other than death or divorce, in the absence of a lawsuit. Further, there is no right of either spouse to be cashed out in circumstances where the property is not sold.

Partition Actions

Either spouse could bring a "partition action", however. The right of either spouse to do this is essentially absolute in the absence of an express (probably written) agreement to the contrary. An waiver of a right to partition would occasionally be contained in a mortgage, although most mortgages don't contain a waiver of partition rights.

For some kinds of real property, a partition action is accomplished by the in kind division of real property between joint owners. But, that option is not generally available for a single family home.

Instead, if either party demanded a partition of the residence, the house would be sold pursuant to court order and the net proceeds would be distributed to the parties according to their interests in the property, which would ordinarily be 50-50, but might entail an unequal distribution if, for example, one spouse used separate property to make significant improvements or renovations to the property.

A court ordered partition sale, when it happens, is a transfer that would constitute a default under the mortgage, making it immediately due and payable out of the proceeds from the sale.

In practice, this almost never happens and instead, couples with disagreements so great that it would push them to bring a partition action would instead get divorced and have the residence handled as one asset among many in a divorce.

But, in principle, it could happen, for example, in the case of an estranged couple that has a shared moral objection to getting divorce (e.g. they are devout Catholics) who also don't want to get a full blown legal separation that is not a divorce. Or, it might happen if a guardian and conservator of an incapacitated and institutionalized spouse needed funds for medical treatment and had no other options and didn't want to seek an actual divorce or legal separation.

Alternatives To Partition Actions

In lieu of a partition action there could be a legal separation or divorce, but this seems to be precluded by the intent of the OP.

This said, nothing prevents spouses from voluntarily partitioning property or cashing out a spouse's interest in property by a mutual agreement which is suitably documented.

One spouse could also probably sell their undivided one-half interest in the property to a third-party, if they could find one (in reality an unrelated third-party would almost never agree to such a sale). But, this would also violate the terms of the mortgage making it immediately due and payable in full. How the mortgage payment would be satisfied would be tricky - the selling party might have to satisfy the entire mortgage out of the proceeds of the sale of their one-half interest at closing, subject to some sort of obligation upon subsequent partition or sale of the property for the other spouse to take a charge against the proceeds of a later sale.

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