Texas Community and Separate Property
One of the most misunderstood aspects of any divorce are questions of separate (mine or yours) versus community property (ours). That is to say, what property from our marriage belongs solely to me, solely to you, and what is ours together that we have to divide between us? In Texas, there is a presumption, which means that to begin with, it is assumed that all property of a couple is community (“ours”). At time of divorce, if you cannot prove that property is owned separately by one of the spouses, then it is community. If you can’t prove the separate character of property, it IS community.
What is Separate Property?
Separate property in Texas is defined as:
- Property owned or claimed by a person before marriage;
- Property acquired during marriage by gift or inheritance (also called by descent and devise); and,
- The recovery for personal injuries sustained by a spouse during marriage, except any recovery for loss earning capacity during the marriage.
What is Community Property?
Community property is property acquired by either spouse during the marriage. However, if property is purchased partly with community funds and partly with separate property funds, the property is what is called mixed character, part community and part separate, to the extent and in the proportion to the source of funds. For example, if you proved that 40% of the purchase price came from separate property and 60% came from community property, the property is 40% separate and 60% community.
How is Property Determined to be Separate or Community?
The characterization of property as either separate or community is determined by different legal standards, one of which is called the inception of title rule. Inception of title occurs when a party first has right of claim to the property by virtue of when title is vested in the property. For example, if a person signs a contract to buy real estate before marriage, but the closing occurs after marriage, the property is the purchaser’s separate property because the inception of title, or starting point of the ownership, began when the purchaser signed the contract.
How is Property Proved to be a Gift (and therefore separate property)?
Three elements are required to establish the existence of a gift:
- Intent by the donor to make a gift;
- Delivery of the property to the recipient; and,
- Acceptance of the property by the recipient.
If one spouse makes a gift to the other spouse, the gift is the separate property of the receiving spouse. If a third party makes a gift to both spouses, each spouse is presumed to own an undivided one-half separate property interest in the gift.
The characterization of property is a complicated aspect of Texas Family Law, and for each rule there are multiple exceptions, depending on the facts. If you have questions regarding your property rights in Texas, contact the Law Office of David S. Bouschor, II, and set up a consultation by calling 940/323-1300.