Getting a Texas Divorce? Know what Marital Property is Community or Separate

Getting a Texas Divorce? Know what Marital Property is Community or Separate

In Texas, Community Property Laws apply in determining the Property Distributions to a wife and husband.  This system is employed to divide the property fairly between the divorcing couple.

What is Separate Party?  Texas Family Law Code, FAM 3.001: A spouse’s separate property consists of:

  1. The property owned or claimed by the spouse before marriage

  2. The property acquired by the spouse during marriage by gift, devise, or descent

  3. The recovery for personal injuries sustained by spouse during marriage, except any recovery for loss of earning capacity during marriage.

The terms “owned and claimed” as used in the Texas Family Code means that where the right to the property accrued before marriage the property would be separate.  Inception of title occurs when a party first has a right of claim to the property by virtue of which title is finally vested.  The existence or nonexistence of the marriage at the time of incipiency of the right of which title finally vests determines whether property is community or separate.  Inception of title occurs when a party first has a right of claim to the property.

Under Texas Constitution, Art. XVI, Section 15, separate property is defined as all property, both real and personal, of a spouse owned or claimed before marriage, and that acquired afterward by gift, devise or descent, shall be the separate property of that spouse; and laws shall be passed more clearly defining the rights of the spouses, in relation to separate  and community property; provided that persons about to marry and spouses, without the intention to defraud pre-existing creditors, may by written instrument from time to time partition between themselves all or part of their property, then existing or to be acquired, or exchange between themselves the community interest of one spouse or future spouse in any property for the community interest of the other spouse or future spouse in other community property then existing or to be acquired, whereupon the portion or interest set aside to each spouse shall be and constitute a part of the separate property and estate of such spouse or future spouse; spouses may also from time to time, by written instrument, agree between themselves that the income or property from all or part of the separate property then owned or which thereafter might be acquired by only one of them, shall be the separate property of that spouse; if one spouse makes a gift of property to the other that gift is presumed to include all income or property which might arise from that gift of property; and spouses may agree in writing that all or part of the separate property owned by either or both of them shall be the spouses’ community property.

What Is Community Property? Texas Family Law Code, FAM 3.002:  Community property consists of the property, other than separate property, acquired by either spouse during the marriage.

Texas Family Code, Section 3.003 states that all property possessed by either spouse during or at the dissolution of the marriage is presumed to be community property and that the degree of proof necessary to establish that property is separate property, rather than community property, is clear and convincing evidence.  Clear and convincing evidence is defined as that measure or degree of proof that will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established.  If property cannot be proved clearly and convincingly to be separate property, then it is deemed to be community property.

The Texas Family Code, Section 7.002, deals with quasi-community property and requires a court divide property wherever the property is situated, if 1) the property was acquired by either spouse while domiciled in another state and the property would have been community property if the spouse who acquired the property had been domiciled in Texas at the time of acquisition; or 2) property was acquired by either spouse in exchange for real or personal property and that property would have been community property if the spouse who acquired the property so exchanged had been domiciled in Texas at the time of the acquisition.

What about Property Acquired during Marriage? Property in which inception of title occurs during marriage is community property unless it is acquired in one of the following manner, in which it becomes separate property of the acquiring spouse:

  1. By gift

  2. By devise or descent

  3. By a partition or exchange agreement or premarital agreement specifying that the asset is separate

  4. As income from separate property made separate as a result of a gift, a premarital agreement or a partition and exchange agreement

  5. By survivorship

  6. In exchange for other separate property

  7. As recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage.

During a divorce, it is important that both parties know what type of property is involved in the divorce and what is separate and community property. This knowledge may determine or influence what each party will receive at the end of the settlement.

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