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 Property? Texas Family Law Code, FAM 3.001: A spouse’s separate property consists of:
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The property owned or claimed by the spouse before marriage
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The property acquired by the spouse during marriage by gift, devise, or descent
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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:
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By gift
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By devise or descent
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By a partition or exchange agreement or premarital agreement specifying that the asset is separate
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As income from separate property made separate as a result of a gift, a premarital agreement or a partition and exchange agreement
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By survivorship
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In exchange for other separate property
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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.
Beware of Trusts in High Asset Marriages!
Consider the legal consequences of Trusts regarding the characterization of marital property, especially Trusts created by separate property prior or after marriage. A Trust can be a creative and useful tool depending on the perspective and actual need of the parties. To a spouse owning substantial separate property, an irrevocable Trust may be a safe haven that will guard the separate property and potentially the income from the separate property against property divisions in a Divorce Court. On the other hand, in some cases, a spouse that has no separate property may be defrauded by the other spouse.
The Texas Courts have indicated that separate Trusts created prior to marriage, that are irrevocable spendthrift Trusts are a valid means to shelter separate property of the marriage and the income from the trusts are not subject to division during the divorce proceedings. The beneficiary of the separate Trust (the spouse with the separate trust or beneficiary of a separate trust) do not have a present possessory right to any asset within the corpus of the Trusts. If the spouse is granted a present possessory right to any portion of the trust in the trusts, then the income from the Trusts may be divided in a Divorce Court as community property.
This is an area of concern to the other spouse. If you are married to an unsavory spouse, where separate property assets owned prior to the marriage are put into an irrevocable spendthrift trust, take measure to insure no money or other property acquired during the marriage is siphoned into those separate Trusts. One spouse may siphon community property throughout the marriage into separate Trusts in order to deplete the community estate. This constitutes fraud on the community estate and the innocent spouse may seek adequate compensation.
It is important to hire an experienced attorney that understand the intricacies of Trusts and the part Trusts can play in sheltering community funds from a spouse during the marriage. Many wealthy men or women may abuse the Trust formation to defraud their spouses from fair community property allocation. Wealthy spouses may use irrevocable or discretionary Trusts created prior to the marriage for asset protection instead of using prenuptial agreements or post marriage property agreements. The case law is still not completely settled in Texas regarding irrevocable Trust as they pertain to divorce and it is important to hire an attorney that can help guide you through these complexities and insure you are not being defrauded or taken advantage of in a divorce proceeding.
Spousal Maintenance Law for a Texas Divorce
The origin and basis of family law statutes and precedent in Texas were heavily influenced by the predecessor Spanish/Mexican Law prior to the formation of the Texas Republic. Spanish Law required in large measure that a husband and wife share ownership and if a divorce was granted then a 50/50 split of all property would ensue. Though there are exceptions to this, a general tenant of Texas property law states that both spouses will receive half of all the property they accrue during the marriage called “community property”, not inherited or received by gift. The influence of Spanish Law is a primary reason that for many years Texas has not favored any type of permanent alimony (also called spousal maintenance) after divorce.
In 1995 the Texas Legislature passed the first Spousal Maintenance Law that allowed a limited type of alimony. The law has been amended many times but in its current form it allows, upon proper proof, a spouse, under specific conditions to receive post-divorce money from their spouse for future support. The eligibility for Spousal Maintenance in Texas is limited and narrowly constructed.
Texas Family Code 8.051 states the requirements for a spouse to be eligible for Spousal Maintenance (alimony) as follows:
The spouse in which requests the spousal maintenance has been a victim of family violence by their husband or wife and the offense occurred:
- within two years before the date on which a suit for dissolution of the marriage is filed or;
- while the suit is pending
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The spouse seeking spousal maintenance:
- is unable to earn sufficient income to provide for the spouse’s minimum reasonable needs because of an incapacitating physical or mental disability;
- has been married to the other spouse for 10 years or longer or lacks the ability to earn sufficient income to provide for the spouse’s minimum reasonable needs; or
- is the custodian of a child of the marriage of any age who requires substantial care and personal supervision because of a physical or mental disability that prevents the spouse from earning sufficient income to provide for the spouse’s minimum reasonable needs.
The qualifications are narrow. Spousal Maintenance focuses on a spouse who has been a victim of family violence, has a mental or physical disability, or has been married for at least 10 years. The amount of money the Court will allow to be paid to a spouse monthly cannot exceed the lessor of 5,000 or 20% of a spouse’s average monthly gross income per Texas Family Code 8.005.
If you are in the process of divorce, and have been a victim of family violence or have been married for at least 10 years, then speak with an experienced attorney about the possibility of obtaining Spousal Maintenance. Spousal Maintenance is not a permanent fix but a temporary solution until you can get back on your feet. Texas Courts are hesitant in granting spousal maintenance because the spouse of a marriage generally receives half of all property accrued during the marriage. If the required extraordinary circumstances are present it is possible to receive some type of alimony for a limited amount of time.
Contact an experienced attorney that deals with matters to inform you if spousal maintenance is possibility. If you have been a victim of family violence or have been a stay at home mom for at least 10 years then you may have the ability to receive a limited form of alimony to help aid you with the daunting task of finding a new job and starting a new life.
Texas Divorce – How Long Will It Take to Get Divorced and Other Important Facts
To file for a divorce in Texas, you must be a Texas Resident for 6 months, and you must have lived within the county you plan to file in for at least 90 days immediately prior to filing of your divorce petition. Time spent by a Texas resident outside of Texas, while in the military, satisfies the residency requirement in Texas for a divorce.
Texas does not recognize legal separations.
It is possible to get a divorce even though the other party does not want the divorce to take place. Texas is a “no fault divorce state.” “No fault” means that one spouse does not have to prove the other spouse has done anything wrong in order to obtain a divorce. You cannot be held to a marriage because your spouse does not want to sign or refuses to participate in the divorce process. The court will enter divorce orders even if the other party refuses to sign them.
Texas requires a minimum 60 day waiting period before any divorce can be finalized. The 60 day period begins to run from the time the Original Petition for Divorce is actually filed with the court. In other words, the shortest time it will take to finalize a divorced in Texas is 61 days. On occasion, in domestic violence cases, there is an exception to the 60 day rule. If the parties are in agreement, a divorce proceeding can be finalized immediately following the sixty-day waiting period. On average, however, the time period is more likely to run 90 to 120 days in an uncontested divorce due to the crowding of court dockets and the time necessary for counsel to draft necessary legal documents and obtain the agreement of both parties regarding the wording of the final documents. If the parties are not in agreement, the time necessary to finalize the divorce will depend on the conduct of both parties and their attorneys, the court’s schedule, the matters in controversy and the complexity of the contested issues. From start to finish, the divorce process may go through a number of phases which might include temporary orders, exchange of financial information, psychological evaluations (in child custody cases), alternative dispute resolution, trial, and appeal. A divorce in which the parties are deeply in opposition to an agreement on some or all of the core issues may take anywhere from several months to several years to complete.
As to the division of marital assets, Texas is a community property state. For more information on community and separate property, see our blog, Divorce: What is separate property and what is community property.
It is important to remember that, although the statutory waiting period to finalize a divorced is 60 days, it is more likely than not that your divorce will “not” be finalized on the 61st day following the filing of your petition for divorce.
Divorce: What is separate property and what is community property?
Under the Texas Family Code, a spouses 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, and 3) the recovery for personal injuries sustained by the 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 mean 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.
In 1917 the Legislature defined and income from separate property to be the separate property of the owner spouse. In Arnold v. Leonard, 114 Tex. 535,273 S.W. 799 (1925), the Supreme Court held that the Legislature did not have the constitutional authority to characterize the income from separate property as the owner’s separate property. The court explained that the Legislature’s authority was limited to enacting laws regulating the management and liability of marital property, not its separate or community character. This decision strengthened the constitutional principal that the Legislature may not define what is community and separate property in a manner inconsistent with Article 16, Section 15 of the Texas Constitution.
There are numerous means by which separate property may be acquired in defiance of Article 16, Section 15, a partial list includes mutations of separate property, increases in value of separate land and personality, recovery for personal injury not measured by loss of earning power, improvements of separate land with an unascertainable amount of community funds, and United States Securities purchased with community funds.
Although such property may undergo changes or mutations, as long as it is traced and properly identified it will remain separate property.
The Texas Family Code defines community property as follows: “community property consists of the property, other than separate property, acquired by either spouse during 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 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.
