Dividing Property

Dealing With Property in a Texas Divorce

Texas is a community property state. Community means the property belongs to both spouses. Property acquired during the marriage is community property. Even property that was acquired while domiciled outside of Texas, but being dealt with in a Texas divorce, is community property. Texas Family Code 3.003 says that property possessed at the time of the divorce filing is presumed to be community property. Presumes means a court will make an assumption about the property, until someone proves otherwise. That is an important point-when a divorce is filed, you have to take active steps to protect and keep your separate property. You must prove it. Any doubt about the property is resolved in favor if the community estate. So if your lawyer asks for deeds, receipts and other documents, get them. Quickly. This relates to my article on the discovery process. More likely than not, if a trial is pending, one party will serve requests for information about your separate property. If you do not answer them, you will not be able to bring that evidence up at the trial. One of the alligator pits of family law litigation.

Separate property is property that exists apart from the marriage.

Separate Property in Texas:

• Personal injury settlements
• Gifts
• Inheritance
• Property owned before marriage.

For example, say you own a house before you get married. When you file for divorce, the court will assume that the house belongs to both you and your spouse. The court does not know the nature of the property until you tell it. You bring the deed and mortgage documents to court to show when you bought the house. Then, the court will find that the house is your separate property. Separate property is not subject to a just and right division. In other words, separate property does not go into the “pot” to be divided up.

Gifts of Property

When talking about marriage and divorce in Texas, the issue of gifts can be complicated. Gifts to a spouse from a third party are separate property. Gifts from one spouse to another spouse are separate property. Income from a third party gift is community property. Income from a spousal gift is….separate property. So says Texas Family Code 3.005. The court will look to the spouse’s intent to figure out what is what.

What happens when a spouse uses separate property to purchase property that is used by the marriage? Well, this comes up when a spouse uses separate money to purchase or help purchase a house for the marriage. The house is often taken in both parties’ names. This creates a presumption (lots of those in family law) that the spouse using separate property money intended to give the other spouse a one-half interest in that property as a gift. The spouse who spent their separate money must beat the presumption by proof of what they intended when the transaction occurred.

Personal Injury Settlements

Personal injury settlements are separate property. EXCEPT: the part of a personal injury settlement that stands for loss of earning capacity. Texas Family Code 3.001(3).

Property Acquired by Agreement

Spouses can agree in a written agreement that certain property they have acquired or will acquire in the future, is separate property and that income or property arising from a spouse’s separate property will remain separate property. Texas Constitution Article 16, Section 15 and Texas Family Code Section 4.102. This is called a partition agreement.

Spouses can agree in a written right-of-survivorship agreement that all property subject to the agreement will become the separate property of the surviving spouse after the other spouse dies. Texas Constitution, Article 16, Section15.

During a divorce in Texas, property acquired by a spouse while domiciled in another state is considered separate property if it would have been separate property had the spouse been domiciled in Texas when it was acquired. Texas Family Code Section 7.002(b)(1). This is called “quasi-separate property.”

• Property acquired in exchange for separate property is separate property.
• Property acquired with separate funds is separate property.
• Property acquired on separate credit is separate property.