In Texas, there are two primary categories property falls into when going through a divorce. Those two categories are Community Property and Separate Property. These distinctions are incredibly important to the court when determining how to divide property during a divorce.
First and foremost, separate property cannot be divided during a divorce. This means if property is determined to be separate property, the spouse who acquired it keeps it. Community property, on the other hand, is subject to a just and right division by the court.
WHAT IS THE PRESUMPTION
So how does the court decide what’s community and what’s separate? The Family Code creates a statutory presumption that all property possessed by either spouse during or upon dissolution of marriage is community property. The presumption applies to both real and personal property.
This means that, as far as the court is concerned, all the property owned by the spouses during the marriage is considered to be community. Unless proven otherwise, all property of any kind in the spouses’ possession at the time of the divorce will be considered community property subject to a just and right division.
The next question is, “How do I show the court that my property is not community property?”
HOW TO GET AROUND IT
The community property presumption is not the final call in the character of property owned during a divorce. Once evidence of the property’s separate character is introduced, the trier of fact cannot give the community-property presumption any weight as evidence.
In other words, if you can show in court that the property is separate, you can overcome the initial presumption that it is community property. To prove property is separate one must prove that the property was Property acquired before marriage, Property acquired by devise or descent, Property acquired by third-party gift, Property or income arising from interspousal gift, Property recovered for personal injury, Property acquired by agreement, and/or Property acquired while domiciled in another state.
HOW TO PROVE IT
The party trying to overcome the community-property presumption must present clear and convincing evidence that the property is separate. The most commoan methods for rebutting the community-property presumption are the inception-of-title rule and tracing. This focuses on when legal title to the property began.
Also, if the spouses agreed for the property to be separate, the court can consider evidence of that to establish the character of the property. Property that is subject to a valid marital-property agreement takes its character from the terms of the agreement.
Lastly, it is important to know that the spouse who asserts that property is separate property has the burden to rebut the community-property presumption. If that spouse fails to prove the property is separate by clear and convincing evidence, the community property presumption controls.
The bottom line is that you must know your property rights in order to protect yourself and your property. Understanding how Texas law impacts the characterization and division of your property can mean the difference between keeping your property and losing it during a divorce.