The Enigma of Characterization of Property in Texas Family Law and Common Myths
Separate Property (SP) is property 1. owned prior to marriage, 2. acquired during the marriage by gift, devise, or descent, 3. property/proceeds acquired by the sale of SP assets 4. recovery for personal injuries sustained during marriage, except for recovery for loss of earning capacity.
Community Property (CP) is property acquired by a spouse during marriage, other than SP. There is a presumption in the law that all property is CP upon divorce. “Clear and convincing” evidence is required to establish the property is SP.
Myth – If we buy a house before we get married and subsequently marry, the house is CP because we got married. – WRONG!
Proportional Ownership Interest & Mixed Character – This interest arises when both the separate estate of a spouse(s) and the community estate of the spouse(s) have interests in property. This can occur when a party/the parties acquire property prior to marriage. If a purchase is made with SP of each party or partially with SP and partially with community credit, the separate and community estates own the property as tenants in common and each estate owns an undivided interest in the proportion that it provided consideration for the property.
Myth – If we don’t comingle accounts after marriage, the assets will remain SP. WRONG!
Maintaining separate accounts after marriage does not change the fact that income acquired during the marriage is in fact CP. (unless it is SP as described above) If there were assets in an account prior to marriage and the account maintained at least the amount that was in the account prior to marriage you could possibly claim it as SP.
Myth – If only my name is on an asset acquired during marriage (i.e. house, car) then it’s SP. WRONG!
The names on the title to property do not determine the character of the property as SP or CP.
Property cases can be fact intensive and nuances in transactions can make significant differences in the outcome. Consult with an attorney skilled in this area to insure the outcome is a correct one.
Divorce – the meticulous art of analyzing financials and foul play