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What happens to property during a divorce?

What happens to property during a divorce?

  • October 16th, 2020
  • Cheryl McGirr
  • Comments Off on What happens to property during a divorce?

Divorce – Community and Separate Property 

What happens to property during a divorce? All property obtained or acquired during a marriage is generally deemed or presumed to be community property unless it is specifically identified as the separate property of one spouse.   

In Texas, things identified or deemed to be separate property will not be divided in divorce. 

What is community property? Anything that is not separate property! (Texas Family Law Code, FAM 3.002) 

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

The Texas Family Code requires that the Court divide the community property of the spouses in a manner that the Court deems “just and right.” This means the Court is not required to divide the property 50-50 and can consider a variety of factors in deciding what is “just and right.” These factors can include fault in the divorce, disparity in earning power, disparity in amount of separate property, etc.  

In Texas, things identified or deemed to be separate property will not be divided in divorce. In Texas, things identified or deemed to be separate property will not be divided in divorce.  However, you can’t forget that there is a presumption that everything the parties own is community property. 

Texas courts require clear and convincing proof of any separate property. 

So, what is separate property? 

A spouse’s separate property consists of:  

  • The property owned or claimed by the spouse before marriage.  
  • The property acquired by the spouse during marriage by gift, devise, or descent 
  • The recovery for personal injuries sustained by the spouse during the marriage, except any recovery for loss of earning capacity during marriage. (Texas Family Law Code, FAM 3.001) 

The terms “owned and claimed” as used in the Texas Family Code mean when the right to the property was acquired before marriage, the property would be considered separate.  

Property acquired during marriage: Property acquired during a marriage is community property unless it is acquired in one of the following ways, and it then becomes separate property of the acquiring spouse 

  • By gift – Gifts may come from anyone, including the other spouse. 
    -One of the most common examples of a gift is the engagement ring.  
    -A spouse’s parents often make gifts to their child, excluding the child’s spouse. An example of this can be a gift of real property, money, family heirloom, etc. to the child with no mention of the spouse. There is a presumption that property conveyed to a child from a parent is intended to be a gift. 
  • By devise or descent. 
    -The words devise and descent essentially mean the same thing with only a slight distinction. A devise is simply a gift of real property by the last will and testament of the donor (the person making the gift).  
    -If you receive something from the estate of someone who died with or without a will because you are related (descent), to them in some manner, that is also your separate property even if you received it when you were married. 
  • By a partition or exchange agreement or premarital agreement specifying that the asset is separate. I.e. spouses can agree in writing that something belongs to one of them alone. 
  • As income from separate property made separate as a result of a gift, a premarital agreement or a partition and exchange agreement. 
  • By survivorship. 
  • In exchange for other separate property. 
  • As recovery for personal injuries sustained by the spouse during the marriage, except any recovery for loss of earning capacity during marriage. 
    -For example, if you were injured in an automobile accident while you were married, and you received a settlement to compensate you for your pain and suffering, that is your separate property. There is an exception, however, for any recovery for loss of earning capacity during marriage. If the injuries interfered with or effected a spouse’s ability to work, any compensation for that would belong to the community. 

The characterization of property is often not as simple as the examples given above.  Sometimes, property that was initially separate property may be transformed into community property. One way this may happen is through co-mingling of separate and community property. 

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