Month: November 2014

WHAT IS SEPARATE PROPERTY?

When two people are married all the property the couple owns will be either community property or separate property.  In my last blog I gave an overview of what constitutes community property, so for this blog I wanted to complete the picture and provide some basic information on what is considered separate property.

Generally, speaking separate property is property that is wholly owned by only one member of the marriage.  Separate property can either be property that one spouse owned before they got married or it can be property one spouse received during the marriage by way of gift, devise (by will), or decent (by inheritance without a will).  Property is classified as either separate or community property at the moment it becomes the property of one of the spouses.  This is called the inception of title rule.  This straightforward rule can produce some confusing results.  For instance, income that is earned from a spouse’s separate property, like rental income for a house the spouse owned before marriage, is community property.  This is because that income was acquired by the couple during the marriage and thus meets the law’s definition of community property.

Once a piece of property is classified it will remain either separate or community property until the couple either divides the property through a post-nuptial agreement, a Court divides the property through a divorce, or a spouse makes a gift to the other spouse.  Under Texas law, all the property of both spouses is presumed to be community property.  That means if one spouse owns separate property, that spouse bears the burden of proving that the property is their sole separate property.  Proving that a particular piece of property is one spouse’s separate property often requires clear records for that property that go back to the time the property was acquired.  If you believe you own significant separate property and you are contemplating a divorce, it will be important for you seek the assistance of legal counsel to help you prove that your property is, and more importantly has remained, your separate property.

WHAT IS COMMUNITY PROPERTY?

Texas is known as a “community property” state.  Many people that come into my office and are thinking about divorce, have heard the term community property but don’t know what community property really means.

Generally speaking, community property is property that each member of the marriage owns an undivided interest in.  Both the wife and the husband have an equal ownership interest in a marriage. At the time a divorce is entered, this property must be divided between the parties and becomes each of the parties separate property.  Often times, couples believe that if they have separate bank accounts they still have separate property.  This however, is not the case.  This can be confusing because Texas law allows for a husband and a wife to exercise sole control of community property even though both spouses technically own the property.

Under Texas law, all property acquired during marriage is presumed to be community property.  Separate property is made up of the parties property they owned before the marriage or property they received during the marriage through gift, devise, or decent.  Thus, all property the couple owns is either separate or community property.  Additionally, community property can be solely controlled by either the husband or the wife, but this does not define if it is separate or community property.  What defines the properties statues is how and when the property was acquired.  For example if the husband, while married, takes the wages from his job and deposits them into a bank account solely in his name, that property is subject to his sole control.  However because that property was acquired during marriage and was not acquired by gift, decent, or devise it is considered community property that both the husband and wife hold an undivided ownership interest in. Even though the property came from the husband’s job, and it is kept in a bank account solely in the husband’s name, the property belongs to both the husband and his spouse as community property.