How does community property law work in Texas?

In Texas, property that is obtained throughout the marriage is community property unless it can be proved it is separate.

In the state of Texas, when a couple gets a divorce, marital assets are divided using community property laws. This can cause a great deal of confusion and people may be unsure what they can claim and how the property should be divided.

What is community property?

According to the Texas Family Code, property owned by spouses falls into two categories: community property and separate property. Essentially, property that is acquired during the marriage is considered the joint property of both spouses, unless it qualifies as separate property. This means it is under the management, disposition and control of the spouses and may include the following:

  • Family home
  • Real estate
  • Investments
  • Retirement plans
  • Vehicles
  • Bank accounts

In most cases, the Huffington Post points out that community property will be split in half between the two spouses. However, spouses may be able to change that division through a post-marital agreement if they both agree that the division does not fit their situation.

Proving a property is separate

Texas law recognizes that property acquired before the start of the marriage is the separate property of that spouse. The law also provides protection to property that a spouse may have purchased or received during the marriage if the spouse can prove the property is under his or her sole ownership and management. This proof can include recorded deeds, purchase agreements, transfer agreements and separate property agreements.

In addition, if spouses maintain a private banking account, debt and income, they may be able to keep that money protected from division. According to the Texas State Historical Association, the state assumes that income from a job or from separate property is separate unless other factors are present.

Potential complications with separate property

Inheritances, gifts from the other spouse and compensation from a personal injury settlement are considered separate property but it is important for spouses to maintain those assets as such. For example, if a spouse transferred an inheritance into a joint account to be accessed by the other spouse, it could become community property in the event of a divorce. Likewise, income that is deposited into a joint account and used by both spouses would also be counted as community property.

According to Forbes, a document that signs over property to another spouse will give that spouse control over the property. This can backfire on a spouse who puts property in the other spouse's name to avoid legal liability or taxes because they have essentially signed away their legal rights to that asset. When people in Temple have questions over the division of property in a divorce, they may find it helpful to meet with an attorney.

Keywords: divorce, community, separate, property, assets