Like 8 other states in the United States, Texas is a community property state. (Note: The other community property states are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
In Texas, there are two types of property: separate property and community property. Whether or not a party owns any separate property can be a significant issue in the course of a divorce. To best understand the significance, it is important to understand how the Texas Family Code defines community property and separate property.
Pursuant to Section Sec. 3.002 of the Texas Family Code, community property is defined as follows: Community property consists of the property, other than separate property, acquired by either spouse during marriage.
According to Section 3.001 of the Texas Family Code, a spouse’s separate property consists of:
(1) the property owned or claimed by the spouse before marriage;
(2) the property acquired by the spouse during marriage by gift, devise, or descent; and
(3) the recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage.
The distinction between community property and separate property is significant because according to the Texas Constitution, a Court cannot divest a person of their separate property. What does this mean? It means that if you are going through a divorce, if you are able to prove that you have separate property, the Court cannot divide the separate property in a divorce proceeding. The Court can only divide community property.
According to Section 3.003 of the Texas Family Code, property possessed by either spouse during or on dissolution of marriage is presumed to be community property. For a spouse to rebut this presumption, they have to prove that property is separate property by “clear and convincing evidence,” a significantly higher standard than the usual civil burden of proof, “preponderance of evidence”.
Proving that certain property is separate property can be extremely challenging given this heightened burden of proof.
The degree of difficulty in proving that certain property is separate property is very case specific. For example, if one party owned a piece of real estate prior to their marriage, so long as they have the a certified copy of the deed that shows that that the property was acquired prior to marriage, this will be sufficient to prove that that particular piece of real estate is separate property. However, what if a party had an account with cash prior to the marriage but began depositing their pay checks in to this same account throughout the course of the marriage, how is this property characterized? This is a situation where separate property has been commingled with community property and will require a tracing report to determine which of those funds are community property and which of those funds are separate property.
In many cases, parties in a divorce are tasked with hiring expert witnesses to assist in providing the proof needed to meet this heightened standard and having the proof necessary to prove that certain property is in fact separate property.
It is important to meet with an attorney to truly understand the characterization of property. For more information, please do not hesitate to contact Trisha Dixon.