Why is Separate Property Important and How to Keep it Separate in a Texas Divorce?

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PROPERTY AND DEBTS

Houston Family Law Attorneys: The issue of how to divided property and debts is one of the main issues that must be resolved in any Texas divorce proceeding.

Marriage creates three independent property estates:

1. Husband’s Separate Property
2. Wife’s Separate Property
3. Community Property

WHAT IS COMMUNITY PROPERTY AND WHAT IS SEPARATE PROPERTY?

Divorce Houston: In general, Texas Community Property is property acquired by either spouse during the marriage.

There is a rebuttable presumption that all property owned at marriage is community property.

To rebut this presumption, spouses must provide clear and convincing evidence that a asset is separate property in Texas.

Separate Property in Texas is

1. property acquired before marriage,
2. property acquired during marriage by gift, devise or descent
3. property acquired during marriage, but purchased with separate property funds

WHY DOES IT MATTER WHAT IS SEPARATE PROPERTY AND WHAT IS COMMUNITY PROPERTY?

Family Lawyers Houston: Not every asset is obviously "separate property" or obviously of the "community property." The reason why it matters what character property has in a divorce is that under the Texas Family Code:

1. Community property will be divided between the spouses because it is marital property.
2. Separate property will not be divided because it is not marital property.

Texas, courts divide a marital property in a way that is deemed to be “just and right.” As mentioned above all property possessed by either spouse at the time divorce is presumed to be community property.

If a spouse wants to rebut that presumption they must present clear and convincing evidence to prove otherwise.

Some my consults are disappointed by what community and property and separate property means for their case. However, for others it is good news.

TRANSMUTING COMMUNITY PROPERTY TO SEPARATE PROPERTY

Family Lawyer in Houston: If spouses are not careful they can turn community property into separate property or separate property into community property. This can occur by:

1. Gift or
2. Commingling

An example of turning community property into separate property by gift would be:

1. If a spouse were to add their spouse to the deed of their separate real property into a we would presume that a gift occurred. This simple act has significant consequences of making the property 50/50 separate property.

KEEPING SEPARATE PROPERTY SEPARATE

Some ways to keep separate property separate include:

1. Do not commingle Separate Property
2. Obtain either a prenuptial or post-nuptial agreement

FIRST DO NOT COMMINGLE PROPERTY

Houston Family Law Lawyer: One of the big ways some of my consults have gotten in trouble is by commingling their separate property with community property. Commingling, refers to the intermixing of the separate property with community property.

When a couple commingles assets, it becomes difficult if not impossible, to figure out what is separate and what is community property.

Texas courts presume all property possessed by the couple at the time of a divorce filing to be community property and a spouse must present clear and convincing evidence to prove to the contrary.

This is a high standard to meet, and if a spouse wants claim certain property is separate then they will want to avoid any ambiguity that commingling may create.

If assets are commingled, then it may be necessary to hire a forensic accountant to untangle the mess. This can be an expensive if it is necessary. However, this is avoidable if precautions are taken early on to clearly to not commingle separate property with community property.

Some things a couple can do to avoid commingling is to:

1. avoid jointly titling property if it was owned prior to marriage or inherited
2. maintain separate checking and savings accounts for money owned prior to marriage or inherited.
3. use separate funds to maintain separate property

PRE-NUPTIAL OR POST-NUPTIAL AGREEMENTS

Family Lawyers in Houston: Prenuptial agreements or post-nuptial can be a tool for protecting separate property in a divorce. Prenuptial agreement are a tool that can be used to control how assets will be divided during a divorce making the outcome for property division is more certain.

It is recommended that spouses seeking to keep some assets separate during a divorce create prenuptial agreements prior to marriage or a post-nuptial agreement after marriage ... Continue Reading