To have and to hold: Differences between community and separate property

While community property is eligible for division in a Texas divorce, separate property may remain with its original owner.

When couples file for divorce in Texas, there are several issues that must be negotiated and included in the settlement. One of the most difficult topics to discuss is property division. According to the American Bar Association, Texas is just one of nine states that follow a community property model of property division. Rather than consider specific details, such as each party's age and contribution to the marriage, the judge presiding over the case splits all marital assets and property in a manner that the court deems just and right. Understanding the difference between separate and community property in these cases may help people preserve some of their most valued belongings.

Separate property 101

According to Texas Statutes, separate property includes property and assets that a spouse had prior to entering into the marriage. For example, if one spouse owned property and the title of that property is in his or her name only, then that property may be considered separate. Separate property is not eligible for division during a divorce settlement. Any revenue acquired from separate property, personal earnings or personal injury compensation may also be considered community property depending on the certain circumstances surrounding the case.

There may be situations where separate property can turn into community property during the course of the marriage. For instance, if a property title is revised to include both of the spouses' names, it may then be considered community property. Similarly, any inheritance money that is deposited into a joint bank account runs the risk of becoming community property as well.

Understanding community property

When a couple decides to enter into a marital union, the property, assets and debt that they accumulate during their marriage is referred to as community property. These items may then be divided between the couple if they should file for divorce. In addition to the couple's house, cars, furniture and savings, community property may also include the following, as reported by Forbes:

  • Pensions, stock options, 401k plans, retirement accounts and life insurance policies
  • Antiques, art collections, rare coins or other valuable collection pieces
  • Country club memberships or other exclusive group associations
  • Gifts that spouses gave to one another while married
  • Tax refunds and lottery winnings
  • Intellectual property, such as royalties, copyrights and patents

It may be hard to discern the difference between community and separate property. You may be entitled to keep some of the treasures that you have acquired before, during or after the marriage. An established attorney who understands the community property laws in Texas may be able to provide vital assistance during this confusing time in your life.