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Understanding community and separate property in Texas

Property division in a Texas divorce often involves the question of whether certain assets are community or separate property. A basic outline of these concepts can help you gain some insight into the division process and your expectations from it.

Many cases feature specific circumstances that can complicate the ways in which courts may apply seemingly straightforward principles. Sometimes, the services of experts such as forensic accountants become necessary to ascertain relevant facts.

Presumption of community property

Generally, Texas law starts with the assumption that anything either spouse acquires during the marriage is community property. This means each spouse has a one-half interest in any such asset. A spouse who wants to argue that a particular asset does not fall within this category can rebut this legal presumption with convincing proof.

Overcoming the presumption

Even if you do have the necessary proof, consider whether the worth of the asset in question justifies the stress and expense of arguing this point. In some cases it may; in others, you may consider negotiation tactics such as proposing to keep this asset and giving up your share in another one of similar value.

Separate property

Separate property belongs to just one spouse. This category includes property the spouse acquires before the marriage. During the marriage, gifts or inheritances left to a specific spouse will remain separate, as will personal injury damage awards or settlements, except for those portions that compensate for loss or decrease of earning ability.

Effect of agreements

Spouses may also agree that an asset will remain separate even if acquired during the marriage. Generally, it is a good idea to have this agreement in writing. A valid prenuptial agreement may also contain relevant provisions, which the court will likely enforce.

One asset can be both community and separate property

Sometimes, courts will deem one part of an asset separate and the other community property. For example, one spouse may own a business before marriage but the other spouse adds value to it during the marriage. The added value may be community property and thus subject to division.

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