Community Property Presumption – Texas

In Texas, community property consists of property, other than separate property, acquired by either spouse during marriage. What does this mean?  The answer can be complicated. The spouse claiming a certain property must trace, and clearly identify the property, as separate. TRACING involves establishing the separate origin of the property by showing the time and means by which the spouse obtained it.

Clear and Convincing Evidence of Separate Property

Property possessed by either spouse during a divorce is presumed to be community property. Clear and convincing evidence is required to establish the property as separate. This is a tough burden to meet. For example, clear and convincing evidence is what’s required for the government to remove your child from your home. Typically, civil cases only require the “preponderance of the evidence standard” — meaning the degree of proof required is greater than 50%. If the testimony is disproved or unsupported by documented evidence, the “standard” hasn’t been met.

However, separate property will retain its character through a series of changes during marriage if the property’s time and manner of acquisition establishes it as separate property.

When “tracing” separate property, it’s not enough to show that separate funds were the source of the next deposit of money. This type of guesswork is not enough evidence to prove the separate origin of property required by the Texas Family Code.

Property is characterized as “separate” or “community” when the title to the property is written. The origin of a title occurs when a party can first claim the right to it when the title is established. It is a familiar principle of law that the separate or community character of property is determined not by the claiming of the final title … but by the origin of title.

The “status” of the marital partners’ property is determined by the time and circumstances of its “acquisition.” It is therefore helpful to keep in mind what is meant by “acquired.” The term signifies the origin or inception of the right, rather than its later ripening or fruition.

Does the status of the separate property change if it is co-mingled with community funds?

Generally, when separate property and community property are commingled in a single bank account, we presume the community funds are withdrawn first — before separate funds are withdrawn. When — at the time of divorce — there there are always sufficient funds in the account to cover the separate property balance, we assume the balance remains separate property.

Characterization of property is a complicated legal issue. The tracing and method of tracing the property can have a large impact on the ultimate characterization of the property. It is important to discuss this issue with an experienced divorce lawyer.

In Closing …