Characterizing and Tracing Property in Texas Divorces

Is it Community Property or Separate Property?

In divorces that occur in Texas, any property possessed by the parties is classified as either community or separate. Separate property pertains exclusively to one spouse, while community property belongs to both. During a divorce, the separate property will remain the sole property of one spouse, whereas the courts will distribute the community property in a just and fair manner. Therefore, it is vital to correctly classify all property.

As per the Texas Family Code, community property encompasses any property that either spouse acquires during the marriage, excluding separate property. Separate property, on the other hand, comprises anything that either spouse owned before the marriage, as well as any assets acquired during the marriage via inheritance, gift, or devise. Damages received for personal injuries that do not constitute compensation for lost earning capacity are also considered separate property. Furthermore, parties can define property as separate by way of a prenuptial or post-nuptial agreement.

Disputing the Character of the Property

In cases where the parties disagree on the nature of a particular property, it may be necessary to trace the title of the asset. In essence, tracing involves demonstrating how and when either party acquired possession of the property, to establish its separate character. This process typically involves following the paper trail from the time of acquisition to the date of divorce, to prove that the property was separate, based on the date the title was obtained and the source of the funds used to obtain it.

It's important to note that the separate character of property remains unchanged regardless of any sales, exchanges, mutations, or alterations in the form of the property. Consequently, tracing is often used to demonstrate that an asset retained its separate character despite changes over time. However, if a party combines community property with a separate asset, it can complicate the tracing process. If there is any uncertainty regarding the character of a property after tracing, it will likely be considered a community asset.

Speak with an Experienced Divorce Attorney

It is typical for married couples to own assets jointly, which can create difficulties when it comes to categorizing and tracing property during a divorce in Texas. The attorneys at Wilson Whitaker Rynell are equipped to advise you of your rights and help you protect your property. Our firm represents clients in divorce cases in various Texas cities, including Dallas, Austin, Houston, Fort Worth, and all cities within Dallas County, Tarrant County, Collin County, and Denton County.