SEPARATE PROPERTY TRACING

What Is Tracing in Divorce Law?

Tracing is an integral part to the more complex practice of family law. It is the long a winding road to the truth of asset characterization. Under Texas law, property possessed by either spouse during or on dissolution of the marriage is presumed to be community property, absent clear and convincing evidence to the contrary. Tex.Fam.Code Ann. §3.003 ( Vernon ). The initial characterization of property as either community or separate is determined by the inception of title to the property. Smith v. Smith, 22 S.W.3d 140, 145 (Tex.App.-Houston [14th Dist.] 2000, no pet.) (op. on reh'g). The major consideration in determining the characterization of property as community or separate is the intention of spouses shown by the circumstances surrounding the inception of title. Scott v. Estate of Scott, 973 S.W.2d 694, 695 (Tex.App.-El Paso 1998, no pet.). Section 3.003 of the family code provides that (a) Property possessed by either spouse during or on dissolution of marriage is presumed to be community property; and (b) The degree of proof necessary to establish that property is separate property is clear and convincing evidence.

Given the presumptive characterization of the property, and the burden of proof for an effective rebuttal is clear and convincing evidence, Courts will apply a higher standard of legal and factual sufficiency review. In re J.F.C., 96 S.W.3d 256, 265-66 (Tex.2002); In re C.H., 89 S.W.3d 17, 26 (Tex.2002). Clear and convincing evidence is defined as that "measure or degree of proof which will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established." Tex. Fam.Code Ann. § 101.007 ( Vernon XXXX); Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 31 (Tex.1994). There is no requirement that such evidence be unequivocal or undisputed. Addington, 588 S.W.2d at 570. In reviewing the evidence for legal sufficiency, the tier of fact must determine "whether the evidence is such that a fact finder could reasonably form a firm belief or conviction" that the separate property characterization was proven. J.F.C., Supra at 265-66.

Who Has The Burden of Proof For Proving Separate Property?

The burden of overcoming the presumption rests squarely on the spouse claiming such property as separate. The complaining spouse must trace and clearly identify the property claimed to be separate otherwise the presumption remains and the proper shall be judicially divided. The burden of tracing is often difficult, but not impossible. Irvin v. Parker, 139 S.W.3d 703, 484 (Tex.Civ.App.- Fort Worth 1977, writ ref'd n.r.e.); Latham v. Allison, 560 S.W.2d 481, 484 (Tex.Civ.App.- Fort Worth 1977, writ ref'd n.r.e.). Tracing involves establishing the separate origin of the property through evidence showing the time and means by which the spouse originally obtained possession of the property. Nelson v. Nelson, S.W. 3d, 2006 Wl 771378, (Tex.App.-Eastland 2006); Ganesan v. Vallabhaneni, 96 S.W.3d 345, 354 (Tex.App.-Austin 2002, pet. denied). Separate property will retain its character though a series of exchanges so long as the party asserting separate ownership can overcome the community presumption by tracing the assets on hand during the marriage back to property that, because of its time and manner of acquisition, is separate in character. Invin v. Parker, Supra; Cockerham v. Cockerham, 527 S.W.2d 162, 168 (Tex.1975). Yet when evidence shows that separate and community property have been so commingled as to defy re-segregation and identification, the community presumption prevails. Hanau, 730 S.W.2d at 667. It is also not enough to show that separate funds could have been the source of a subsequent deposit of funds. Latham v. Allison, supra.

Method Of Tracing Separate Property In Texas



Although not universally adopted by all lawyers, Tracing can be loosely broken down into six sub-types (Click On Each Type To Read More): 

• Community Out First Rule ;
• Minimum Sum Balance ;
• The Clearinghouse (a/k/a Identical Sum Inferences) ;
• Pro Rata Division ;
• Item Tracing ; and
• Value Tracing . 

Our Dallas lawyers specialize in divorce, property division and property tracing. Our staff strives to build strong relationships with our clients in order to appreciate their best interests and help them achieve their family law goals. Whether you're facing the burden of a divorce, battling for custody of your child, excitedly anticipating an adoption, or looking to amicably resolve a dispute, we want to be there with you, clearing the way and lightening the load. With attorneys certified by the Texas Board of Legal Specialization in Family Law and over a decade of experience litigating family law disputes, the Wilson Legal Group is specially equipped to meet your needs and address the particular concerns of divorce property division.