Every Texas divorce begins with one question about every single asset: is it community or separate? Only community property can be divided. Separate property is confirmed to the spouse who owns it. Getting the characterization right is usually worth more than any argument about percentages.
The Presumption
Section 3.003 presumes that all property possessed by either spouse during or on dissolution of the marriage is community property. To overcome that presumption, a spouse must present clear and convincing evidence — a higher standard than the ordinary civil burden. Doubt is resolved in favor of the community.
Separate Property
Under § 3.001, a spouse’s separate property consists of:
- property owned or claimed before the marriage;
- property acquired during the marriage by gift, devise, or descent — an inheritance or a true gift;
- recovery for personal injuries sustained during the marriage, except recovery for loss of earning capacity.
Community Property
Section 3.002 defines community property as everything acquired by either spouse during the marriage other than separate property. That includes wages and salary, bonuses, most retirement contributions and growth earned during the marriage, and business income — even if only one spouse earned it and even if the account is in one name.
Inception of Title
Texas follows the inception of title rule: an asset’s character is fixed when the right to it first arises, not when it is paid off. A house bought before marriage stays separate even if community income paid the mortgage for twenty years. What the community gets in that situation is not ownership but a reimbursement claim.
Income, Growth, and Commingling
Income produced by separate property during the marriage is generally community property — rent from a separate rental house, interest, and dividends. But appreciation in the value of a separate asset usually remains separate. Section 3.005 addresses gifts between spouses, and § 3.007 supplies rules for characterizing retirement and stock plan benefits that straddle the marriage.
Commingling is where most disputes live. Deposit an inheritance into a joint account used for household expenses, and the presumption goes to work against you.
Tracing
Tracing is the process of following separate funds through accounts and purchases to prove they never lost their character. It requires documents — account statements, closing documents, gift letters, probate records — and frequently a forensic accountant. Memory is not tracing. If you expect to claim separate property, start gathering records now, because banks purge older statements.
Frequently Asked Questions
Is my inheritance safe in a Texas divorce?
An inheritance is separate property, but you must prove it with clear and convincing evidence. Commingling it into joint accounts can make that difficult.
Is my 401(k) separate because it is in my name?
No. Contributions and growth attributable to the marriage are community property regardless of whose name is on the account.
What is tracing?
Following separate funds through accounts and purchases with documentation to prove they kept their separate character despite being mixed with community money.
Texas Statutes Referenced
- § 3.001 — Separate Property
- § 3.002 — Community Property
- § 3.003 — Presumption of Community Property
- § 3.005 — Gifts Between Spouses
- § 3.006 — Proportional Ownership of Property by Marital Estates
- § 3.007 — Property Interest in Certain Employee Benefits
- § 3.008 — Property Interest in Certain Insurance Proceeds
- Chapter 3 — Marital Property Rights and Liabilities
Related Pages
Talk With a Texas Divorce Attorney
Separate property claims are won with documents. Let’s find yours while they still exist. Call 713-955-6182 or contact The De Leon Law Firm.