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Understanding Community Property

Yours, mine, or ours? When going through the divorce process, getting a judgment of divorce is only one step. Much more difficult can be determining how to divide the assets owned together by the spouses.

Texas is a community property state. This means that for married couples living or owning property in Texas, it is presumed that property acquired by either spouse during the marriage is property of the community and is therefore owned by both spouses equally.

There are nine states, including Texas, that are community property states and the other states are equitable distribution states. If you live in a community property state, you may be able to “opt out” of the community property regime by signing a prenuptial agreement, sometimes called a prenup.

Common examples of assets that are part of the community and shared equally by the spouses in Texas include:

  • Salary or wages received by either spouse during marriage. Also included are retirement accounts.
  • Property that you, your spouse, or both of you acquired during the marriage. For example, the marital home or cars bought during your marriage are community property.
  • Income from community property.
  • Any property that cannot be identified as being separate property.

Under Texas law, you can prove that property in the community is separate property by “clear and convincing” evidence. Common examples of assets acquired during the marriage that can be considered separate property owned by only one of the spouses include:

  • Property owned by a spouse before the marriage
  • Property inherited by a spouse during the marriage
  • Property given to one spouse during the marriage

It is important to note that in Texas, separate property can become community property if the property becomes commingled. Commingling occurs when separate property loses its character as separate property because it’s source can no longer be traced. For example, if your parents gave you a gift of $300 and you deposited it in a joint checking account, the money would be considered a community asset. If you deposited the money in your separate checking account, it may be considered separate property that does not have to be split in the event of a divorce.

Dividing assets in a community property state can be a complicated part of the divorce process. Furthermore, if you and your spouse have lived in both community property states and separate property states, there could be additional considerations. Call Katy divorce attorney Frank J. Vendt, Jr. at The Vendt Law Firm for help at (832) 263-6770.

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