In Texas, “Separate Property” consists of:
- the property owned or claimed by a spouse before marriage
- the property acquired by the spouse during marriage by gift, devise, or descent
- the recovery for personal injuries sustained by the spouse during the marriage, except any recovery for loss of earning capacity during marriage.
It remains the property of the individual spouse. Spouses may also agree to set aside portions of their community property as separate; this is accomplished using a partition or exchange agreement.
Even if it is commingled with the community property of the marriage, as long as it can be traced and properly identified, it will remain separate property. This is usually done by seeing how the money was originally spent (usually on a single large purchase, like a house) and tracing the flow of the money through bank accounts and finally the hard assets. However, the better practice remains to keep separate property in a separate account, and to title any assets bought with those separate property funds in the name of the spouse owning the separate property.
In Texas, “Community Property” basically consists of all property acquired by either spouse during marriage that is not otherwise Separate Property. All marital is presumed to be community property unless it is proved to be separate property. Spouses may also agree in writing that his or her separate property is converted to community property.
Another question that often comes up is “What about property we acquired in another state?” The general rule in Texas is that marital property acquired by either spouse while residing elsewhere is community property if it would have been considered as such if the spouse was living in Texas at the time of acquisition.
Sometimes, these questions of community versus separate are very complex, and you may need legal help to determine the status of a marital asset.