As I discussed in a prior blog post and this page about property division, Texas is a community property state. Simply put, the majority of property acquired during a marriage is community property. That community property is jointly owned by both spouses. Under the Texas Family Code, community property is subject to a just and right division in a divorce. Community property may exist across multiple counties (for example a house in Tarrant County but bank accounts held in a bank in Dallas County) or even across multiple states; but any one family court in Texas can divide community property in a divorce. An important rule under the Texas Family Code regarding community property is the presumption that all property owned by the spouses is community property. This presumption is extremely important in addressing property division in a Texas divorce.
What is Community Property?
Community property refers to a legal concept that governs the ownership and distribution of assets acquired during a marriage or domestic partnership. It establishes a presumption that certain property and assets obtained during the course of the union are jointly owned by both spouses/partners. This presumption applies unless proven otherwise, allowing for equal distribution upon dissolution of the marriage or partnership.
Community Property vs. Separate Property
To comprehend the significance of the presumption of community property, it is crucial to differentiate it from separate property. While community property encompasses assets acquired during the marriage, separate property refers to assets owned by an individual before the marriage or acquired through specific means during the union. Examples of separate property include inheritances, gifts, and personal injury settlements received by one spouse/partner.
It is important to note that separate property must be adequately identified and traced to maintain its distinction from community property. Commingling separate and community property can lead to complexities when it comes to asset division during a divorce or dissolution.
Rebutting the Presumption
Although community property is the default assumption, it is possible to challenge this presumption under certain circumstances. One common way to do so is by providing evidence that an asset was acquired before the marriage or domestic partnership, making it separate property. Additionally, if spouses/partners have a valid prenuptial or postnuptial agreement explicitly stating the characterization of assets, it can override the presumption of community property.
Tracing Separate Property
Tracing separate property involves establishing a clear paper trail that demonstrates the origins and maintenance of an asset as separate. It is essential to maintain meticulous records, such as bank statements, receipts, and other relevant documentation, to prove the separate nature of an asset. By doing so, you can effectively distinguish it from community property and ensure a fair distribution during legal proceedings.
The Role of Expert Witnesses
In complex cases where the characterization of assets is heavily disputed, parties may choose to enlist the support of expert witnesses. These professionals possess extensive knowledge and experience in accounting, finance, and forensic analysis. Their role is to evaluate financial records, assess the nature of assets, and provide expert opinions on the classification of property as community or separate. Expert witnesses can significantly impact the outcome of a case by providing objective and well-substantiated testimony.
Dividing Community Property
When a marriage or domestic partnership ends, the division of community property becomes a crucial aspect of the legal process. In community property states, the general principle is to divide the marital estate equally between the parties. This means that each spouse or partner is entitled to 50% of the community assets, including real estate, financial accounts, investments, and other property acquired during the union.
However, it is important to note that equal division does not necessarily mean each asset is physically split in half. Instead, the court aims to achieve an equitable distribution, taking into consideration various factors such as the financial situation and earning capacity of each spouse/partner, the length of the marriage, and the contribution of each party to the acquisition and maintenance of assets.
Protecting Your Interests
Given the complexities surrounding the presumption of community property, it is advisable to seek legal counsel to protect your interests during property division proceedings. An experienced family law attorney can provide invaluable guidance, ensuring that your rights are safeguarded and that your voice is heard in the legal process. By understanding your rights and obligations, you can make informed decisions that align with your long-term goals.
Proving separate property in a Bedford, Dallas, or Fort Worth divorce
Unless the spouses have a prenuptial or postnuptial agreement that changes the classification of property, all property acquired by the spouses before marriage is separate property of the spouse who owned the property prior to marriage. That separate property status remains through the marriage. Certain methods of acquiring property during marriage, such as gifts, are also separate property. Separate property is not subject to division between the spouses during a divorce.
The family courts begin with the presumption that all the property is community property subject to division. It is up to the spouse claiming separate property to prove it with clear and convincing evidence. If that spouse cannot prove the property is separate property then the court will treat the property as community property.
Many people find this rule unusual or unfair. The reason why the Texas Family Code presumes property is community property is because it is typically easier to prove what isn’t community property than try to prove every piece of property that is community property. In most cases it is more efficient to exclude certain property from the community estate or marital estate. It would be time consuming if you had to prove every piece of furniture, clothing, jewelry, etc. was community property. Instead, the presumption of community property requires the person seeking to avoid division to prove that the other spouse does not own a share of that property. That places the burden of proof on the person who stands to benefit from the determination of separate property.
Overcoming the presumption of community property in a Dallas-Fort Worth divorce
Overcoming the presumption of community property is usually not very difficult for significant property. Real estate and financial assets normally generate records of acquisition. Gifts or large amounts of cash or securities typically come with some form of financial record that indicates the recipient. Wills or estate administration that distributes gifts after the passing of an individual will also create or already have records that show how the property was acquired. These include the most common ways to acquire separate property. However, smaller gifts, such as clothing or appliances may be more difficult to prove by clear and convincing evidence but it is rare that small personal gifts become major issues in dividing property during a divorce.
Conclusion
In conclusion, the presumption of community property plays a significant role in determining the distribution of assets during a divorce or dissolution of a domestic partnership. Understanding the distinction between community and separate property, as well as the various methods of rebutting the presumption, is crucial for navigating property division proceedings successfully.
At our law firm, we are committed to providing comprehensive legal services and guiding our clients through the complexities of family law matters. If you require assistance with the presumption of community property or any other aspect of family law, we are here to help. Contact our experienced team today to schedule a consultation and gain the support you need to protect your interests effectively.