When it comes to the question of property division during a Texas divorce, the first thing that splitting couples need to know is that Texas is a community property state. This means that all property acquired by either spouse during the marriage will be presumed community property, and thus must be divided in a fair and equitable manner should the marriage end in divorce. It does not matter if only one spouse is listed as the title owner of the property - such as on a home title - as long as it is purchased during the marriage, it is presumed community property.
Conversely, Texas law also recognizes several instances in which one spouse can exclude certain types of property from division if he or she can show that the asset in dispute is actually "separate property." Two common types of Separate Property in Texas include property owned by a spouse prior to marriage or property acquired by a spouse during marriage by descent, devise or gift.
The spouse claiming the property as separate property bears the burden of proving by clear and convincing evidence that property is indeed separate before the court will recognize the property as separate.
Tracing separate property in Texas
Differentiating between community and separate property can often be a complex process in Texas, especially following marriages in which assets were commingled for a long period of time. In fact, a spouse is required to track the origins of an asset in order to prove it is separate property - a process that is known as tracing. In order to overcome Texas' community property presumption, a spouse must be able to trace and clearly identify property as separate before it will be treated as such.
Tracing separate property commonly comes into play when dealing with a couple's bank account in which both community and separate property were deposited and commingled. As long as a spouse can definitively demonstrate that funds deposited from a separate source remained in the account for the duration of the marriage, he or she will have met the burden of "clear and convincing evidence." Additionally, when separate funds can be definitively traced through a commingled bank account to a particular property purchased with those funds - such as a car - then the purchased property will also be recognized as separate property, and thus not subject to division.
It is also important to note that when community and separate property are commingled in the same bank account, Texas courts follow the assumption that the first funds withdrawn are community property. This means that as long as there are sufficient funds in the account at all times during the marriage to cover the separate property balance, the court can reasonably conclude that the total separate property amount remains at the time of divorce.
Legal assistance may be needed
The main thing to remember about Texas property tracing is that as long as separate property can be definitely identified, it remains separate property following a divorce, even if it undergoes mutations during the marriage. However, tracing separate property can often be much more complex than the simple illustrations given above, which is why it is often best to seek the counsel of an experienced divorce attorney if you are currently contemplating divorce and believe property division will be a contested issue.