In Texas, separate property is not subject to division in divorce. Separate property includes gifts, inheritances, personal injury settlements and all property acquired before the marriage. While separate property is not subject to division, it is important for people going through a divorce to be aware that protection of separate property is not automatic.
Proving Separate Property
In Texas, the owner of the separate property must prove that it is separate and not community property. The exception is if the other spouse agrees to the characterization.
Simply having your name on a title, deed or other document does not prove that the asset is your separate property. In fact, how an asset is titled may not have any bearing at all on whether or not it is considered separate or community property. In some cases, proving separate property can be quite complex, particularly when it has become commingled with community property.
If you bought and paid off a car prior to getting married, it will likely be fairly simple to prove that the car is your separate property. However, if the car was initially purchased prior to the marriage but paid off during the marriage, it will have aspects of both separate and community property and the issue becomes more challenging. And what if money was spent during the marriage to maintain or repair the car?
A car is a relatively simple example. There are many assets that may have been first acquired prior to marriage, but paid off, contributed to or that increased in value during the marriage. The family home, real estate, businesses and retirement accounts are just a few more examples of assets where the line between separate property and community property blurs. The issue can become quite complicated.
The Art Of Tracing
Tracing is the term used for the process of determining what is separate versus community property. This can be a work-intensive process that involves careful review of a variety of factors that can include everything from payment histories to business valuations. When going through a divorce, it is critical that you choose an attorney who is skilled at tracing and protecting your separate property, and who can challenge any attempts by your spouse to misclassify community property as separate property. The goal is to protect what is rightfully yours.