The division of property within a marriage can be one of the more complex parts of any divorce that Texas divorce lawyers must assist their clients with.
The state of Texas recognizes both community property and separate property, each of which must be identified for divorce attorneys to proceed in helping their clients come up with a divorce agreement to present to the court for consideration.
While the identification of community property is usually fairly straightforward, family law attorneys find that it is the identification of separate property that can become especially complicated and slow things down.
Two Types of Property in Texas - Separate and Community
When two spouses enlist the aid of divorce lawyers to help them end their marriage, one of the issues that must be resolved is who owns what portion of all the property that the couple possesses.
Community property is property that was obtained during the marriage and is legally owned by both spouses.
Separate property is property owned by only one spouse, whether acquired before or during the marriage.
Before any divorce can be finalized, divorce attorneys must assist the spouses in identifying all separate and community property within the marriage.
Separate and Marital Property Handled Differently
Separate and community property are handled differently during a divorce.
Community property must be fairly divided among the spouses; however, separate property is not subject to division and remains the property of the spouse who owns it.
The biggest problem that family law attorneys come across when helping spouses divide their marital assets is disputes about what qualifies as separate property and then which spouse actually owns it.
Challenge of Proving Ownership of Separate Property
There are three types of separate property recognized by divorce lawyers and the Texas family court:
- Property owned prior to the marriage including income, financial accounts, real estate, capital gain on owned property, and more.
- Property received as a gift or through inheritance.
- Financial compensation for injuries sustained, even during the marriage, except for lost wages benefits, which qualify as community property.
The common challenge in distributing separate property is proving its ownership.
Doing so involves divorce attorneys helping spouses to "characterize their assets" to first identify which of their property actually is separate property and then helping them prove ownership of that property as considered by Inception of Title.
Inception of Title states that the character the property had when it entered the marriage remains at the end of the marriage unless something happened to change its character.
An example is when one spouse owns a home prior to the marriage; as long as the deed remains solely in that person's name, the home remains his or her separate property regardless of whether both spouses pay the mortgage and upkeep on the home.
If the property were re-titled so the second spouse’s name is included on the deed, then it becomes community property.
Proving the ownership of a home can be easier to do in many cases; ownership of other assets including financial accounts, retirement funds, gifts, and even some tangible property can be harder to prove.
The spouse claiming ownership must be able to present to family law attorneys what is termed “clear and convincing evidence” that the property is theirs.
Doing so may require extensive research to track down the ownership trail of different property or might even necessitate hiring a tracing expert to help, especially when trying to trace financial accounts.
Proving Ownership of Separate Property Can Be Difficult
Because every divorce must address the division of marital property before a divorce decree will be issued, divorce lawyers stress the importance of keeping good records during the relationship or even identifying community and separate property ahead of time in an agreement.
Texas attorneys find that the easier it is for spouses to convincingly prove separate ownership of property, the easier the entire divorce will be!