WHAT IS SEPARATE PROPERTY IN TEXAS?

One of the top concerns of individuals anticipating a divorce is how their property will be divided by the court. There are always certain items or assets that clients want to ensure that they keep once the divorce is final. However, as a community property state, Texas makes much of what a couple owns fair game during the property division process. The only property that is exempt from property division is "separate property."

But what exactly counts as separate property? This type of property needs to be either owned by one spouse prior to the marriage or somehow gifted specifically to one spouse during the course of the marriage.

Common examples of separate property include:

• Cars that were owned by either spouse before the marriage
• Inheritance that passed down to a certain spouse
• Money that has been in invested in a 401(k) before a marriage
• All (or partial) recoveries following a personal injury suit

"COMMINGLING" ASSETS

Physical property is usually deemed "separate" with little difficulty in court because it is typically easy to establish who originally owned a specific property via deeds, receipts, and the couple's own recollection. However, liquid assets can be more difficult to establish as separate during the property division process. Often, this is because even when an account predates a marriage, both spouses end up using it for savings and transactions.

In these instances, the bank account would be considered "commingling," meaning that both spouses have some claim to the property due to shared use and each spouse’s contributions to maintaining the account. In these cases, it may be necessary to bring in a forensic accountant to track the couple's expenses and determine how much of the account belongs to one spouse and how much of it belongs to the other.