What is Separate Property ?
Before you can start to talk about how property will be divided, you have to understand the difference between separate and community property if you are getting divorced in Texas. The reason that this is important is because whether your property is characterized as separate or community property (property acquired during the marriage) will certainly have a huge impact on how that property is distributed. So what is separate property?
Separate Property is:
(1) property that you or your spouse owned before you were married;
(2) property that you or your spouse acquired through gift, devise (e.g. inheritance received by will), or descent ; and
(3) recovery for personal injuries sustained by you or your spouse during marriage, except any recovery for loss of earning capacity during your marriage.
Why does it matter? Because in Texas, assets that are considered to be community property, will be distributed between the spouses. On the other hand, spouses won’t have to share any proven separate property with their spouse.
So, How Do You Protect Your Separate Property from Being Distributed?
In a divorce, it is presumed by the judge that all property is community property. The spouse claiming to have separate property must prove that the property is his or her separate property by clear and convincing evidence. Tex. Fam. Code. § 3.003.
To prove separate property however, a spouse will have to go beyond this standard. Think of this as a “high likelihood for truth” standard.
The type of evidence used to prove separate property casts a wide net. First, your attorney will likely have pled for separate property in your pleadings and discovery. You could use statements to show that you had a retirement account prior to your marriage. You could use the title to your vehicle to show that you owned it before your marriage. You can have your mother testify about the money that she gave you as a graduation gift. Any documentation that you can provide with testimony will be a major deciding factor when characterizing the property in the divorce. You may even need to hire a CPA to do some “tracing” if your property has been commingled. If you do have to hire one, he or she will likely testify as well as provide multiple reports and other data to back up their tracing of your separate property. Qualified CPAs can also be used to rebut your spouse’s claim for separate property.
In short, it is a high burden to be able to prove separate property and if not done properly, the spouse claiming separate property could easily lose the claim if it is not presented adequately. Remember, the evidence will be presented in the presence of the jury. The Jury will then get to characterize the property as community or separate and the court will divide it based on those findings. It is important to hire a lawyer who has experience in dealing with both simple and complex separate property issues and a lawyer that is comfortable and distinguished in presenting all of the evidence in front of a jury. It is unlikely that all of the jurors will be accountants, for example. So, it is important that your lawyer has the ability to present your case in the most clear and precise way possible. Otherwise, you may wound up losing out on your separate property claims.
Commingling (Mixing Separate Property with Community Property)
Sometimes spouses mix their separate property with community property in a way that the funds are entangled to a point that it is difficult to tell which property is separate property. Click here to read more about commingling. Click here to download an ebook on ‘Jury Trial’.