Community Property vs. Separate Property

Before a court divides property between divorcing spouses, it must first determine whether property is separate or community. Separate property is:

• property owned or claimed by a spouse before marriage;

• property acquired by a spouse by gift, devise, or descent during the marriage; and

• recovery for personal injuries sustained by the spouse during marriage (except any recovery for loss of earning capacity during the marriage). 

Community property is all property, other than separate property, acquired by either spouse during marriage.

Community Property Presumption

Courts presume that all property possessed by either spouse when the divorce suit is filed is community property. If a spouse claims that something is separate property, that spouse has the burden to trace and to identify how that property is separate. The spouse must establish the separate origin of the property through evidence showing the time and means by which the spouse originally obtained possession of the property. If a court has any doubt regarding the character of the property, that doubt is resolved in favor of classifying the property as community. A spouse claiming separate property must offer documentary evidence to the court. A spouse cannot solely rely on testimony that property is separate to overcome the community property presumption.

General Rule of Property Division and the Discretion of the Court

In Texas, the general rule of property division is as follows:

In a decree of divorce or annulment, the court shall order a division of the estate of the parties in a manner that the court deems just and right, having due regard for the rights of each party and any children of the marriage. Tex. Fam. Code § 7.001

A court has wide discretion in dividing the property as it "deems just and right." The division does not have to be equal (what most people think happens in a "community property state"), but it must be equitable. Among the factors a court may consider are:

• nature of the property;

• disparity of incomes, earning capacities, and abilities;

• benefits which the party not at fault would have derived from continuation of the marriage;

• business opportunities;

• the relative physical conditions of the parties;

• the parties' relative financial conditions and obligations;

• the disparity of ages;

• education;

• the size of the separate estates, if any; and

• the probable need for future support.

Even if the basis of the divorce suit is a "no-fault" ground, a court may find that a "just and right" division is independent of the grounds of the divorce and may base its division on the spouses' conduct.

The appellate courts generally defer to the trial courts' division judgment. In fact, the appellate courts presume the trial court acted within its discretion in dividing marital property. The mere fact that a trial judge may decide a matter within his discretionary authority differently than an appellate judge is not an abuse of the trial court's wide discretion. Abuse of discretion occurs when the trial court's division of the property is manifestly unfair. So long as there was some reasonable basis for a court's unequal division of property, the judgment would be affirmed by the appellate court.

Property division can be the most complex and stressful aspect of divorce. If you are contemplating filing for divorce and need help understanding any step of the process, including the division of property, please schedule a consultation today. Do not rely on this post as legal advice. This post does not create an attorney-client relationship between the Firm and the reader. Do not act in reliance on the contents of this post without seeking the advice of counsel.