It’s common for couples about to divorce to disagree on which property is community or separate property. Remember separate property is not subject to division but that doesn’t mean that your spouse may not want a share of it during a divorce. But separate property can become community property in certain situations.
What Is Separate Property?
How Does Separate Property Become Community Property In Texas?
Any property you owned prior to marriage is considered separate property. Property gifted to you and property you inherited during marriage are also considered separate property. Your personal injury compensation except for lost wages is also considered as separate property. Any property you acquire in during separation may also be considered separate property.
What Is Community Property?
Transmutation Community Property In TX
Any property that you and your spouse acquire during marriage is considered community property. This can either be real property or separate property and also income earned during the marriage. Anything you acquire after separation is not community property. Both spouses own community property equally. Any debts accrued during the marriage are also the equal responsibility of both spouses.
Comingling Causes Separate Property To Become Community Property
When you mix your separate property with community property, the separate property becomes community property. For example, transferring money from your joint bank account to an account you had prior to marriage is commingling. That means that the account you had prior to marriage may now be considered part of the community property.
Process Of Distinguishing Separate Property From Community Property
Distinguishing community property from separate property is a complex process that relies on a clear paper trail that reveals the property and how the proceeds from it were used. That means going back to when the property was acquired. All this work can become difficult if the property in question is liquid and there have been multiple transactions involving it.
However, using proceeds from a separate property to cover expenses for marital property can transform the separate property into community property. This is especially true if there is no paper trail that shows that funds were transferred from the separate property for those purposes.
The process of distinguishing separate property from community property is called asset tracing. Some of the documents that are valuable in this process include receipts of purchases, statements, and other documents.
Spouses Can Change The Classification Of Property Voluntarily
The process of changing the classification of property from separate to community or vice versa is called transmutation. The parties must agree to this process and the intent to change the classification must be shown. When separate property becomes community property, the names of both parties may be added to the title of that property.
Since tracing separate property and the process of transmutation are complex, an experienced lawyer can help you. You need a lawyer to help you through the property division process to ensure that no asset is hidden and you get to keep your separate property.
Remember that both spouses have equal ownership of the community property, but the court does not have to divide it 50/50. The court considers factors such as the income of each spouse to decide what percentage of community property they should get.