Community property in Texas

Texas is one of only nine states in the country that is considered a community property state, impacting how assets and debts are handled in a divorce.

Divorcing spouses in the Dallas-Fort Worth area of Texas understandably have many questions and concerns. For example, people with minor children will want to learn about how their divorce will impact the time they will have with their kids. How assets will be divided is another topic that is often top of mind to people when getting divorced. In Texas, such asset division is governed by the laws of community property.

What does community property mean?

Community property means that both spouses are viewed as having equal ownership in items. As noted by the Internal Revenue Service, this applies not only to assets but also to liabilities. Given this, if one spouse owes back taxes, the IRS can pursue community property assets for collection to pay the outstanding debt.

Are all married persons governed by community property?

In Texas, any couple that is legally married is governed by the laws of community property. In addition, any couple that is in a common law marriage is also governed by these laws. Community property laws do not apply to people in domestic partnerships.

A common law marriage can be recognized by two people who live together and operate as a married couple and who are looked upon as a married unit in their daily lives. A common law marriage can only be ended by an annulment or a divorce, just like a regular marriage.

Can anything be considered separate property?

Once a couple is married, it is possible for some things to be kept outside of the realm of community property. One of the most common is any inheritance received by or gift given to only one spouse per the Texas Family Code.

Items owned solely by one person before getting married may be separate. If such separate property ends up generating income during the course of the marriage, that income may be considered community property. However, any appreciation on the original asset remains the separate property of the original owner.

If one spouse receives an award for damages in a personal injury lawsuit, that may be separate property unless it is to compensate for lost earnings. Money that stands in for what would otherwise be considered community property is also considered community property.

In order for an asset to be considered the separate property of one spouse during a divorce, proof will be required. Ideally, this would be in the form of some tangible documentation.

How can spouses learn more about community property?

Understanding how community property laws can impact a divorce is vital for anyone ending a marriage. Working with an attorney is the best way to get the full picture on how different assets may be classified during a divorce.