The property division process during Texas divorces intimidates many people. Some individuals don’t know what to expect, and they worry about the financial losses they may incur. Many people struggle to understand the nuance of the Texas community property division process, which is understandable, as the law is complex.
While some couples do divide their community property exactly in half, many others have to employ a more individualized approach to property division. Judges handling litigated property division cases and spouses negotiating with one another can come up with customized solutions based on marital circumstances.
Not everything that couples own is automatically part of the marital estate when they divorce. Both spouses in a marital relationship may have separate property that is likely not subject to division in their divorce proceedings.
What assets may constitute separate property during a Texas divorce?
Assets owned before marriage
People often bring valuable property into a marriage. They may already jointly own a business with their siblings or have a vehicle but they used to get to work. Assets owned prior to marriage are typically separate property. However, the use of marital income and resources to maintain or improve those assets could lead to claims of co-mingling.
Assets received as gifts or inheritances
Most of what people acquire during marriage is shared property. Both spouses have a right to any income earned during the marriage, even if one spouse earns far more than the other. Whatever people purchase with their marital income is usually part of the marital estate as well.
However, resources received as gifts from other people may remain the separate property of the recipient. An inheritance is usually also the separate property of the person named as the beneficiary of an estate. As with assets owned prior to marriage, inherited property can be vulnerable to division in cases where the other spouse can claim that commingling of marital assets occurred.
Personal injury settlements
Texas state statutes include personal injury compensation as separate property belonging to the plaintiff. The exception in this rule relates not to commingling but rather to lost wages or earning potential during the marriage. A portion of a personal injury settlement might be marital property because it relates to income someone could not earn during the marriage because of their injury.
Those hoping to protect certain assets as separate property in a Texas divorce often need to go over their financial records carefully. Verifying the origins of different assets can help spouses protect them as separate property during divorce proceedings. Those who protect their separate property can use those assets as a starting point for rebuilding after their divorce.