Understanding separate property laws is crucial for divorcing spouses. If a spouse can prove certain property as his or her separate property, then the Constitution of State of Texas prohibits that spouse from being divested of his or her separate property. As such, separate property is “off the table,” so to speak, when it comes to division of the estate either by a court or through a settlement agreement. Therefore, if a spouse is able to prove certain property as his or her separate property, then such characterization can dramatically influence the framework for settlement negotiations and/or relief sought from the Court.
In Texas, the separate property of a spouse consists of “(1) the property owned or claimed by the spouse before marriage; (2) the property acquired by the spouse during marriage by gift, devise, or descent; and (3) the recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage.” Tex. Fam. Code § 3.001. Community property, on the other hand, “consists of the property, other than separate property, acquired by either spouse during marriage.” Tex. Fam. Code § 3.002. The Texas Family Code contains a presumption that the property possessed by either spouse during or upon divorce is presumed to be community property, and that the degree of proof required to establish property as separate property is clear and convincing evidence. Tex. Fam. Code § 3.003.
So how can a divorcing spouse prove that certain property is his or her separate property by clear and convincing evidence? Many times the answer will depend upon the theory by which the spouse is attempting to prove the property as his or her separate property (i.e., whether the property was owned by the spouse before marriage; whether the property was acquired by gift, devise, or descent; or whether the property was considered recovery for personal injuries occurring during the marriage, other than recovery for loss of earning capacity). When proving that the property was owned by the spouse before marriage, it will be necessary for the spouse who is claiming separate property to prove inception of title to the property, which occurs when a spouse “first has right of claim to the property.” Rusk v. Rusk, 5 S.W.3d 299, 303 (Tex.App.—Houston [14th Dist.] 1999, pet. denied). It is well settled that all property held by a spouse before marriage remains the separate property of that spouse; however, this rule needs to be considered with the other rule that income from separate property is generally community property. As such, many times, a spouse will need to trace and clearly identify the property claimed as separate property if separate and community property have been commingled.
With respect to proving that the property was acquired by gift, the spouse who is claiming separate property will generally have the burden of proving the three elements required to establish whether the property was in fact a gift: “(1) intent to make a gift, (2) delivery of the property, and (3) acceptance of the property.” In re Marriage of Moncey, 404 S.W.3d 701, 710 (Tex.App.—Texarkana 2013, no pet.). There are, however, certain presumptions found in the Texas Family Code and common law regarding gifts of which some spouses who are claiming certain separate property by gift need to be cognizant.
Navigating the vast common law that exists with respect to separate property and even the statutes of the Texas Family Code regarding characterization of property are subjects for which a divorcing spouse claiming separate property should consult an attorney. The lawyers at McClure Law Group, PC are well-equipped to handle such issues and can be reached by calling 214-692-8200.