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Characterizing Gifts in Texas Divorces

Dividing property is an important aspect of the divorce process.  Only community property is divided by the court, however.  Although property acquired during the marriage is presumed to be community property, Texas divorce attorneys know there are some exceptions.  A gift made to one spouse during the marriage is separate property.

A Texas appeals court recently reviewed whether property conveyed by the husband’s mother was properly characterized as community property.  The husband appealed the final divorce decree.  He challenged the characterization of about five acres as community property.  The court had found it was community property and awarded half of it to the wife.

At trial, the husband argued the property had been a gift from his mother and was therefore his separate property.  The wife argued the couple had begun the process of obtaining an equity loan for repairs to the property in 2013.  In November 2018, the husband’s mother signed a quitclaim deed transferring the property to her son.  The wife testified the deed had been printed from the internet, and the intent was for the husband to get the property so that they could obtain the loan and repair it.  The bank did not recognize the quitclaim deed, due to a lack of legal description of the property.  The husband’s mother then executed a general warranty deed conveying the property to both the husband and the wife.  The wife stated the warranty deed and a subsequent correction affidavit were intended to make both of them the property owners.

The husband testified that he did not intend to give any part of the property to the wife.  He said he only did the warranty deed to get the loan.  He did, however, acknowledge signing affidavits that stated it was community property.

The trial court found the property was community property, divided it equally, and ordered it to be sold.  The proceeds were to be used to repay the loan, with the balance being equally divided.

On appeal, the husband made a number of arguments based upon the court not finding the quitclaim deed was a gift.  The court noted that a gift to one spouse during the marriage is separate property.  A gift is a voluntary transfer made without consideration.  There is a presumption that property conveyed to a child from a parent is intended to be a gift.  However, the presumption may be rebutted by clear and convincing evidence showing the donor did not intend to give a gift.

The appeals court noted that the quitclaim deed stated there was consideration in the amount of $10.00.  There may not be consideration for a gift, so the deed did not meet the definition of a gift on its face.  The warranty deed also referenced “[c]ash and other valuable consideration.”

The appeals court found there was sufficient evidence for the trial court to find the gift presumption had been rebutted. The appeals court affirmed.

When a parent conveys property, it is presumed to be a gift.  If the parent actually intends to convey a gift, however, he or she should make sure the documents do not contradict that intention.

If you are facing a divorce, an experienced Texas divorce attorney can help you.  Call McClure Law Group at 214.692.8200.

More Blog Posts:

Property Division and Texas Spousal Maintenance in a Divorce

Proving Separate Property Interests in Texas