What is considered community property and what is separate property in Texas?

What is community property?

According to the Law Office of Dana Baker in Texas, community property includes all property and earnings acquired by both spouses during the marriage. This encompasses items and income regardless of whose name is on the title or who earned the money, provided it was obtained from the date of marriage until the divorce, and wasn’t received as a gift, inheritance, or personal injury settlement.

Examples of community property are:

• Earnings from jobs, including wages, salaries, tips, and overtime;
• Real estate acquired during the marriage;
• Vehicles bought while married, no matter whose name is on the title;
• Contributions to pensions, 401Ks, or other retirement accounts made after getting married;
• Unemployment benefits and payments for lost wages;
• The balances of bank accounts, whether they are individual or joint.
• What is separate property?
• Items acquired during a marriage are considered community property unless proven or agreed to be separate property. Separate property includes assets owned before marriage, or acquired during marriage as a gift, through inheritance, or as part of a personal injury settlement.

Examples of separate property include:

• A home owned by one spouse before marriage;
• A vehicle given as a gift by a spouse’s parents;
• Jewelry received from the other spouse;
• Retirement account contributions made before marriage;
• Inheritance received by one spouse;
• Personal injury settlements from accidents.
• Reimbursement considerations arise when payments for a house or car owned before marriage are made with community funds during the marriage. The non-owning spouse may seek reimbursement for contributions towards the other’s separate property.

Division of Property by the Court:

The court does not have to split marital property equally but must divide it in a “just and right” manner. This takes into account various factors such as children’s needs, spouses’ earning abilities, reasons for the marriage breakdown, custody of children, and other relevant factors. If spouses agree on property and debt division, the court usually approves this agreement.

Division of Debts:

Marital debt includes liabilities incurred during the marriage, such as car loans, mortgages, credit card debts, personal loans, student loans, medical bills, and other liabilities. The court aims for a “just and right” division of debts, considering each party’s circumstances. Both spouses are liable for marital debts, irrespective of who incurred them or whose name is on the contracts. Divorce courts can assign debt responsibility but cannot change the names on the original debt contracts, leaving both spouses potentially liable to creditors.

For a review of your financial standing and credit, the Law Office of Dana Baker recommends visiting www.annualcreditreport.com to obtain your free annual credit report. For further inquiries or legal assistance, contact the office at 979-310-5507.