Texas is a community property state, meaning each party has an undivided interest in most property acquired during the marriage. However, some nuances and exceptions impact how a court characterizes and ultimately divides marital property in a divorce.

Separate Property vs. Community Property

Texas law categorizes marital property into three main types: separate property, community property, and mixed property. Understanding these distinctions is crucial in divorce proceedings since the court must divide the spouses’ community property and confirm each spouse’s separate property.

What Is Separate Property?

Separate property is the property that belongs solely to one spouse. Texas law defines separate property as:

• Property owned by a spouse before marriage.

• Property acquired during the marriage by gift, inheritance, or devise (e.g., through a will or intestate succession).

• Personal injury compensation awarded to a spouse, except for recovery related to lost wages or earning capacity during the marriage.

• Property acquired in exchange for separate property or purchased with separate funds.

• Property designated as separate under a legally valid premarital or marital property agreement.

What Is Community Property?

Texas law defines community property as the property, other than separate property, acquired by either spouse during marriage. Accordingly, most assets acquired during the marriage by either spouse, regardless of which spouse earned or purchased them, are community property. Examples of community property include:

• Salaries and wages earned during the marriage.

• Real estate purchased during the marriage (unless bought with separate property funds).

• Retirement accounts and pensions accrued during the marriage.

• Investment income and business profits generated during the marriage.

What is Mixed Property?

Some assets have both separate and community property characteristics, making their division more complex. When spouses use a combination of separate and community funds to purchase property, the property is characterized as mixed in proportion to contributions from separate and community funds.

Dividing Community Property in a Texas Divorce

As stated earlier, Texas divorce courts must divide the spouses’ community property and confirm each spouse’s separate property. In Texas, courts cannot divide separate property in a divorce; that property remains with the spouse who owns it. However, Texas law presumes all property acquired during the marriage is community property unless proven otherwise. A spouse claiming an asset as separate property must provide clear and convincing evidence to overcome the presumption that all property acquired during marriage is community property. If a spouse fails to meet that burden, the court will characterize it as community property.

Unlike some states that require a 50/50 split of assets, Texas courts divide community property based on a “just and right” principle. This principle means that Texas courts may consider various factors to determine an equitable—though not necessarily equal—division of community property. Such factors include:

• The fault in the breakup of the marriage (e.g., adultery or wasteful spending).

• The earning capacities and financial circumstances of each spouse.

• Which spouse has primary custody of any children.

• The health and age of each spouse.

• The size and nature of the separate property owned by each spouse.

• Any agreements between the spouses, such as premarital or marital property contracts.

While Texas law allows courts to divide the parties’ assets unequally so long as the division is “just and right,” many judges try to divide the property equally unless there is some overly egregious evidence warranting an unequal division. Still, some judges look deeply into the parties’ circumstances to divide their property in a “just and right” manner, even if doing so results in an unequal distribution. As a result, it is imperative to know your judge’s tendencies before negotiating a property division with your spouse or presenting your case to the court at a final hearing.

Protecting Your Property Interests From Texas’s Community Property Rules

To avoid disputes regarding property division in the event of a divorce, Texas couples may consider the following:

• Premarital Agreements – These contracts can change the character of marital property before the parties get married. For example, the parties can agree that notwithstanding Texas’s community property laws, the personal earnings of a spouse would be that spouse’s separate property.

• Marital Property Agreements – Also known as “postmarital agreements” or “partition and exchange agreements,” these contracts allow spouses to redefine property ownership after marriage. For example, spouses may use a marital property agreement to convert community property into one spouse’s separate property.

• Keeping Detailed Financial Records – Maintaining records of separate property funds, gifts, and inheritance can help overcome the presumption of community property and prove separate ownership as part of the divorce process.

Consult a Knowledgeable Texas Divorce Lawyer

When a couple divorces in Texas, its community property laws play a central role in determining how a court may divide the parties’ assets. However, the distinction between separate and community property can be complex, and factors such as agreements between spouses and the court’s discretion can significantly impact the division. 

Whether your divorce is contested or uncontested, consulting an experienced divorce lawyer can help protect your rights and make the process as smooth as possible. Do not let dealing with the legal system add more stress to your situation. We handle the details so you can focus on moving forward. You have one chance to do this—make the right choice by choosing the right attorney. Call us at (956) 291-7870 or email us at contact@rdjlawyer.com for a free consultation and case evaluation.