Texas is a community property state, so any property in the possession of either spouse at the time of divorce is presumed to be community property. However, certain property may actually be separate property. “Separate property” is property that was acquired or created separate from the marriage and is owned individually by one of the spouses. The court is prohibited from awarding one party’s separate property to the other spouse.
Property acquired before the marriage is always considered separate property. For example, if one spouse owns a home and the other spouse moves into that home, it still is separate property of the original owner. If the parties put joint money into the house during the marriage (either for the mortgage or improvements to the house), the non-owning spouse may be entitled to reimbursement for the money put into the house.
Property one spouse inherits is also considered separate property, even if that property is acquired during the marriage. Similarly, property acquired by a spouse as a gift from a third party or from the other spouse is also separate property, even if the gift is received during the marriage. Finally, money received by a spouse for personal injury damages is considered separate property.
Because all property is presumed to be community property at the time of divorce, the spouse seeking to characterize something as separate property has the burden of rebutting that presumption. This can be done through spousal agreement, the inception-of-title rule or tracing. If there is a dispute about the characterization of property, it is certainly advisable to have an attorney on your side.