Is Texas a Community Property State?

What community property means in Texas

Under the Texas Family Code, a married couple's property falls into two buckets.

Community property is everything either spouse acquires during the marriage, other than separate property. Both spouses own it, no matter whose name is on the paycheck, the title or the account.

Separate property is:

• property a spouse owned or claimed before the marriage;
• property acquired during the marriage by gift, devise or descent (an inheritance, for example); and
• recovery for personal injuries a spouse suffered during the marriage, except for compensation for lost earning capacity.

Texas law starts from a presumption that everything a couple has when the marriage ends is community property. A spouse who says an asset is separate has to prove it, and the standard is clear and convincing evidence — a higher bar than the ordinary civil standard.

Why record-keeping decides most fights

Because of that presumption, separate-property claims usually turn on documents rather than testimony. Tracing a bank account back to pre-marriage funds, a gift or an inheritance is a common exercise in Texas divorces, and mixed ("commingled") accounts are where it gets difficult. If separate funds cannot be traced, the presumption stands and the asset is treated as community property.

"Just and right" is not the same as 50/50

Texas courts divide the community estate in a manner the court "deems just and right, having due regard for the rights of each party and any children of the marriage." That is a discretionary standard. Many divisions end up roughly equal, but a court can order an unequal division based on factors the parties present — such as earning capacity, education, health, who has primary care of the children, or fault in the breakup of the marriage.

A court divides the community estate only. It does not divide a spouse's separate property.

What this affects

• The house. A home bought during the marriage is presumed community property even if only one spouse is on the deed. A home owned before the marriage is separate, but the community estate may have a reimbursement claim if community funds paid the mortgage or improved it.
• Retirement accounts. The portion earned during the marriage is community property. Dividing an employer plan usually requires a separate court order sent to the plan administrator.
• Debt. Debts taken on during the marriage are generally treated as part of the estate and allocated in the decree. The decree binds the spouses, not the lender, so a creditor can still pursue whoever signed.
• Businesses. A business started during the marriage is generally community property. A business owned beforehand is separate, but growth attributable to community effort can create claims.

When you may want an attorney

If everything was acquired during a short marriage and there is nothing to trace, spouses often resolve the division themselves. Property questions get harder when there is a business, a pension or retirement plan, an inheritance mixed into a joint account, real estate owned before the marriage, or significant debt. Those are the situations where the presumption and the tracing rules do real work, and where an attorney's involvement usually changes the outcome.