What is Separate Property?
Harold married Julie in Texas several years ago. Prior to getting married, Howard inherited a vacation home from his paternal grandfather, Henry. Excited and inspired by the property, Howard often made renovations to the vacation home while he was married to Julie. He and Julie have now decided to get a divorce. They are now in the process of dividing their assets. Is Howard’s vacation home considered to be his separate property? Would the increase in the value of the home be considered to be community property since the improvements were made during the marriage?
How Does Texas Define Separate Property?
Generally, property acquired before the marriage is considered to be separate property. According to the Texas Family Code Sec. 3.001. A spouse’s separate property consists of:
- The property owned or claimed by the spouse before marriage;
- The property acquired by the spouse during marriage by gift, devise, or descent; and
- The recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage.
However, property acquired before the marriage can always become community property if there is an agreement between the spouses to convert the property to community property and divide it.
Property Owned or Claimed By the Spouse Before Marriage
In our context, Howard acquired the vacation home before he married Julie. Therefore, the vacation home is Howard’s separate property. Let’s alter Howard’s and Julie’s circumstances. Let’s say that Julie’s mom gave her a gold pendant as a graduation gift while Julie was married to Howard. Simply put, the rule states that property that is acquired by gift is separate property, even if the gift was given during the marriage. Let’s move on.
The Property Acquired By the Spouse During Marriage By Gift, Devise, or Descent
Let’s say that Howard and Julie married first and then Howard inherited the vacation home from his grandfather. Would the vacation home be considered Howard’s separate property? The general answer would still be yes, because Howard inherited the vacation home.
Howard made renovations to the vacation home while he was married. Julie contributed to those renovations. Does Julie have any ownership rights to Howard’s vacation home? The general answer would be no. However, Julie may be entitled to seek reimbursement for her contribution. In our context, reimbursement allows a contributing spouse (spouse who contributed money to another spouse’s separate property) to be reimbursed for their contribution.
Recovery for Personal Injuries Sustained By the Spouse During Marriage, Except Any Recovery for Loss of Earning Capacity During Marriage
Let’s say that Howard was injured while working before his marriage to Julie. Howard obtains a large personal injury settlement two months prior to getting divorced from Julie. Is Julie entitled to receive any of Howard’s personal injury settlement? The answer will depend upon the characterization of the personal injury settlement. Specifically, according to the Texas Family Code, the following is considered to be a spouses separate property:
- Pain and Suffering from a Tort Recovery;
- Disfigurement from a Tort Recovery; and
- Loss of Consortium from a Tort Recovery is separate property.
You should speak with a family law attorney to determine whether or not your personal injury recovery qualifies as separate property.
Community Property Presumption
Furthermore, in Texas, there is a presumption that the property at issue in a divorce proceeding is community property. This is called the community property presumption. Any party that claims that certain property is separate property has the burden of rebutting the community property presumption. See Boyd v. Boyd, 131 S.W.3d 605 (Tex. App. 2004).
Likewise, property acquired after the dissolution of marriage, is the separate property of a spouse. It is important to note that the characterization of separate property does not occur when two legally married parties cease living together or when two legally married parties separate. The state of Texas does not recognize legal separation. Therefore, property acquired while legally married persons are separated from one another is not considered separate property.
In Texas, there is a community property presumption that covets property at issue in a divorce proceeding. Generally, separate property is not divided in a divorce proceeding. Separate property is property that was acquired before the marriage or by gift or devise during the marriage. Separate property cannot be acquired when parties separate because there is no legal separation in Texas. Your separate property must be proven with clear and convincing evidence. You should speak with a lawyer to determine whether or not your property may be considered separate property. If you don’t, you could risk losing property that should have be given to you.
 Hinton v. Burns, 433 S.W.3d 189 (Tex. App. 2014)
 The husband presented no documentary evidence to establish the separate origin of the funds that he utilized to pay down the parties’ mortgage. Additionally, he provided no testimony, other than his own, to corroborate or substantiate the transactional trail leading up to his claim for economic contribution. Thus, the husband did not discharge his burden to rebut the community property presumption. Boyd v. Boyd, 131 S.W.3d 605 (Tex. App. 2004)