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What Is the Difference Between ‘Separate Property’ and ‘Community Property’?

“Community property” and “separate property” are the core concepts when it comes to property division during a Texas divorce.

The definition of separate property in the Texas Family Code is:

  1. “The property owned or claimed by the spouse before marriage”
  2. “The property acquired by the spouse during marriage by gift, devise, or descent” (“devise” means inheritance)
  3. “The recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage”

Separate property can change forms but remain separate property. For example, if the husband had a $25,000 savings account before the marriage, and he used the money to buy a car after the marriage, that car would be separate property.

The definition of community property under Texas law is, “Everything else.”

But let’s go into a little more detail. Community property is all the property acquired by either spouse during the marriage or while the divorce is pending. Community property also includes earnings from separate property. For example, if the husband kept his $25,000 in the bank instead of buying the car, the $25,000 would be his upon divorce but the wife would have a legal right to a fair share of all interest earned on the $25,000 during the marriage.

One item of property can be both separate property and community property. For example, a husband and wife buy a horse costing $5,000. They pay $2,500 from husband’s separate bank account that he had before the marriage and they pay the remaining $2,500 from a joint bank account containing their earnings during the marriage. Upon divorce, the horse would be 50 percent the separate property of the husband and 50 percent community property.

The Texas State Historical Association has an interesting article explaining the history of Texas community property laws.

Property settlement agreements are final, meaning that divorced spouses cannot return to court to ask the judge to divide community property in a different way. You need to make sure you get a fair and equitable distribution the first time around. Stewart Law, PLLC, located in Baytown, Texas, has provided legal counsel to men and women in divorce and child support matters for 8 years. For an initial assessment and consultation of your divorce case, contact our family law firm online or call our office at (281) 420-8020, at a reduced fee of $50.

 
Stewart Law PLLC