A challenging part of the divorce process is dividing the property. Who gets what and how much? Determining the difference between property types is a key issue. What exactly is the difference between community and separate property in a divorce?
Texas is a community property state. This means all property gained by either spouse during the marriage belongs to both. Community property may include:
- real estate
- retirement accounts
Community debt is debt incurred during the marriage by one or both spouses. For example, the mortgage on a house is common debt. The house itself is community property.
Separate property is property or assets owned by one spouse. The Texas Family Code requires that separate property consists of:
- property before the marriage
- property such as gift or inheritance received during the marriage
- recovery for personal injuries sustained by the spouse during the marriage
- property that both spouses agree is separate and included in a written document
To prove a spouse has separate property, the spouse may need to provide clear and convincing evidence. This may not be easy. A spouse can use tracing to show that an asset owned at the time of divorce is separate property.
Texas divorce law is an equitable distribution state, which may become a tad confusing when used with community property. Equitable does not mean equal. The judge divides the property in a manner that is “just and right.” To make the decision, he or she will take several factors into account concerning both marital and individual financial circumstances.