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?
Community property
Texas is a community property state. This means all property gained by either spouse during the marriage belongs to both. Community property may include:
- Money
- real estate
- cars
- businesses
- 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
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.