5 Key Exceptions to Community Property Division in a Texas Divorce

When a married couple divorces in Texas, the general rule is that all property acquired during the marriage is considered community property and must be divided equally between the spouses. However, there are several important exceptions to this rule that can have a major impact on the final property division in a divorce.

As knowledgeable Galveston divorce attorneys, we understand the complexities of Texas community property laws and how to identify assets that may be excluded from the marital estate.

In this blog post, we’ll highlight 5 key exceptions to the community property presumption and explain how they can affect your property rights in a divorce.

1. Separate Property Owned Before Marriage

Property that either spouse owned individually before getting married is generally considered separate property and is not subject to division in a divorce. This can include:

• Real estate purchased prior to the wedding
• Cars, furniture, and other personal belongings
• Bank accounts and investments held solely in one spouse’s name
• Businesses started before the marriage

As long as separate assets and funds are not commingled with community property during the marriage, they should remain the exclusive property of the original owner in a divorce.

2. Property Acquired by Gift or Inheritance

Property that one spouse acquires during the marriage by gift, will, or inheritance is also typically classified as separate property. Common examples include:

• A house or land inherited from a deceased relative
• Jewelry, art, or family heirlooms given as a gift
• Cash gifts or trust distributions from family members

For the separate property exception to apply, the gift or inheritance must be explicitly made to just one spouse, not the couple jointly. If separate and community property are mixed together (for example, by depositing a cash gift into a joint account), it can raise tricky “tracing” issues that may require forensic accounting to resolve.

3. Personal Injury Settlements and Awards

If a spouse receives money from a personal injury lawsuit or settlement during the marriage, at least some portion of those funds may be considered their separate property in a divorce.

Under Texas law, a personal injury award is classified as part separate property and part community property based on what the damages are meant to compensate:

• Amounts paid for the injured spouse’s medical bills, lost wages, and other economic losses suffered during the marriage are typically community property
• Amounts paid for the injured spouse’s pain and suffering, disfigurement, future lost earning capacity, and other non-economic damages are typically the injured spouse’s separate property

Navigating the division of a personal injury settlement in a divorce can be complicated, so it’s important to work with an attorney who understands how Texas law applies to your specific situation.

4. Property Covered by a Marital Agreement

If a divorcing couple signed a valid premarital or post-marital property agreement, the terms of that contract can override Texas’s default community property rules.

For example, spouses can use a prenup or postnup to:

• Define certain assets as one spouse’s separate property, regardless of when or how they were acquired
• Agree to an unequal division of community property in a divorce
• Clarify each spouse’s rights and responsibilities for managing and disposing of property during the marriage

For a marital property agreement to be enforceable in Texas, it must meet specific legal requirements, including being in writing, voluntarily signed by both spouses, and not unconscionable at the time of signing. If a premarital or post-marital agreement is validly executed, the court must follow its terms when dividing property in a divorce.

5. Characterization Agreements and Tracing

In some cases, divorcing spouses may disagree on whether a particular asset is community or separate property. If the dispute can’t be resolved through negotiation, the court will have to characterize the property based on the evidence.

One way to avoid a drawn-out legal battle is for the parties to sign a written agreement characterizing certain property as separate. As long as the agreement meets the legal requirements for a valid marital property agreement, it allows the spouses to control how assets will be defined and divided in a divorce.

Spouses attempting to claim separate property in a divorce may also need to “trace” the asset back to a separate property source using documentation like account statements, property records, and purchase receipts. An experienced divorce attorney can help gather the necessary evidence to support your characterization claims.

Get Help Protecting Your Separate Property in a Texas Divorce

If you’re facing a divorce in Texas and have significant separate property or other assets that you believe should be excluded from the community estate, it’s essential to work with a skilled divorce lawyer who can help you assert your rights and protect your financial interests.

At the Law Office of Aimee Stritchko in Galveston, we have extensive experience handling complex property characterization and division issues in Texas divorce cases. We can thoroughly review your assets, advise you of your options, and build a strong legal strategy to pursue the best possible outcome in your case.

To learn more about how we can help you navigate the exceptions to community property division in your Texas divorce, contact us today to schedule a confidential consultation with one of our knowledgeable attorneys.