Warning: This column begins a series of columns containing technical information that may be taxing to the brain. Most Texans are ignorant about how much their lives are impacted because Texas is a community property state. A few have a vague idea that property is characterized as either community or separate. Given the typical knowledge gap, let’s begin.
What is Separate Property?
Separate property is property that is owned by the individual alone. Separate property consists of all property that a spouse: (1) owned or claimed prior to marriage; (2) acquires during marriage by gift, as distributed pursuant to a will or through inheritance; and (3) acquires during marriage pursuant to a personal injury, except recovery for loss of earnings or earning capacity.
What is Community Property?
Community Property belongs one-half to one spouse and one-half to the other spouse, regardless of who brought it into the marriage. Community property is all property, other than separate property, acquired during marriage.
The Community Property Presumption
The law presumes that all property owned by a married couple is their community property. If one spouse contests that property is his or her separate property, that spouse must prove the allegation by clear and convincing evidence. The more common proof necessary in a legal dispute is proof by a preponderance of evidence.With the preponderance of evidencestandard, the scales weighing the proof need be only slightly tilted toward one direction. The clear and convincing standard requires a higher degree of proof. To reach the clear and convincing standard, the judge or jury must be highly convinced that the evidence is true.
Where the Wild Things Are
The controversies over classification of property as community or separate arise even in the best of families. Conflicts show up between partners when couples marry and when they divorce. Disputes arise between heirs and surviving spouses when one partner dies. Trust illicit issues concerning characterization of business interests, classification of principal and interest in trusts. Characterization questions even raise their ugly heads between debtors and creditors in bankruptcies.
Next Week: Implications of Characterization of Property in Divorce
Sandra W. Reed is an attorney with Katten & Benson, an Elder Law firm in Fort Worth. She lives and practices in beautiful Somervell County, near Chalk Mountain.