Property characterization can be a significant area of contention in Texas divorces, particularly in high net worth divorces or those in which one party entered the marriage with significantly more assets. Texas law presumes that property possessed by either spouse during or on dissolution is community property. That presumption may be rebutted by clear and convincing evidence the property is separate. Tex. Fam. Code § 3.003. Property conveyed by one spouse to the other is generally presumed to be a gift. Clear and convincing evidence the conveying spouse did not intend to gift the property is needed to rebut the gift presumption. A former husband recently challenged characterization of the marital residence as the wife’s separate property despite execution of a general warranty deed granting him an undivided one-half interest.
The parties got married in 2001 and the wife petitioned for divorce in 2021. The trial court found the marital home was the wife’s separate property. According to the appeals court’s opinion, she bought it two years before the marriage and refinanced it in 2003. She also signed a general warranty deed that granted the husband an undivided half interest. The court found the wife did not intend to gift the property to the husband and provided an alternate reason for executing the warranty deed. The court also found refinancing had not changed the property’s character. The trial court awarded the wife conditional appellate attorney’s fees if the husband appealed to the Court of Appeals or the Supreme Court of Texas and the wife “substantially prevail[ed].]”
The husband appealed the home’s characterization and the conditional appellate attorney’s fees award.