Texas Divorce Attorney Blog
Community property is the property acquired by other spouse during the marriage, except separate property. Tex. Fam. Code § 3.002. Separate property is generally that property the spouse owned or claimed prior to the marriage, property acquired by gift, devise, or descent during the marriage, and personal injury recoveries with the exception of recovery for lost earning capacity during the marriage. There is a presumption that property possessed by either spouse during or on dissolution is community property. This presumption can only be rebutted in a Texas divorce by clear and convincing evidence. Tex. Fam. Code § 3.003. Separate property remains separate as long as the community presumption is overcome by tracing the assets back to separate property. Mischaracterizing property and awarding a spouse’s separate property to the other spouse constitutes an abuse of discretion and reversible error by a trial court in a divorce. A husband recently appealed the property division in his divorce, arguing the trial court had mischaracterized some of his separate property as community property.
Property Division
The parties had been married about nine years when the wife filed for divorce. In his counterpetition, the husband asked the court to confirm certain property was his separate property. The trial was focused on the property division, included two houses and an individualized retirement account (“IRA”). The trial court awarded one house to each party and ordered that the spouse awarded each house was responsible for the balance of that house’s mortgage. The court also ordered the IRA funds be split equally. The trial court confirmed certain home furnishings were the wife’s separate property and a sword stand and orange sofa were the husband’s separate property.
The husband appealed, arguing the court erred in characterizing the Walnut Glen house and IRA as community property.
IRA
The husband argued that about $93,000 in the IRA was his separate property. The wife argued he had not established that it was his separate property by clear and convincing evidence. The husband testified that his IRA account was worth $215,464.33 as of May 2022. He said this IRA account was a successor to an account he had prior to the marriage and that $92,844.28 of the current balance had originated in that previous account. He said he had originally opened a 401(k) account in 2004, and rolled the funds into new accounts when he changed jobs. He testified that he had moved $92,844.28 into the current account and provided a statement from the both before the marriage, showing a $92,844.28 in his 401(k) account.
The appeals court concluded the husband had not sufficiently traced the balance from the April 2013 account to the 2022 IRA balance. He did not provide any corroborating evidence showing the connection between the balances. The appeals court concluded he had not rebutted the presumption of community property, so there was no abuse of discretion in the trial court’s characterization of the IRA as community property.
Walnut Glen House
The husband argued the Walnut Glen house had been a gift from his mother and was therefore his separate property.
To show property was a gift, the party must prove there was an intent to make a gift, delivery, and acceptance.
The husband testified he, his first wife, and his daughter moved into the house with his mother in 2000. He said he paid the mortgage and the mother gifted the property and furnishings to him in 2014. He said he did not pay any consideration and instead just took of the mortgage, which had a balance of $91,906. The wife testified she did not know if the husband gave his mother any money when he signed the deed. The wife testified he used a home equity line of credit on the Walnut Glen house to get the mortgage for the Brisk Springs house.
The deed did not include the wife’s name, but case law in Texas has established that a deed in only one spouse’s name is not sufficient to overcome the community presumption. The presumption can be negated by a separate property recital in the deed, which creates a rebuttable presumption that the property is separate.
The finding Walnut Glen house was community property included an implicit finding it was not a gift and that the husband had failed to rebut the community presumption. The trial court is the factfinder and has the discretion to determine credibility and weight of the evidence and testimony. Because the husband had not rebutted the presumption, there was no abuse of discretion in the trial court’s finding it was community property.
Call a Skilled Texas Divorce Lawyer
Overcoming the community presumption requires clear and convincing evidence that the property is separate, possibly including tracing. If separate property may be an issue in your marriage, an experienced Dallas divorce attorney can work with you to identify and obtain the evidence needed to support your case. Set up a consultation with McClure Law Group at 214.692.8200.