Separate Property

During a Texas divorce, it is certain that the issues surrounding separate property will arise, meaning you will most likely need help from top divorce attorneys in Arlington, Texas. It will be necessary to determine which assets are separate property and which assets are marital property, in order to divide the assets equitably. Of course, like most issues associated with divorce, division of assets can be emotional. One spouse may feel that their separate property is not being considered as such, or that they are being forced to relinquish more of their assets than is actually fair.

At Jackson, Landrith & Kulesz, PC we fully understand the emotions which accompany a divorce, and we take these emotions into consideration as we help you through your divorce. At the same time, we will fight hard for your rights and your future. We will be forceful negotiators when negotiation is the best course of action for you, and we will be aggressive litigators when necessary. Whatever you need during this difficult time, we will provide the legal assistance you need. If you are going through a divorce, whether a simple divorce or a much more complex one, we can help you survive this difficult time in the very best way possible. Contact one of our top divorce attorneys in Arlington, Texas today.

What is the Difference Between Marital and Separate Property?

Just as a merger of two businesses results in the commingling of assets, the marriage of two persons results in a single unit tied together by love, with shared assets and debts. When a marriage ends in a divorce, the big question becomes, how will these “shared” assets be divided amongst two people?

That depends on two key things:

(1) Whether each asset is classified as either marital or separate property; and

(2) How state law divides the marital property. Let’s talk about classification first.

What is Separate Property?

Any property you owned prior to your marriage is essentially considered separate property, as is any property you have acquired during the marriage by virtue of a gift or inheritance meant solely for you. An example of this would be if your parents gifted you money with explicit instructions that the money would be placed in a separate bank account and were meant only for you. Income resulting from this gift—like interest from the money—might be considered marital property, subject to division.

Any property or other assets acquired during your marriage but bought with your sole and separate gift or inheritance also remains separate property, unless the asset is, in some way, commingled with your marital property.

The first complicated part of distributing assets after the divorce is defining what type of property each asset is. State law determines what is deemed separate property, but the states are relatively consistent in defining separate property.

Generally, the following assets are considered separate property:

• Property either spouse owned before the marriage;
• Gifts, inheritances, and bequests received by one spouse before or during the marriage;
• Property or debts designated as separate in legally operative contracts, such as a prenuptial agreement;
• Property obtained with one spouse’s separate property assets (such as buying a new car with inheritance funds) with the clear intent of maintaining the acquired property as separate;
• Personal injury awards a spouse receives during the marriage, except any recovery for loss of earning capacity during the marriage; and
• Money acquired from separate property, such as equity.

Separate property is, generally speaking, the assets that are acquired before the marriage, with some exceptions detailed above.

Nonetheless, this also includes debt. Therefore, a person who entered a marriage heavily in debt will typically be responsible for it following divorce.

What is Marital Property?

Whereas separate property is typically assets acquired before the marriage, marital property is usually all of the assets acquired during the marriage. Note that some states consider the date of separation the end of the marriage. Texas considers community property as the date of divorce, not separation.

The following are examples of what can be marital property if the asset was acquired during the marriage:

• Primary residence, other real property;
• Bank accounts, stocks, and bonds;
• Pensions, stock options, and other retirement and employment benefits; and
• Life insurance policies.

The process of classifying assets is frequently not as cut and dry as these lists. There are some unique issues to remember when dealing with particular circumstances that can change the classification of an asset.

Separate Property Unless…

These basic rules of separate property apply only as long as you keep the property you brought to the marriage or property you acquired during the marriage as the result of a gift or inheritance entirely in your name. If you commingle this property in any way with marital or community property, then it becomes part of your marital property. As an example, suppose you receive a sum of money from Great Aunt Hazel intended solely for your use. On its face, this money is yours, as your separate property.