Proving Separate Property in a Texas Divorce

 Posted on January 22, 2025 in Property Division

The line between separate and marital property can become blurry throughout a marriage, making it more difficult to claim separate property during a Texas divorce. Despite the difficulties, proving that an asset is separate or non-marital can be crucial to your future financial security. Since Texas is a community property state, this means that marital assets are divided right down the middle, regardless of any extenuating circumstances.  

The burden of proof lies on the spouse who claims an asset is separate rather than on the other spouse who seeks to divide the asset as marital. Since determining which assets remain the sole property of one spouse can be complex, it is not recommended that you do this on your own. It is important to speak to an experienced family law attorney when your financial well-being is at stake.   

What Are the Rules Regarding Marital and Non-Marital Property?

Marital property (community) is essentially any assets a married couple has accumulated since their marriage. Non-marital (separate) property is generally considered assets owned by one spouse prior to the marriage, as well as gifts and inheritances received by one spouse during the marriage. While this seems relatively straightforward, the reality is much more complex.

Barring a prenuptial agreement, assets owned prior to the marriage can become marital assets, either deliberately or accidentally. For example, if one spouse received a $100,000 inheritance before the marriage and kept that money completely separate in an account with only his or her name on the account, then it would probably remain separate property. If, however, those funds were commingled with marital funds, the entire amount could become a marital asset.  

Evidence and Documentation Required to Keep Separate Property from Becoming Marital Property

Several steps must be followed to prevent separate assets from being split during a divorce. First, all documentation pertaining to those assets must be gathered. This can include titles, gift letters, and inheritance documents. Deeds to any real estate owned prior to marriage can prove the property is separate unless marital funds have been used to maintain or improve the property or the other spouse has contributed labor to maintain or improve the property.

If a gift was received before or after the marriage, a gift letter from the person who gave the gift that states the gift was solely meant for the recipient can document that the gift is non-marital. Inheritance documents can include a last will and testament, trust documents, or a probate court order to show where the inheritance came from and who it was intended for.

When one spouse receives a personal injury award during the marriage, the portion specified as lost wages and medical expenses may be considered marital, while the portion for lost future wages and pain and suffering is likely to be considered separate. Of course, each situation is unique and may have different outcomes.

How Are Separate Assets Treated When Commingling Has Occurred?

If separate assets have been commingled, a forensic accountant may be required to trace exactly what portion was commingled and how the asset should be split. The origins of a commingled asset must be traced to prove it is non-marital. Money coming in and money going out as it relates to a specific asset must be documented through receipts, bank statements, and other financial documents.

For example, if one spouse inherits $75,000 during the marriage and places that money in an investment account in only his or her name, it may be assumed that the money remains separate. However, any investment gains on the original amount will be considered marital and will be split between the spouses. Every account statement from the time the account was created to the time of the divorce will be required to show what portion is separate and what portion is marital.

Contact a Collin County, TX Divorce Lawyer

If your divorce is shaping up to be contentious regarding asset division, it is important that you speak to a McKinney, TX marital asset division attorney from The Ramage Law Group as quickly as possible. As an all-woman firm with multiple attorneys, our focus is on collaborative law and client relationships. Call 972-562-9890 to schedule an initial consultation to discuss your family law issue.