Is the determination of whether property is
community or separate
Texas’s community property system, unlike
other CP states, is constitutionally driven based
on the Constitution of 1876 as amended in
1948, 1980, 1988, and 2000, which expanded
the definitions of separate property.

Why does it matter?
A Judge can divide community property but can
never divest a party of separate property. If
that happens, the party’s constitutional rights
have been violated.
Inception of the Title
The character of the property, whether
separate property or community property, is
fixed at the time a person first acquires an
ownership interest in the property.

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What is included:
Pay of spouses, employee benefits and
retirement earned during the marriage
Earnings of children
Income from separate property
Property acquired w/ Community Debt
Separate property is defined by the Texas
Constitution as that acquired prior to the
marriage or acquired after by gift, devise, or
descent, Tex. Const. Art. XVI, sec. 15.


Texas Family Code 3.001 adds recovery for
personal injuries sustained during marriage
except for loss of earning capacity

The burden to prove property is separate is
by “clear and convincing evidence.”

The same as terminating parental rights

Documents, admissions and the testimony of
fact or expert witnesses can be used to prove
an item is separate property.

What about self-serving testimony that is not
corroborated by documents of any kind?

What about self-serving testimony that is not
corroborated by documents or other
testimony of any kind?

It depends!

If the testimony is uncontradicted, Courts of
Appeal in Dallas, Fort Worth and Beaumont
have sustained the testimony as meeting the
clear and convincing standard.

But the 1st Court of Appeals in Houston has
said: “Mere testimony that property was
purchased with separate funds, without
tracing of the funds, is generally insufficient
to rebut the [community property]
presumption.” .

But the 1st Court of Appeals in Houston has
said: “Mere testimony that property was
purchased with separate funds, without
tracing of the funds, is generally insufficient
to rebut the [community property]
presumption.” .
Trouble in Paradise..

Adam sues a former business associate for
breach of contract. During the course of the
lawsuit, he meets and falls in love with Eve,
the court reporter, and they elope. The case
proceeds to trial, and the jury awards the
Adam a handsome sum. Is the jury award
separate or community property?


The jury award is the husband’s separate
property. Though they were married at the time
the jury awarded the damages, the inception-oftitle rule characterizes the property as separate
or community “when a party first has right of
claim to the property.” Smith v. Smith, 22 S.W.3d
140, 145 (Tex. App.—Houston [14th Dist.] no
pet.)
“[E]ven though he did not recover for these
damages until after the marriage, the damages
were his separate property.” Id.

Adam is injured in a car accident and decides
to sue the driver who struck him. The jury
returns a verdict in his favor for pain and
suffering. Is the jury award separate or
community property?


The jury award from the husband’s personal
injury suit is his separate property.
Section 3.001 of the Texas Family Codes
states: “A spouses separate property consists
of: … (3) the recovery for personal injuries
sustained by the spouse during the marriage,
except for recovery for loss of earning
capacity during the marriage.”

Adam gives Eve a unique necklace crafted by
a local artisan for their wedding anniversary.
The jewelry designer dies suddenly, causing
the value of his work to skyrocket. Learning
this, Eve decides she’d rather have the money
and sells the necklace for five times what her
husband paid for it. Adam gets angry at her
lack of sentiment and files for divorce, asking
for half of the proceeds from the sale of the
necklace. What is the result at trial?


The money from the sale of the necklace is
the Eve’s separate property.
Section 3.005 of the Texas Family Code
states: “If one spouse makes a gift of
property to the other spouse, the gift is
presumed to include all the income and
property that may arise from that property.”
(emphasis added)

Adam gives Eve a unique necklace crafted by
a local artisan for their wedding anniversary.
The jewelry designer dies suddenly, causing
the value of his work to skyrocket. Learning
this, Eve pays for the necklace to be insured.
Three weeks later, their home is broken into,
and the necklace is stolen. Eve files a claim
and receives money. Is the money her
separate property?


The insurance money is the wife’s separate
property.
Texas Family Code section 3.008(a) states:
“Insurance proceeds paid or payable that
arise from a casualty loss to property during
marriage are characterized in the same
manner as the property to which the claim is
attributable.”

Eve uses the insurance money from the stolen
necklace to purchase a new 80” LED TV so
she can watch her stories in style. Enraged
that his wife is so obsessed with soap operas,
Adam files for divorce and lists the television
as community property. Is it?


No. The television is the Eve’s separate
property as it was purchased with her
separate property. Separate property retains
its characteristic as separate property
through exchanges as long as the
transactions can be traced and proved with
clear and convincing evidence.
“[S]eparate property begat separate property.”
Ridgell v. Ridgell, 960 S.W.2d 144, 150 (Tex.
App.—Corpus Christi 1997, no pet.)

Before they were married Adam wanted to
surprise his bride-to-be with a new home. In
secret, he meets with a real estate agent and
puts down money on a house, signing an
earnest money contract. After the
honeymoon, Adam and Eve close on the
house, and he signs the mortgage. Is the
home their community property?

No. Adam “acquired a claim to the property at
the time the purchase money contract was
entered into. The earnest money date being
prior to the marriage of the parties, the
[husband’s] right of claim to the property
preceded the marriage, and the character of
the property as separate property was
established.” Wierzchula v. Wierzchula, 623
S.W.2d 730, 732 (Tex. App.—Houston [1st
Dist.] no writ).

What about the mortgage? Community or
Separate?


Separate. Though debt acquired during a
marriage is presumed to be community debt,
here the husband applied for the mortgage
“as a single man,” thus the lender looked only
at his ability to pay the mortgage. Wierzchula
v. Wierzchula, 623 S.W.2d 730, 732 (Tex.
App.—Houston [1st Dist.] no writ).
“The agreement between the borrower and
the creditor is one of the primary indicators
of the character of the loan to be made.” Id.

Both of their names appear on the deed. Is
the house still Adam’s separate property?

Maybe not. Adding Eve’s name to the deed
created “the presumption that one spouse
intends to make a gift to the other of onehalf of his separate contribution made to
purchase real estate during marriage when
title to such real estate is taken in the name
of both spouses.” Whorrall v. Whorrall, 691
S.W.2d 32, 35 (Tex. App.—Austin 1985, writ
dism’d).

Before they were married the couple buys a
poodle before their wedding using only the
Adam’s money. After a few years of marital
and doggie bliss, the dog breeds with a
cocker spaniel and has five puppies of her
own. Not having the space for six dogs, the
couple decides to sell the adorable puppies.
Is the income from the cockapoos separate or
community property?

The proceeds from the sale of the puppies is
community property. Income from separate
property is community property. See generally
Alsenz v. Alsenz, 101 S.W.3d 648, 653 (Tex.
App.—Houston [1st Dist.] 2003, pet. denied)
(determining that “[i]n general, income produced
from separate property is considered community
property”), and see Bobbitt v. Bass, 713 S.W.2d
217, 220 (Tex. App.—El Paso 1986, writ dism’d)
(finding “[t]he increase of separate property
cattle” to be community property).

Eve gives Adam a poodle for their first
Christmas together. After a few years of
marital and doggie bliss, the dog breeds with
a cocker spaniel and has five puppies of her
own. Not having the space for six dogs, the
couple decides to sell the adorable puppies.
Is the income from the cockapoos separate or
community property?


The proceeds from the sale of the puppies is the
Adam’s separate property. Since the poodle was
a gift, the dog is the husband’s separate
property. New born animals are treated as
income.
Section 3.005 of the Texas Family Code states: “If
one spouse makes a gift of property to the other
spouse, the gift is presumed to include all the
income and property that may arise from that
property.” (emphasis added)

When single Adam owned a tract of
unimproved land. After he is married, he and
Eve decide to build a home on the lot. They
live there for ten years before he files for
divorce. He states the house is his separate
property? Is it?

Yes. “ Any improvements made on separate
property, including a residence, are
considered the separate property of the land
owner.” In re Marriage of Morris, 12 S.W.3d
877, 881-82 (Tex. App.—Texarkana 2000,
no pet.)

Eve inherits unimproved land. She and Adam
explore the estate, find oil, and immediately
lease out the mineral rights. Are the royalties
her separate property?


Yes. The land was her separate property because
it was bequeathed to her Section 3.001 of the
Texas Family Codes states: “A spouse’s separate
property consists of: … (2) the property acquired
by the spouse during the marriage by gift,
devise, or descent.”
The royalties were also her separate property.
“[S]o long as separate property can be definitely
traced and identified it remains separate property
regardless of the fact that the separate property
may undergo 'mutations and changes'.” Norris v.
Vaughan, 260 S.W.2d 676, 679 (Tex. 1953).

Eve becomes an artist, she digs clay from
Adam’s separate property land to form into
pots and vases for sale. She is quite
successful at this and earns a lot of money
for them. Years later, he files for divorce.
Adam argues that the income from the sale of
her pottery is his separate property. Is it?

No. While the land was the husband’s
separate property and the clay alone may
have been, effort was made by the
community in the form of her craft “to
impress community character upon the
separate estate.” Norris v. Vaughan, 260
S.W.2d 676, 680 (Tex. 1953).