Christene (Chris) Krupa Downs
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Exploring the Diversity of Community Property in Texas: What You Need to Know

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Christene “Chris” Krupa Downs
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Community Property
Community property

What You Need to Know About Types of Property in Texas

Dividing assets during estate planning, divorce, or when considering a pre- or post-nuptial agreement can quickly get complicated when questions arise about whether an account or piece of property is considered joint or separate. Married Texas couples should understand the distinction between community and separate property and situations in which one spouse may have sole control over community property.

When it comes to estate planning, this distinction becomes especially important. The surviving spouse may have problems claiming certain assets without the right legal protections. Your estate planning lawyer can help you understand the classification of marital assets and work with you and your partner to develop an estate plan that preserves your ownership while you’re alive, as well as solves questions about inheritance of separate and community property.

What is Community Property in Texas?

Texas law defines community property as all earnings and property acquired during the marriage. Community property is legally owned jointly by both spouses. In a divorce, it will be divided in a “just and fair” manner by a Texas family law judge. It doesn’t matter whose income was used to purchase the property or who made the investments – to divide property or allocate it to a specific individual in a will, both spouses own the property, and so both have a say in how it’s disposed of, transferred, and managed.

Exceptions to community property include items or monies that were an inheritance, gift, or settlement from a personal injury case.

Some examples of community property include:

  • House and other real estate
  • Income from employment, including bonuses, salary, and tips
  • Individual contributions to retirement, pensions, or 401K
  • Vehicles, including cars, boats, RVs, or motorcycles
  • Contents of checking, savings, and investment accounts
  • Unemployment benefits or other compensation for lost wages

This isn’t exhaustive—even a toaster purchased during the marriage could be considered community property. An experienced estate planning attorney can help you and your spouse identify all community property.

What is Separate Property in Texas?  

Separate property is property each spouse owned before marriage. However, even after marriage, spouses can acquire separate property (such as an inheritance). If the spouse who acquires the separate property after marriage uses it for the benefit of the couple, the separate assets could be considered commingled with community property. In Texas, there is  a presumption that all property is community property.

Separate property can include:

  • A house purchased before the marriage
  • A vehicle gifted to one spouse
  • Retirement account contributions you made before marriage
  • Jewelry or other gifts from one spouse to another
  • One spouse’s inheritance

Joint and Sole-Controlled Community Property in Texas

In a marriage, each spouse solely manages and controls their separate property as well as their personal earnings, revenue from a solely-owned asset, or maturation or dividends from a solo investment. These assets are referred to as sole management community property.

All other community property is under the joint management, control, and disposition of both spouses, and is called joint management community property.

Planning for Your Future Starts Now

Essential Considerations for Your Estate Planning Needs

As you think about your estate planning, it’s important to think about separate property versus community property to best address that property’s disposition to beneficiaries. And, remember, estate planning isn’t just for the wealthy – we all need to plan for the disposition of our property – and we can benefit from the advice of a skilled estate planning attorney. You don’t know what tomorrow holds, but you can face it confidently after putting legal protections in place for yourself and your family.

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