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Keeping separate property separate in a divorce

On Behalf of | May 22, 2017 | Divorce

Whether Texas residents own a business, have a retirement plan or own other significant assets when getting married, they may want to consider protecting them. Since Texas is a community property state, the courts begin with the presumption that all of the assets are community property. In order to rebut this presumption and keep any property acquired prior to the marriage, certain steps need to be taken to keep them separate. Doing so may become important in any subsequent divorce proceedings.

Even though separate assets will remain the property of the party proving they are not community property, any financial gain during the marriage that is attributed to such an asset could still be subject to division. For example, if one spouse owns a home prior to marriage, any upgrades, repairs or maintenance that increases its value during the marriage could give the other spouse a stake in the home if the marriage ends. An appraisal of the home at the time of the marriage could help establish what that stake might be.

It is important to keep separate assets separate. This means that non-community funds should not be used to purchase marital property or pay marital debts. The converse is also true.

Whenever separate assets are commingled with community assets, the separate asset could become subject to division. Keeping good records is vital to provide documentary evidence that assets were not commingled. Those records should also provide a way to illustrate that only a portion of an asset, if any, is subject to division if it increased in value during the marriage.

Knowing what assets can be kept separate versus those in which a spouse may gain an interest can challenging. A prenuptial agreement could certainly help in this endeavor. Otherwise, those distinctions will need to be made at the time of the divorce. An attorney would be invaluable in making these determinations and helping to formally establish that certain specified property is actually separate and not part of the Texas property division process.

Source: Findlaw, “Managing Marital Property – Do’s and Dont’s“, Accessed on May 19, 2017


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