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How to Keep Separate Marital Property Separate in a Texas Divorce

If a Court determines an asset is your separate property, you keep it without any sharing or interference by your spouse and is not subject to division.

Any property owned prior to marriage or that is inherited or received by gift during marriage is separate property.  Any mutations of separate property remain separate.  Example:  You inherit 100 shares of Exxon from Aunt Minnie.  You sell the Exxon and buy IBM.  The IBM stock remains separate.  The appreciation of separate assets remains separate.  Aunt Minnie’s Exxon stock is worth $100 when you receive it. At the time of divorce it  is worth $1,000.00.  The $900.00 profit remains separate.

There are also several contractual methods that keep assets separate during a divorce.

Prenuptial Agreements

A prenuptial agreement is a contract made by a couple before marriage which details the ownership of assets in the case of divorce. Because prenuptial agreements can successfully keep property separate during and after a divorce, these agreement play important roles and allow spouses to greatly determine how marital assets are divided.

While it is recommended that spouses seeking to keep some assets separate during a divorce create prenuptial agreements, not all couples create such agreements. If a spouse has failed to draft a prenuptial agreement or the prenuptial agreement does not cover specific assets a spouse would like to remain separate after a divorce, it is even more crucial for a spouse to understand the various laws governing separate marital property.

Commingling Marital Property

Even separate marital property that is commingled has the potential to lose its quality as a separate marital asset. Commingling is a term that refers to the combining of each spouse’s separate property. A spouse can avoid commingling by maintaining separate financial accounts and never jointly owning property with a spouse.  If you get Aunt Minnie’s  stock, it should be put in a separate account in your name and any interest or dividend (which are community property) should be swept on at least a quarterly basis.

Separate Marital Property

Texas law classifies several types of assets as separate marital property. These groups include several different types of property.

  • Property separated by written agreement.
  • Personal Injuries (pain and suffering). Compensation for personal injuries a spouse receives during marriage. This amount excludes any amount awarded for loss of earning capacity while the two spouses were married to each other.
  • Acquired through gift, property, will, or inheritance. To establish that property was received as a gift, an individual will need to prove three elements: intent to make a gift, delivery of the property, and acceptance of the property.
  • Owned by a spouse before marriage.

To be classified as separate marital property, the asset in question must fall into one of these defined groups because courts assume that any other property in the possession of either spouse during a divorce is community property. Courts also tend to consider income from any of these types of separate assets as community rather than property, which means that a spouse might be tasked with proving the sources of financial amounts are also separate marital property to keep this additional income separate.

Advice to Keep Separate Marital Property

In review, the following three pieces of advice will greatly increase the chances that a spouse will be able to keep separate marital property after a divorce:

  • Write a prenuptial agreement prior to marriage.
  • Avoid commingling assets with your spouse.
  • Determine whether the property wish to keep classifies as separate property.

Understanding the various laws regarding separate property can prove essential during a divorce. If you are faced with issues concerning separate property, you deserve a lawyer who understands that separate property should remain separate even after a divorce. The Texas lawyers at Conner & Lindamood, P.C. have successfully won cases for clients in similar situations and will passionately represent your case to ensure positive results.

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