The short answer to the question, “Is an inheritance considered community property in a Texas divorce” is no. According to Texas divorce law, property acquired “by gift, device, or descent” is separate property. So is property acquired before the marriage. Most personal injury awards are separate property as well. Everything else is community property which is subject to division between the spouses upon divorce.
The long answer is much more complicated. Community and separate property often become commingled. That’s especially true if the marriage lasted longer than seven years, which is the average length of a marriage that ends in divorce.
Usually, inherited property, like a parent’s house, has an emotional value as well as a financial value. To protect this property during a marriage dissolution, a Dallas divorce lawyer must intervene early and decisively. The inherited property rules, and the issues these transfers raise, are far too complex to leave matters to chance.
Property Classification Issues
We mentioned commingling above. Eggs and flour are distinctly separate ingredients. But once they become commingled, or mixed together, it’s almost impossible to distinguish one from the other. Property in a divorce is much the same.
Incidentally, the “property” could be an asset or debt. Assume the husband’s mother took out a reverse mortgage on her home before she died. To keep the house in the family, the husband borrowed money to pay off the loan. He then used money from his paycheck to make the payments.
The husband’s mother’s house is separate property under the law. But also under the law, his loan payments came from a community asset (any money earned during the marriage is usually community property). So, upon divorce, the community estate might be entitled to reimbursement for the money put into the house.
A premarital agreement often solves these classification issues, and other similar issues, in advance. Prenups designate a property as separate or community. Furthermore, these agreements make the parties more aware of commingling issues. So, they are more likely to avoid such behavior and thus avoid additional disputes in this area.
Property Division Issues
If an inherited property becomes marital property, because of commingling or something else, it must be divided according to state law.
Most people know that Texas is a community property state. Many people don’t know that the community property law in the Lone Star State is basically a presumption. So, in a marriage dissolution, the judge can order an unequal property division. Some factors to consider include:
- Future Earning Capacity: A divorce must not be an unfair financial burden on either party. If one spouse’s future earning capacity is significantly lower, due to age, health, educational level, or something else, a judge may compensate by giving that spouse a disproportionately large share of the community property.
- Custody of Minor Children: Kids are expensive. Child support offsets some of these costs, but not all of them. Additional property could lessen the financial burden. Custody matters could involve property divisions in other ways. For example, it’s usually in the children’s best interests for them to remain in the family home.
- Non-economic Contributions to the Marriage: Economic contributions are relatively easy to calculate. Non-economic contributions are just as valuable and often difficult to assess. These contributions are usually very high if one spouse gave up a career to become a caregiver. In other situations, the so-called homemaker factor is negligible at best.
Usually, the party requesting a disproportionate community property division has the burden of proof in these matters. Since the community property presumption is so strong, most North Texas judges require considerable evidence in this area.
Frequently Asked Questions About Community Property In Texas
What is community property in Texas?
Community property includes all property and earnings acquired by either spouse during the marriage, except for gifts, inheritances, and personal injury settlements. This means that both spouses have an equal ownership interest in the property, regardless of whose name is on the title or who earned the income.
What is separate property in Texas?
Separate property includes property owned by one spouse before the marriage, property acquired by gift, devise, or descent during the marriage, and recovery for personal injuries sustained by one spouse, except for loss of earning capacity. Separate property is not subject to division during a divorce.
How is community property divided in a divorce?
Community property is divided in a manner that the court deems “just and right”. This does not necessarily mean a 50/50 split, but rather a fair distribution based on various factors, such as the needs of the children, the education and earning capacity of each spouse, and any fault in the breakup of the marriage.
Can community property be divided equally?
While the court aims for a fair distribution, it is not required to divide community property equally. The division is based on what the court considers just and right, taking into account the specific circumstances of each case.
What happens to debts in a community property state like Texas?
Debts incurred during the marriage are considered community debts and are divided along with the community property. Each spouse is responsible for their share of the community debts, regardless of whose name is on the account.
Are there any exceptions to community property rules in Texas?
Yes, there are exceptions to community property rules, such as property acquired before the marriage, gifts, inheritances, and personal injury settlements (except for loss of earning capacity). These exceptions are considered separate property and are not subject to division during a divorce.
How can I protect my separate property in a divorce?
To protect your separate property, it is important to keep clear records and documentation of any property acquired before the marriage or through gifts, inheritances, or personal injury settlements. Consulting with a family law attorney can also help ensure that your separate property is properly identified and protected.
What if we have a prenuptial agreement that addresses property division?
If you have a valid prenuptial agreement that addresses property division, the court will generally follow the terms of the agreement, as long as it is fair and enforceable.
Can community property be transferred to one spouse without the other’s consent?
Generally, community property cannot be transferred to one spouse without the other’s consent. Both spouses have an equal ownership interest in the property, and any transfer or sale of community property typically requires the agreement of both parties.
What if one spouse tries to hide or transfer community property before the divorce?
If one spouse tries to hide or transfer community property before the divorce, the court can take action to recover the property and ensure a fair division. It is important to disclose all assets and property during the divorce proceedings to avoid any legal complications.
Contact Our Diligent Dallas Divorce Attorney
Inherited property is usually, but not always, separate property. For a confidential consultation with an experienced divorce attorney in Dallas, contact Orsinger, Nelson, Downing & Anderson, LLP by calling (214) 273-2400. Our law firm has more Super Lawyers than any other legal organization in Texas.
(Updated 1/28/2025)
