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The Distinction Between Separate Property and Community Property

One of the first questions a divorce client typically asks is, what property will he or she be able to keep once the divorce is final? The answer to this question depends on whether the particular property is classified as separate property or community property.

A spouse's separate property is defined as: (1) the property owned or claimed by the spouse before the marriage; (2) the property acquired by the spouse during the marriage by gift, devise or descent; and (3) any recovery for the spouse's personal injuries during the marriage, unless the recovery is for loss of earning capacity during the marriage.

Each spouse has the burden of proving that a particular piece of property is his or her separate property. Once the court concludes that a piece of property is properly classified as separate property, that property must be awarded to the separate property owner.

Generally, community property consists of all property, other than separate property, acquired by either spouse during the marriage. Community property also includes property in the possession of either spouse during the divorce process, unless the spouse proves, by clear and convincing evidence, that the property should be classified as separate property.

Community property includes real property, personal property, savings accounts, cash, stocks, bonds, vehicles, retirement benefits, income, rental income, life insurance, 401(k) accounts, IRA accounts, and anything else of value.

All community property is subject to a "just and right" division by the court, with due regard for the rights of both spouses and the children of the marriage. In making a just and right division of community property, a court will consider the following factors:

• Fault in the breakdown of the marriage
• Education of each spouse
  
• Health of each spouse
  
• Present earnings of each spouse
  
• Future earning capacity
  
• Which spouse will raise the children
  
• Nature of the particular property
  
• Inheritance a spouse is likely to receive
  
• Tax consequences associated with property
  
• Fraud committed by a spouse against the community estate or the other spouse
  
• Parties' debts

Although the majority of divorce cases are settled out of court, some cases do proceed to trial for a determination of the just and right division of the community estate. Many clients want a guaranteed answer from their divorce attorney at the outset regarding how the court will divide the community estate. However, such a guarantee is unrealistic, since the court's division of property typically depends on the unique facts of each case. Therefore, to ensure that your rights are protected, it is important to provide your divorce attorney with all information relevant to your separate property and the community property you are entitled to receive.

The attorneys at Reed & Riordan, PLLC have experience representing clients who are facing divorce. Contact one of our knowledgeable Dallas divorce lawyers today at 214.570.9555 or 888.229.8985 to answer your questions.

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