The property that people own during marriage typically falls into two main categories. The vast majority of assets acquired during a marriage are likely marital property that may be subject to community property rules if the couple divorces.
However, some resources may actually be the separate property of one spouse or the other. Texas state statutes clearly define separate property to help limit conflict during divorce proceedings. There are three distinct types of resources that Texas treats as separate property for the purpose of divorce. The following are the three categories of property that is generally treated as separate under Texas state law.
Assets owned prior to marriage
People may accumulate a variety of high-value resources before they ever decide to get married. Those resources may range from a small business that they started to a vehicle. They may have made contributions to a retirement account or established a valuable collection of sports memorabilia. Those assets typically remain the separate property of the spouse who acquired them prior to marriage unless commingling occurs. They don’t have to divide those assets when they divorce, although they may have to provide a list of them and estimate their value.
Gifts and inherited property
Resources that people receive before or during the marriage from outside parties can be separate property as well. Gifts received from loved ones or an inheritance provided by family members can remain the separate property of one spouse. However, some gifts and inheritances could end up included in the marital estate if commingling occurs. Spouses typically need to make reasonable attempts to keep their separate property received from others distinct from marital resources.
Personal injury recoveries
Maybe one spouse fell down the stairs out in front of an accountant’s office because of a loose handrail. Perhaps they sustained major injuries in a collision caused by a drunk driver. When one party causes significant harm to another through negligence or misconduct, the injured party may ask the courts for compensation.
Typically, funds granted to either spouse in a personal injury lawsuit remain their separate property if they divorce. However, the law does include an exception. Any recovery for lost earning potential or wages may be part of the marital estate. After all, the reduction in one spouse’s earning potential can have significant implications for the other spouse.
Individuals who can identify their separate property can more effectively protect some of their resources as they prepare for property division proceedings in a Texas divorce. Learning more about how the state handles complex property division scenarios can be beneficial for those worried about their financial status after divorce.