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Understanding community and separate property

Property division is one of the biggest issues to be resolved in a divorce. Texas is a community property state, but some spouses may not realize that some of their assets could be categorized as separate property. There is a clear difference between the two.

Upon dissolution of marriage, any property acquired and debt accumulated during the marriage is presumed to be both spouses', making it community property. Separate property, on the other hand, is that which each spouse owned before the marriage or which was acquired through inheritance or gift prior to or during the marriage. This could also include property obtained with money that is considered separate property. Another type of separate property is compensation from a personal injury lawsuit, excluding the recovery of lost earning capacity. However, inheritances, gifts and lawsuit compensation need to remain separate from marital purchases and bank accounts.

While these are the general guidelines for community and separate property, it is possible for community property to be ruled as separate property if there is clear evidence of it. The evidence may be obtained by tracking the original purchase. In cases where the spouses do not agree as to the separate nature of certain property, documentation is nearly always needed.

When it comes to the division of community property, it is not always divided equally. Instead, the court divides the property how it deems fair based on several factors, including the size of each spouse's estate and monthly income and whether children are involved.

Although a judge finalizes how community property is divided in a divorce, the spouses could draw up their own agreement for the division and get the judge's final approval. The spouses could get mediation help from family law attorneys in creating this agreement.

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