Marital property also referred to as community property, is defined as any assets that a spouse accrues during a marriage. Texas is a community property state. When the court divides a couple’s assets during a divorce, the presumption under the law is that all marital property is owned equally by both spouses. Most assets acquired during a marriage will belong to both spouses and the court will be divide assets in a “just and right” manner.
While it sounds like everything someone acquires while married will be considered a marital asset, that is not the case. Any assets that are separate property are not considered marital assets and will stay with the spouse who owns them.
While most assets acquired during a marriage are marital property, anything one spouse inherits in their own name is a separate asset. Similarly, a gift to only one spouse is also a separate asset. Finally, if a spouse successfully settles a personal injury claim or obtains a jury verdict in their favor, the award is considered separate property. The only exception to this is the portion of the award designated for lost wages, provided that period was while the marriage was still in effect.
Of course, Texas’ community property laws do not work for every couple. For example, couples who get married later in life may have worked hard for most of their life to accrue assets and may want to keep their finances entirely separate, even during the marriage. This can be accomplished by drafting a premarital (prenuptial) or post-marital (post-nuptial) agreement outlining the couple’s desires. However, if no action is taken, the court will apply the default community property rules.