Texas Law and Inherited Property Through Divorce

Where Does Texas Law Stand on Inherited Property and Divorce?

As if divorce were not complicated enough, when it comes to dividing up a couple’s assets, it can get even more tricky.

Are the assets you had before your marriage separate property?

What about an inheritance you received during your marriage?

There is no absolute, easy answer to these questions. Like eight other states in the United States, Texas is a community property state where divorce is concerned. This means marital assets are divided right down the middle, regardless of which spouse purchased the assets or whether one spouse made considerably more money during the marriage.

What is Community Property in Texas?

Anything and everything acquired or earned by you or your spouse during your marriage is considered community property. Your paycheck and spouse’s paycheck are considered community property, along with any assets purchased with those incomes. Even if only one spouse worked during your marriage, that income and anything purchased with that income are considered community property.

During a divorce, the court will typically order an equal division of the community property unless there is a good reason for a different division. Factors that the court may consider in determining how to divide the community property include the length of the marriage, the earning capacity of each spouse, the education and skills of each spouse, and any contributions made by one spouse to the education, training, or career of the other spouse.

It is important to note that separate property, which is a property that one spouse owns before the marriage or that one spouse receives as a gift or inheritance during the marriage, is not subject to division during a divorce. However, the court may consider the value of separate property when dividing the community property.

The existence of a prenuptial agreement signed before the marriage—so long as it was done correctly—determines the outcome of asset division, even in a community property state. In other words, a prenuptial agreement will almost always override community property law.

What About Inherited Property During a Texas Divorce?

In most cases, an inheritance received during the marriage is not considered community property in Texas. Most personal injury awards (as an example) are also considered separate property in Texas, with a few exceptions.

The times that inherited property received during the marriage is considered community property is when the property has been commingled with other marital property—especially for marriages that have lasted longer than seven years.

So, assume your Aunt Ida left you a beach house on the coast. Not only does the inheritance have financial value, but it likely also has emotional value. As long as the house remains in your name only – and you do not spend marital assets making improvements or paying taxes – in the event of a divorce, the house might remain yours alone and not subject to being split under community property laws.

Any gift or inheritance you receive during your marriage remains yours so long as you take care not to blend the gift or inherited estate with marital assets.

Financial Property Inheritance in Divorce

If, for example, your father left you $75,000 and you put the money into a joint account you share with your spouse, you have just commingled the inheritance, making it subject to being split between you and your spouse. If you and your spouse spend $30,000 of your marital assets making repairs on the beach house, then upon your divorce, the court might decide to award your spouse a portion of the worth of the home. At the very least, if the repairs resulted in the house being worth significantly more, then your spouse would be entitled to half of the appreciated value.

While no one ever wants to think that their marriage might one day end, financial planning in the form of a prenuptial agreement is a smart move, especially if you think you might be left an inheritance. These rules also apply to anything you have before the marriage unless the asset is commingled once you are married.

If you are still determining whether an inherited property is yours alone, talk to your Texas divorce lawyer to ensure you have a solid understanding of separate property vs. marital property.

How We Can Help

If you are going through a divorce and have inherited a property you want to protect, an experienced Houston divorce attorney at Moving Forward Divorce Lawyers can help you navigate the legal process and advocate for your interests.

There are a few strategies that your attorney can use to help protect your inherited property:

• Prove that the property is separate: If you can provide evidence that the inherited property was owned by you before the marriage or was received by you as a gift or inheritance during the marriage, your attorney can argue that the property is separate and not subject to division in the divorce.
• Keep the property separate: If the inherited property is commingled with community property, it can be challenging to determine what portion is separate and what is community. Your attorney can help you keep the inherited property separate by advising you on the best way to hold the property, such as in a separate bank account or a trust.
• Negotiate a settlement: If you and your spouse can agree on how to divide the property, your attorney can help you negotiate a settlement that protects your inherited property.

It is important to note that the specific steps your attorney can take to protect your inherited property will depend on the specific circumstances of your case. It is always a good idea to consult with an experienced attorney to discuss your options and determine the best course of action.

Contact Our Law Firm Today

If you’re going through a divorce, or just had your divorce finalized and need assistance with property division or inheritance, Moving Forward Divorce Lawyers can help as the laws and procedures can be complex. Since your decisions can significantly impact your financial future, you need someone fighting for you and your rights. Call us at 713-589-4748 or fill out our confidential contact form to learn more about your legal options.

Renae Mundis

Renae is a native of Pennsylvania and the middle child of five girls. She earned her bachelor’s degree in political science from the University of Colorado, Boulder before entering the military as an officer in the Ordnance Corps. After separating from the military, Renae raised her two oldest boys for ten years before returning to the University of Denver where she earned her law degree in 2012. Renae is licensed to practice in the states of Colorado, Kentucky, and Texas. Renae has practiced criminal law as a public defender in Colorado, criminal and family law in her firm in Colorado, and now family law as part of our firm at Moving Forward Divorce Lawyers. When she’s not busy raising her two youngest boys, Renae enjoys jogging, mountain biking, gardening, and boating. Renae is a bit of a foodie and loves to dabble in gourmet cooking. Read more here.