San Antonio, TX asked in Divorce, Estate Planning and Family Law for Texas

Q: Is the purchase of a property protected in Texas during a marriage if the source of the funds from inheritance?

Married couple. The male gets the inheritance and makes a purchase with the inheritance funds. Wanting to know if that purchase is protected from community property in Texas now that they are divorcing.

2 Lawyer Answers
Ronald Lee Baranski Jr
Ronald Lee Baranski Jr
  • Estate Planning Lawyer
  • Allen, TX
  • Licensed in Texas

A: In Texas, all property or income earned during the marriage is deemed community property, excluding gifts and inheritances. Even separate inherited property can be a challenge if marital income is used to pay taxes, remodel, etc. If an inheritance is in cash and that cash comes to be added to the marital estate by placing in marriage bank accounts, then it can totally lose its separate nature due to commingling and become community property.

You should be careful to keep the inheritance in its own bank account, which you can access only. If possible do name a beneficiary POD in the event you pass away so the funds go where you want them. If the purchase is real estate keep it defined as separate and only use inherited funds to improve it, pay rent, taxes, insurance, etc so it retains its separate nature. In Texas, the burden is generally on you to show by CLEAR and CONVINCING evidence that the property is separate and not community.

Take every step possible to track payments, etc. If the purchases you mention are just for ordinary spending, then you should have no issues so long as the funds remain in an account by themselves so that the inheritance can be easily tracked from the estate to that bank account or from one account to another if you change banks along the way.

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  • Estate Planning Lawyer
  • Licensed in Texas

A: In Texas, property acquired during a marriage is typically considered community property and is subject to division upon divorce. However, there are exceptions to this general rule, particularly concerning inheritance.

If one spouse receives an inheritance, those funds are generally considered separate property, not community property. This means that the inheritance belongs solely to the spouse who received it, regardless of whether they were married at the time they inherited the funds.

If the inheritance is kept separate and not comingled with community property, it remains separate property. This distinction is crucial in cases of divorce. However, if the inherited funds are mixed with community funds (for example, by being deposited into a joint bank account) or used to purchase assets held in both spouses' names, those funds or assets might be considered at least partly community property.

In your scenario, if the husband used his inheritance to purchase property and kept the title to that property in his name alone without commingling the funds with community assets, the property is likely to be considered his separate property in the divorce. However, this can vary based on specific circumstances, such as improvements made to the property with community funds or contributions by the non-inheriting spouse that increased the value of the property.

Even if the house is considered community assets, there could be an offset in the calculation of the division of assets.

It's advisable to consult with a legal professional who specializes in family law in Texas to get specific guidance based on the full details of the situation.

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