Who has the right to “Manage” marital property – As we have learned from Texas community-property laws, each spouse has equal ownership of what has been determined to be community property, regardless of who purchased it, earned it, or acquired it. Like I have said many time before, what is yours is mine and what is mine is yours.
But do they have equal management rights of said property? Not necessarily.
A spouse’s management rights over a property are not the same as ownership, and they can fluctuate depending on the property in question. By management rights, I mean, having the authority to manage, control, and dispose of that property without the other spouse’s knowledge or consent.
Per the Texas Family Code, the community-property system divides spouses’ management rights over community property into two categories: Sole-Management Rights and Joint-Management Rights.
Let’s discuss both.
Sole-Management Rights over community property – This is when a spouse has the exclusive right to manage community property that would have been that spouse’s separate property if they had acquired it while still single. It comes into play with personal earnings (salary), revenue from a separate property such as a house, or personal-injury damages.
The money is still considered community property, but how that spouse manages it is up to them. They can sell, transfer, or gift the property to another person. An example could be a spouse who has sole-management rights and changes the beneficiary designation on a community life insurance policy.
A bit confusing, but true. The only way around this is if that same spouse with sole-management rights commingles their salary in the same bank account with the other spouse’s salary. In that case, the property in question becomes joint-management community property.
Joint-Management rights over community property – This is community property that each spouse must manage equally. Each spouse must give their consent to any transaction involving this type of property. Examples of joint-management community property include:
- Property purchased during marriage with community funds or on community credit.
- Community property held in the name of both spouses.
- Income and debts generated from community property.
This was merely meant to give you a brief introduction into management rights. Over the next few blogs, we will discuss management rights over separate property and how spouse’s can modify management rights. If there is something we have not covered that you need further explanation on, please contact our Nelson Law Group, PC office to let us know.