What do we mean by Community-Property State?

What do we mean by Community-Property State?What do we mean by Community-Property State? – If you have lived in Texas for a while, then it is a safe bet you have heard the term community-property state thrown around a time or two. That term is so commonplace that it’s likely most family law attorneys assume everyone knows what it means.

But the truth is, there are a lot of people who do not. So let’s fix that.

First a little background from the Texas Family Code. Marital property law governs the property rights of married people. The main reason why lawmakers opted to have different property laws for married and single people was to provide added support and protection while also recognizing equality and promoting fairness between husbands and wives.

For years, laws favored husbands in the management and ownership of property. As society progressed, laws were changed to reflect more equal ownership in property.

In the United States marital property laws have evolved into two systems: the community-property system and the common-law system. Texas and eight other states use the community-property system, a regime under which most property or belongings acquired during a marriage are considered jointly owned by both spouses and are divided upon divorce, annulment or death.

Notice the word “most.” In Texas, all marital property is characterized as separate, community or mixed.

Community Property – Defined as property acquired or created during the marriage by either spouse, with each spouse sharing equal ownership. In a divorce, all assets and liabilities identified and characterized as the spouses’ community property must be fairly divided between the spouses.

Separate Property – Property that came before the marriage (i.e. one spouse already owned a house, received an inheritance, or property as a gift from a third party). Because the property was owned individually by one spouse and then brought into the marriage, a court cannot legally split ownership.

Mixed Property – Property is considered mixed when it consists of both separate and community property. For example, when both separate and community funds are used to purchase property – such as a house.

There is a lot that goes into marital property law, especially how these laws affect marriages from state to state. No two states use a particular system (community-property or common-law) in the exact same way. I will attack those in subsequent blogs, so stay tuned.

In the meantime, if you have questions regarding this blog or any of our previous pieces, please contact our staff at Nelson Law Group, PC. We will be glad to help you.