Texas Law - Better Estate Planning 1 COMMUNITY AND SEPARATE PROPERTY IN TEXAS Eugene M McElyea Community property is the basic property ownership

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Better Estate Planning COMMUNITY AND SEPARATE PROPERTY IN TEXAS Eugene M. McElyea* Community property is the basic property ownership law between husband and wife in Texas. This system developed in Texas as a result of Spanish influence upon our laws. Presently, ten states, including Texas, retain the community property system. The other nine states are Arizona, California, Hawaii, Idaho, Louisiana, Nevada, New Mexico, Washington, and Wisconsin. NOTE: Alaska enacted a quasi-community property law recently. Texas, however, has developed its own laws based upon this general principle. Community ownership in a marriage means that each spouse owns in his or her own right an equal, undivided portion of all marital property. Separate property is property acquired during the marriage by gift, inheritance, or under a will or owned by a spouse before marriage. Recoveries for personal injuries may also be maintained as separate property. While this definition may seem simple, in practice it has proven very difficult at times to properly apply. The problem of determining the exact nature of property arises generally when the marriage has ended by death or is nearing an end by divorce. As long as husband and wife live together in harmony and plan properly in contemplating death, community property ownership can be a very satisfactory arrangement. When the marriage breaks down or one spouse dies without a will, problems of proving the property status can be complex and costly. Since the character of property as separate or community is fixed at the time it is acquired by one or both spouses, it may difficult at a distant future date to clearly establish facts that existed at acquisition time. To simplify problems of distinguishing the difference between separate and community property, the law presumes all marital property to be community unless evidence is produced clearly demonstrating its separate character. Without maintenance of adequate financial records segregating separate assets, it is easy for them to become mingled with community funds and thus lose their separate identity. While the courts try to trace an asset to its source, it is not certain that this can be accomplished. Recent changes in Texas law have modified the husband's traditional role as "manager" of community property. In an effort to extend more rights to married women, the law has declared that all community property is now subject to joint management by the spouses except that each spouse, husband and wife has sole management of his personal earnings, revenue from his separate property, recoveries for individual personal injuries and the increase of property over which he has sole management. It is also interesting to note that Texas regards
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This note was uploaded on 02/06/2011 for the course HDF 322 taught by Professor Kitt during the Spring '08 term at University of Texas at Austin.

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Texas Law - Better Estate Planning 1 COMMUNITY AND SEPARATE PROPERTY IN TEXAS Eugene M McElyea Community property is the basic property ownership

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