Community Property

Community Property and Homestead ## Texas as a Community Property State Texas is one of nine community property states. Property acquired by either spouse during the course of the marriage is presumed to be owned equally (50/50) by both spouses, regardless of whose name is on the title. This has direct implications for real estate: When selling or mortgaging community property, both spouses must sign the deed or deed of trust, even if only one spouse's name appears on the title. A conveyance signed by only one spouse is voidable by the non-signing spouse within a statutory period — a serious title defect. Community property: Acquired during the marriage through wages, business income, or investment returns. Separate property: Owned before the marriage, or received during the marriage as a gift or through inheritance. Separate property can be conveyed by the owner alone. Commingling problem: If a spouse uses separate property funds as a down payment on a property, then pays the mortgage with community funds, the property's character becomes mixed. Separate property character is preserved through proper tracing — documenting the flow of funds. Without tracing, the community funds can create a community interest in previously separate property. Real-world example: Husband owns a rental property free-and-clear from before the marriage. After the wedding, the couple uses joint checking account (community funds) to pay property taxes and maintenance. When they try to sell, the title company discovers that community funds improved the property and requires both spouses to sign the deed — the community may have an equitable interest due to commingling. ## Texas Homestead Protection Texas homestead law is among the most protective in the nation. Article XVI, Section…