Separate property is generally property that a spouse acquired before marriage—or acquired by gift or inheritance during marriage—and is not subject to division upon divorce. In contrast, marital property is generally property that is acquired during marriage, is jointly owned by the spouses, and is subject to division upon divorce—whether the spouses reside in (1) an equitable distribution or common law property state or (2) in a community property state.
Community property states generally include Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In these states, divorce courts generally start with the presumption that the marital property is owned equally by the spouses and will be divided equally upon divorce.
In other states—so-called equitable distribution or common law property states—the divorce court attempts to divide the spouses’ assets equitably (fairly) and may consider a spouse’s separate property in deciding to make an unequal division of the spouses’ marital property. In practice, the difference between the division of assets in community property states and in equitable distribution states is sometimes not as great as it may seem, as the court in a community property state may have the discretion to divide the spouses’ community property on a 60-40, 70-30, or other unequal basis.
In Texas, which is a community property state, the law presumes that all property acquired by spouses during their marriage is community property and is owned equally by both spouses. This property is subject to equal division upon divorce. Separate property, on the other hand, includes assets acquired before the marriage or received as a gift or inheritance during the marriage, and it is not subject to division in a divorce. While the starting point for division of assets in Texas is a 50-50 split, courts may consider factors such as fault in the breakup of the marriage, disparity of earning power, health, and future employability to adjust the division. However, separate property remains with the spouse who owns it, unless it has been commingled with community property in a way that loses its separate character.
