Grey Divorce: Separate vs. Community Property

What is Grey Divorce?

With a demographic trend of an increased divorce rate among the “Baby Boomers,” the ability of a law firm to recognize and properly handle the special issues in a “Grey Divorce” is imperative in obtaining a good result. Property matters are one of the primary issues in a Grey Divorce. The Grey Divorce is one that occurs in marriages of people who are over 50 years of age, often after the children are out of the household and financial and/or properties are the focus of both parties. At the time of divorce, the accumulated property of the marriage has a “characterization” that should be understood by a party before the division of that property. Property can be characterized as separate, community, or mixed character, which contains both separate and community interests; how the property is characterized in a divorce will affect the division of the property in the case.

It is important to understand what characterization of property means when you’re going through a divorce, so here is an overview of the subject:

Separate Property

Separate property refers to items that belong to only one of the spouses. However, some states define this law differently. Some generalities to this ruling do apply, though. For example, property will be considered separate if:

  • The property was owned by one of the spouses preceding the marriage
  • The property was gifted directly to the spouse during or before the marriage
  • It was an inheritance received during or before the marriage
  • An agreement meeting state requirements is made in writing by spouses stating the property in question is separate property (called transmutation or postnuptial agreement)
  • The property was acquired by one spouse specifically with the intention of keeping it separate by using separate assets
  • Portions of personal injury awards for pain and suffering

Community Property

If you live in a community property state such as Texas, this means you own all assets acquired throughout your marriage 50/50. The Texas Family Code states that community property shall be divided “in a manner that the court deems just and right,” which may be different than 50/50. Examples of community property include:

  • Your earnings, as well as your spouse’s earnings
  • Any and all property bought with these earnings, such as your home, furnishings or valuable items like paintings or antiques
  • All debt incurred throughout your marriage, including the home mortgage
  • Separate property that has become too mixed in with community property to make identification difficult or impossible

Although Texas is a community property state, not all states divide property in this way. Other community property states include:

  • Alaska (*when spouses create agreements)
  • Arizona
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

*In the state of Alaska, each spouse can sign an agreement in which they make determinations regarding which assets are community property.

Confusion Could Remain

Because there are many rules concerning Separate Property versus Community Property, it would benefit you to consult with an attorney about how the characterization of your property applies to your divorce case. That way, you can prepare for what to expect and how to make decisions during the divorce proceedings. You’ll need to obtain records for the proceedings as well as a list of all your assets, so it’s imperative to have a firm understanding of your expectations throughout the divorce process. By doing so, you can help you and your spouse reach an amicable settlement, when that is possible, of it settlement is not possible you will be better prepared for any proceedings before the court during your divorce.

David S. Bouschor is a board-certified family law attorney. As a board-certified attorney, he brings a special knowledge of separate and community property and how to handle those issues. You can contact the Law Office of David S. Bouschor II at (940) 202-8323
or by filling out the form on this page.

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