Tracing of Separate Property Assets

Austin Area Marital Property and Separate Property Attorneys

One of most important issues in resolving a complex divorce is often proving or rebutting a separate property claim. The Texas Family Code states that a spouse's separate property consists of "(1) the property owned or claimed by the spouse before marriage; (2) the property acquired by the spouse during marriage by gift, devise, or descent; and (3) the recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage." Tex. Fam. Code 3.001. Community property consists of all other property owned by the spouses. Tex. Fam. Code 3.002. A Texas court does not have the ability to divest or take away from a spouse his or her separate property and will only divide the parties’ community property. Eggemeyer v. Eggemeyer, 554 S.W.2d 137, 140-141 (Tex. 1987). Thus, if a spouse can prove that some property is separate property, that property will be taken off the table and not subject to division.

All marital property is presumed by a court to be community property. Tex. Fam. Code 3.003. In order to overcome this presumption, a spouse who wishes to claim property as separate property must show that the property is separate property by "clear and convincing evidence." Tex. Fam. Code 3.003. Ideally, a spouse's separate assets will be easily identifiable with adequate documentation to prove that the asset is separate property. However, things can rapidly become complex when separate property becomes mixed with community property or when there is a dispute about the origin of property. Piper & Turner, PLLC, have extensive experience in dealing with the identification and tracing of separate property assets.

In Texas, the characterization of property as either community or separate is determined by the inception of title to the property. Jensen v. Jensen, 665 S.W.2d 107, 109 (Tex. 1984). In other words, a court will look to when the right to the property by one of the spouses vested, and will then determine the character of the property. If property is claimed to be separate property because it was owned before the marriage, the spouse claiming the property to be separate will have to show that he or she received right to ownership of the property prior to marriage. This can be done by presenting the court with public records, deeds to property, closing documents, bank statements showing the purchase of the property, along with other evidence. If property is claimed to be separate because it was a gift or inheritance, the spouse claiming the property to be separate property can prove the origin of the property by presenting the court with evidence such as a copy of a will, gift tax returns, or testimony from the donor of the gift.

Things become even more complicated when separate property asset become mixed with community property assets. For example, a spouse may have a retirement account which has separate property funds owned before marriage, but that spouse has contributed to the retirement account during the marriage or dividends from the account have been reinvested into the account. The burden of proving separate property "may be discharged by tracing and clearly identifying the property claimed to be separate property." In re Marriage of Thurmond, 888 S.W.2d at 274; Welder v. Welder, 794 S.W.2d 420, 424 (Tex. App.Corpus Christi 1990, no writ) ("[W]hen separate property has not been commingled or its identity as such can be traced, the statutory presumption is dispelled. As long as separate property can be definitely traced and identified, it remains separate property.") In order to "trace" separate proprety that has been mixed with community property, a forensic CPA will look at the documentation of the asset and identify the separate property in the asset. This process is not always simple, but it can be accomplished with the help of skilled attorneys who know how to utilize the help of forensic CPAs.

Identifying separate property and "tracing" separate property, is often a complex process that very often involves the use of expert witnesses, such as forensic CPAs. If the process is not done properly, the spouse could lose the claim of separate property and the property will be divided as if it is all community property. Literally hundreds of thousands of dollars could be lost if not traced properly.

At Piper & Turner, PLLC, we have an extensive network of forensic CPAs who can identify and/or trace your separate property. We understand what tests must be met both by the lawyers and the accountants to prove separate property to a court. Our experience and training has led us to be considered one of the preeminent firms in both defending and attacking separate property traces and claims.

Our experienced trial attorneys understand the methods required to identify and trace separate property interests.Attorney James W. Piper is a Board Certified family law attorney who has been serving families throughout Texas for more than 36 years. Mr. Piper has been named a Super Lawyer by Texas Monthly Magazine, is an AV rated attorney by Martindale-Hubbell, is listed in Bar Register of Preeminent Lawyers, is a member of the Texas Academy of Family Law Specialists and is widely considered one of the most well respected family law attorneys in Central Texas. Mr. Piper's partner, Travis L. Turner, also a Board Certified family law attorney, has been named a Rising Star by Texas Monthly Magazine and is a member of the Texas Academy of Family Law Specialists. Mr. Turner, with his extensive litigation and courtroom experience, has rapidly become known as one of the most prominent young family law attorneys in the Austin area. Both Mr. Piper and Mr. Turner, along with the attorneys of Piper & Turner, PLLC, form a unique and unmatched team of lawyers with the talent and experience needed to gain success for our clients both inside and outside of the courtroom.

Because our attorneys and staff are focused exclusively on family law matters, we have the knowledge and resources to handle the simplest to the most complex family law matters. Founding partner, James W. Piper is a board certified in family law attorney who has been serving families throughout Texas for more than 36 years. Mr. Piper has been named a Super Lawyer, is an AV rated attorney by Martindale-Hubbell, is listed in Bar Register of Preeminent Lawyers, is a member of the Texas Academy of Family Law Specialists and is widely considered one of the most well respected family law attorneys in Central Texas. Mr. Piper's partner, Travis L. Turner, also a board certified family law attorney, has been named a Rising Star by Super Lawyers and is also a member of the Texas Academy of Family Law Specialists. Mr. Turner, with his extensive litigation and courtroom experience, has rapidly become known as one of the most prominent family law attorneys in the Austin area. The high regard Mr. Turner is held in by his peers is demonstrated by the fact that he is the current vice president of the Family Law section of the Austin Bar Association.

Contact our office to schedule an opportunity to meet with one of our experienced attorneys about your divorce and about defending or rebutting separate property claims. Based on our experience, we can clearly explain how Central Texas family courts are likely to view your situation and we will guide you through the entire process. Our lawyers pride themselves on offering our clients honest and realistic assessments about their cases while zealously advocating for the needs of each individual client. Let us help you get achieve of mind about your divorce.

Contact us at Piper & Turner, PLLC to learn more about how we can help you weather the storm.