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What About Gifts Between Spouses?

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The primary law governing donations or gift-giving between spouses is Section 3.005 of the Texas Family Code. It states that the property given by the spouse to the other is presumed to be given as a gift. It includes all the income and property that may result from this property.

The Texas marital property law follows the community property system.

Community vs Separate Property

Community property is the property owned by both husband and wife. This, of course, excludes those considered as their own separate property. Separate property is owned by either spouse prior to the marriage.

However, property acquired during the marriage may still be considered separate property. That is if the acquisition was by will, gift, inheritance, or purchased with their own separate funds.

Separate property may also be agreed upon by the spouses through a written agreement exchanging or partitioning community property.

Clear and convincing evidence is needed in order to prove that a property is actually a separate one.

In cases where the classification of the assets is required, the inception of title rule applies. The determination of the character of a property can be determined at the time of the asset was acquired.

The manner of how title is held is irrelevant in Texas when it comes to the determination of ownership. The inception of title rule considers the acquisition’s time and circumstance– not the name on the title of the property.

Below are some examples:

Situation 1

Ana owns a house prior to the marriage, so it is Ana’s separate property. Ana names the house to her husband, Bert, under the deed. Here, the deed is presumed as a gift to Bert and the house is believed to be Bert’s separate property.

Situation 2

Ana owns a house prior to the marriage, so it is Ana’s separate property. Ana names  the house in the deed as “Ana and Bert as community property.” In this situation, the deed is considered the gift but the house is still a separate property, not community property. Each spouse now holds a one-half separate interest over the house.

Situation 3

Ana and Bert purchased a house during their marriage. This is considered community property. Ana gives Bert a deed that names only him as the owner of the house. In this situation, the deed is considered as a gift. As a result, this house is now wholly owned by Bert as part of his separate property.

Situation 4

Ana purchased a house during the marriage using her own separate funds. However, she puts the title in the name of Ana and Bert. The deed here is presumed as a gift again. Ana and Bert each have an undivided one-half interest over the house which forms part of each of their separate property.

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Hutton Law

Mr. Hutton is a Divorce and Custody Lawyer based out of Round Rock, TX. His background is with child psychology at Arizona State University where he received a B.S. in 2006, and he continued this by working with the Children’s Right’s Clinic at the University of Texas School of Law where he received his J.D. in 2009. Throughout his practice, he has been a strong proponent of utilizing modern technology to improve his practice and the representation of his clients. He currently is the technology chair of CAFA of Travis County and is committed to improving and modernizing the practice of law in Texas. If you have any questions you can contact him at timothy.hutton@austintexaslegal.com

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