Is Inheritance Community Property in Texas?

If you are considering divorce and received an inheritance during your marriage, you are likely asking yourself the important question: is inheritance community property in Texas?

In other words, will your inheritance be classified as community property and subject to division as part of your divorce, or will your inheritance be classified as separate property such that it is not subject to division?

It is important to keep in mind that Texas is a “community property” state as opposed to an “equitable distribution” state. To put it another way, under Texas law, all community property is divided equally between the two spouses. In situations where an inheritance is classified as community property, the spouses would split it equally, or 50-50, between them.

In many situations, an inheritance is not community property. However, there are scenarios in which the court might classify an inheritance as community property. You should understand how this type of property is classified and the ways in which a seemingly inconsequential decision can convert an inheritance from separate property to community property.

What Counts as Separate Property in Texas?

Almost all property that was acquired during your marriage will be classified as community property, and it will be divided equally between you and your spouse. However, there are some types of property acquired during the marriage that typically are classified as separate property. The following is a list of property that usually is classified as “separate” and thus not subject to division in a divorce:

  • Property acquired by either spouse prior to the marriage;
  • Property acquired during the marriage by only one of the spouses as a gift;
  • Property acquired during the marriage by only one of the spouses through an inheritance; and

To be clear, while inheritances usually will be classified as separate property as a default, there are ways in which inheritances actually can become community property.

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Commingling Separate Property and Community Property

When separate property—like an inheritance—is commingled with community property, or in situations where the spouse who owns the separate property takes some sort of action that makes the inheritance look like community property, the court could end up determining that the inheritance is in fact community property. Some examples include:

  • Adding community assets into an account that holds the inheritance;
  • Putting your spouse’s name on the inheritance in some capacity, such as on a bank account or other account;
  • Using community property to pay inheritance tax on the inheritance; and/or
  • Using community property to increase the value of the inheritance (such as having a painting that was inherited restored using community property).

If the inheritance was left to both spouses, then it is community property, even if the inheritance was left by only one of the spouse’s relatives (such as a spouse’s parent).

Even if an inheritance is likely to be classified as community property, you and your spouse can enter into a partition or exchange agreement to convert the inheritance to separate property.

Contact a Texas Divorce Attorney

If you have questions about the classification of certain property, or concerns about community property in general, a dedicated Austin divorce lawyer at our firm can speak with you today. Contact the Law Office of Ben Carrasco PLLC to discuss your divorce with an experienced family law attorney.