Is Property My Spouse and I Owned in Another State Community Property or Separate Property?
John and Jane Doe didn’t always live in Texas. Earlier in their marriage, they lived in another state, where John purchased a house the couple lived in and raised their children. Although they have since moved to Texas, they still own the house and spend summers there.
How is the out-of-state property characterized as community property or separate property for purposes of division at death?
In Texas, the character of property at death is governed by the laws of the state in which the couple resided at the time they acquired the property.
For example, suppose the state John and Jane lived in was a common law state. After he and Jane were married, John purchased the home in his name alone, and paid the mortgage using his salary.
If the property had been purchased when they lived in Texas, the property would be classified as community property. That’s because under Texas law, income earned during a marriage is community property, and property acquired during a marriage is presumed to be community property, except if acquired by gift, devise or descent.
However, the rules in a common law state are different. In common law states, income earned by one spouse is generally classified as separate property. And property held in the name of one spouse alone is also classified as separate property. Therefore, the property would be classified as John’s separate property. And that characterization would remain if John and Jane moved the Texas for purposes of division at death.
Please note, the rules with regards to division of property in the case of divorce may be different. In Texas, property acquired in another state that would have been characterized as community property if the spouses had lived in Texas when they acquired it is characterized as “quasi-community property” for purposes of division in divorce proceedings.
Read more about Texas property definitions here.