Articles Posted in Gifts

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A fundamental principle of Texas family law is the distinction between community and separate property. While Texas is a community property state, property acquired by a spouse during marriage by gift, devise, or descent is characterized as that spouse’s separate property. Tex. Fam. Code § 3.001(2).

This characterization remains vital even when parties have executed a premarital agreement (PMA) designed to opt out of the community property system entirely. A recent decision from the Dallas Court of Appeals, In the Interest of A.B., illustrates that even a robust “no community property” agreement does not preclude one spouse from transferring their separate property to the other through a valid interspousal gift. No. 05-25-00039-CV, 2026 WL, Tex. App.—Dallas.

Factual Background

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The court in a Texas divorce case must divide the estate in a “just and right” manner.  Property acquired by either spouse during the marriage, except separate property, is community property.  Tex. Fam. Code § 3.002.  Separate property includes property acquired by a spouse by gift.  Tex. Fam. Code § 3.001.  There is a rebuttable gift presumption for property conveyed by a parent to a child. The presumption can be rebutted by clear and convincing evidence that the parent lacked donative intent. A former husband recently challenged characterization of certain property the wife claimed had been gifted to her, as well as a provision stating the wife was entitled to file taxes as head of household, and a number of other issues.

The wife bought a new home in July 1999. She and her father were listed as the grantees on the deed, but the husband put $25,000 down.  The parties got married that September and lived in the home.  The wife’s father’s interest in the home was transferred to the husband in October 2000.

The husband worked as an engineer when they married but was laid off in 2007.  At the time of the trial, he had not had full-time employment since that lay-off.  He had received a severance and used it for bills and living expenses until it was depleted.  The husband cared for the parties’ young child while the wife worked full time.

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Property characterization can be a significant area of contention in Texas divorces, particularly in high net worth divorces or those in which one party entered the marriage with significantly more assets.  Texas law presumes that property possessed by either spouse during or on dissolution is community property.  That presumption may be rebutted by clear and convincing evidence the property is separate. Tex. Fam. Code § 3.003. Property conveyed by one spouse to the other is generally presumed to be a gift.  Clear and convincing evidence the conveying spouse did not intend to gift the property is needed to rebut the gift presumption.  A former husband recently challenged characterization of the marital residence as the wife’s separate property despite execution of a general warranty deed granting him an undivided one-half interest.

The parties got married in 2001 and the wife petitioned for divorce in 2021. The trial court found the marital home was the wife’s separate property.  According to the appeals court’s opinion, she bought it two years before the marriage and refinanced it in 2003.  She also signed a general warranty deed that granted the husband an undivided half interest. The court found the wife did not intend to gift the property to the husband and provided an alternate reason for executing the warranty deed.  The court also found refinancing had not changed the property’s character.  The trial court awarded the wife conditional appellate attorney’s fees if the husband appealed to the Court of Appeals or the Supreme Court of Texas and the wife “substantially prevail[ed].]”

The husband appealed the home’s characterization and the conditional appellate attorney’s fees award.

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The Supreme Court of Texas recently considered the property division in a Texas divorce case involving a complex estate, including an outstanding employee bonus, claims of separate property, and a retirement plan.

The parties got married in 2020 and were divorced in late 2019, with litigation regarding the property division continuing beyond the divorce.

Bonus

During the marriage, the husband worked for a large bank.  He received an annual cash and stock bonus contingent on the bank’s and his own performance.  The bonus was paid around February 15 each year.

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In a Texas divorce, there is a presumption that property possessed by either party during or on dissolution is community property.  Tex. Fam. Code Ann. § 3.003(a).  Property’s characterization is determined by inception of its title.  In a recent case, a husband challenged a trial court’s characterization of property conveyed by his parents.

Conveyance of the Property

According to the appeals court’s opinion, the husband acquired the property from his parents during the marriage.  The deed was labeled a warranty deed.  It identified the parents as the grantors and the husband, “A MARRIED PERSON,” as the grantee.  It stated consideration of $10 and “other good and valuable consideration.”  It also stated the grantor “grants, sells, and conveys to Grantee the property.”  A corrected deed was filed in 2015 changing the legal description.

The wife testified the husband’s parents were paid $1,750 for the property from a joint bank account.  The husband and his father each testified that just $10 was paid as consideration for the property.  Both spouses were listed on the construction loan application for building the home on the property.  That application indicated the title would be held “Jointly with Spouse.”

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iStock-483613578-300x204The characterization of property in a Texas divorce is generally determined by the property’s character when the spouse acquired it.  Separate property is property a spouse owned before the marriage or acquired during the marriage through gift, devise, or decent.  Improvements made to separate property are generally also separate property because they are not divisible from the land. Community property is property acquired by either spouse during the marriage that is not separate property.  In a recent case, a wife challenged a court’s characterization of the marital home as community property.

Home Built During Marriage

According to the opinion of the appeals court, the parties got married in 1995.  In 2000, the husband’s mother transferred two lots to both of the parties by a gift deed.  They built the marital home on those two lots during the marriage.  The wife moved out of the home when the parties separated in 2015.  The husband had stayed there and paid the household bills and property taxes.

The trial court ordered the home to be sold.  It awarded 75% of the net proceeds from the sale of the home to the husband and the other 25% of the net proceeds to the wife.

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does-adultery-affect-alimony-in-idaho-1080x600-1-300x167Property possessed by a spouse during or upon dissolution of the marriage is presumed to be community property.  Clear and convincing evidence that the property is separate is required to rebut that presumption.

Wife Asserts Gift from Parties’ Son

A husband recently appealed a divorce decree, arguing the trial court erred in finding all accounts in the wife’s name in Bangladesh banks were the wife’s separate property.  The wife claimed the money in those accounts had been gifted to her by their son.  Property acquired by gift or inheritance is generally separate property.  TEX. FAM. CODE ANN. § 3.001.

According to the appeals court’s opinion, the parties’ son testified he had sent his mother $500 a month through an automatic deposit into her bank account since 2006.  He said the money was a gift only to his mother.  The wife testified she had transferred some of those funds into her accounts in Bangladesh.

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What happens to the engagement ring if someone calls off the wedding?

Unfortunately, before some engaged couples can make it down the aisle to say “I do”, someone says “I don’t”. The issue of who gets to keep the engagement ring often surfaces during this heartbreaking time.

An engagement ring is a gift and the law requires three elements to constitute an irrevocable gift:

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