Pursuant to the Inception of Title doctrine, a property’s character is determined when the party acquires their interest in it. This means that property acquired before the marriage will generally be characterized as that spouse’s separate property in a Texas divorce. In a recent case, however, the court determined that a house purchased solely in the name of the husband before the marriage was the separate property of both spouses.
According to the appeals court’s opinion, the parties started dating in late 1999. The wife moved in with the husband and his grandfather in 2003 or 2004. The husband bought a house from the wife’s parents in 2004 as “a single man,” according to the Deed of Trust and Note and both parties moved into it. They deposited their paychecks into a joint account from which the mortgage and property taxes were paid. They got married in July 2005 and lived together in the house until 2020.
The wife petitioned for divorce and ultimately requested reimbursement to the community estate. She asked for 50% of the community estate and 50% of the husband’s separate property. She argued the house was both parties’ separate property because they had lived together and both paid for it. The husband argued it should be his separate property.
The wife testified that both parties were looking for a place when they lived with the husband’s grandfather. She said the husband told her father he would buy the house if he wanted to sell it. She also testified the parties were living together at the husband’s grandfather’s house when the husband bought the house and moved “together as a couple” into the new house. She testified they agreed not to include her name on the purchase documents. She explained that the husband did not make a down payment because he qualified for a program for first-time home buyers. She testified they combined finances and that the mortgage, taxes, utilities, and other house expenses, as well as general living expenses were paid from the joint account.
The wife testified they moved into the house before it closed, but the husband said they did not move in until the purchase had been completed. They both agreed they moved in together before the marriage.
The husband testified he did not live at the house until he and the wife moved into it together. He said the wife’s parents were having financial difficulties and he bought the house because they were facing foreclosure. He testified he bought it in only his name because the parties were not married. He also testified, however, that he bought it “so we’d have a place to live.”
The trial court held the house was the equal, undivided separate property of both parties.
Husband Appeals Property Characterization
The husband appealed, arguing there was insufficient evidence to support the finding. He argued there was no evidence the parties intended a “partnership or joint venture in the purchase.” He argued his purchase of the house in only his name months before the marriage was dispositive. He also argued the wife had not shown any evidence that either party intended the purchase to be a joint venture or partnership. He argued there was no evidence they agreed to co-ownership of the house.
The wife argued that the fact the house was purchased before the marriage did not necessarily mean she did not have an equal and undivided separate interest. She argued all of the payments came from the joint account.
The appeals court noted that the Inception of Title doctrine suggested the house was the husband’s separate property. Only he signed the purchase documents. The documents stated he bought the house as “a single man” before the marriage. The appeals court further noted, however, that the parties’ intent is an important consideration in determining a property’s character. The wife had testified they lived together before the purchase of the house and were both looking for a place to buy. They moved into the house together soon after the husband bought it. He never lived there by himself. The wife testified that neither of them had separate bank accounts while they lived in the house, and that the house and living expenses were paid from the joint account. The husband did not make a down payment. There was no evidence he paid closing costs or any other expenses for the house from his separate funds.
The husband argued he made more money and paid the mortgage and the wife paid utilities and other expenses. The appeals court pointed out that the funds came from the joint account.
The appeals court also noted there was no indication the husband intended the house to be only his when he bought it. The appeals court concluded that the circumstances suggested the parties “intended the House to be theirs together.”
The husband argued that cohabitation and payment from the joint account were insufficient to divest him of separate property. The appeals court noted there was other evidence before the trial court. There was evidence the parties lived together before the purchase, they were both looking for a house, and the house was bought so they would have somewhere to live. The husband did not show that he used separate money in costs related to the purchase. Instead, the evidence showed that both parties paid for the house.
Appeals Court Upholds Finding of Separate Property of Both Parties
The appeals court concluded there was sufficient evidence to support the trial court’s characterization of the property. The appeals court found no abuse of discretion by the trial court and affirmed the judgment.
Obtain Skilled Texas Legal Representation
The facts of this case are somewhat unusual, with the property purchased in one spouse’s name before the marriage but all payments coming from a joint account. If you are concerned your spouse may claim separate property, an experienced Texas divorce attorney can help. Set up a consultation with McClure Law Group at 214.692.8200.