In Texas, the presumption is that every piece of property in existence at the time of the divorce is community property. Separate property is the property you owned prior to your date of marriage, or that you received by gift or inheritance during the marriage. Because of the marital property presumption, the party claiming that a particular asset is his or her separate property has the burden of proof to prove that it is their separate property. A dispute over whether an asset is community or separate property is generally called a "Characterization of Property" issue. Why is the characterization of property so critical in a divorce? Because a court only has the authority to divide the community property between the parties. The court has no authority to divide separate property.
In the case of a savings account, documentation like a bank statement showing the balance of the account the day before the marriage would establish what portion of the account was separate property at the time of marriage. Any interest income that you earn off the balance after marriage will be community property because any income received during the marriage is community property-even if it is interest from a separate property account. In the event of a divorce, it would be relatively easy to calculate what part of the account is separate property and what part of the account is community property by adding the amount of earned interest at the time of divorce (assuming no other money was added to the account from other sources).
The matter gets much more complicated if you start depositing money from your paycheck or other sources into your savings account after the date of marriage. If you keep good records and can show that the source of funds was from a gift or an inheritance, then most likely the account balance (except for the earned interest) will be considered your separate property. However, if you put a portion of your paycheck into your savings account you have just "co-mingled" community property with your separate property and created a potential tracing nightmare. If you can properly identify your funds and trace transactions through the savings account, then you should be able to meet your burden of proof and demonstrate to the court what portion of your savings account is your separate property. However, be aware that proving the money in your savings account is yours can be very difficult where the account is subject to withdrawals, or where money is withdrawn to pay expenses. Often times experts must be retained to do "forensic accounting" at considerable cost. A dispute over a co-mingled asset is generally called a "Tracing" issue.
Note that the above analysis also applies to checking accounts. The bottom line is that depending on your circumstances, it may be best to open new accounts after marriage so that nothing but community money goes into them. If you want to build your own nest egg during the marriage, do so with an account where you only deposit community money. Above all, keep your pre-marriage accounts your separate property by not co-mingling them with community money.
If you have a question about the property division laws in Texas and how they apply to you, please contact our office to speak with an experienced Houston divorce attorney.