In any Dallas Texas divorce proceeding, the issue of how to divide assets and debts must be resolved. Not every asset is obviously "separate" or obviously of the "community." Basically, community property will be divided between the spouses because it is marital property. Separate property will not be divided because it is not marital property. The challenge is in characterizing each item, one at a time.

This may be disappointing news for some but, in general, assets acquired during the marriage will likely be characterized as community property. Of course, there are always exceptions to that. These "exceptions" are usually limited to assets owned before the marriage, or acquired by gift or inheritance during the marriage.

What is transmutation of property?

Transmute means to convert. The transmutation of separate property, then, means converting what started as separate property into either community property or the separate property of the other spouse.

Under Texas divorce law, transmutation may occur by agreement, by gift, or by commingling.

When one spouse places their separate real property into a joint ownership, for example, we presume that a gift occurred. This seemingly simple act has significant consequences for spouses who do not understand this when they transfer title from their own name to both names. For example, when a party owns a home prior to the marriage, then refinances the home during the marriage and the home gets retitled into both spouses names, they have just "gifted" the value of the home to the marriage – it’s now an asset of the other spouse as well.

In a divorce, the division of property and debt settlement can be quite complex and very confusing. When you need to protect your financial future, contact the Dallas family law attorneys at the O’Neil Attorneys Family Law. Our attorneys possess the legal knowledge and financial tools to ensure that you are not taken advantage of in your divorce.

Hat tip to Scott David Stewart of the Phoenix Arizona divorce law blog for  this article.