I was asked recently about whether becoming a partner in a professional company creates community or separate property.  The Husband worked for a firm prior to marriage and shortly before the marriage was offered a partnership interest in the firm.  He and the firm signed the partnership agreement a few months prior to the marriage.  After the marriage, he began receiving the benefits of the partnership agreement.  Now, he and his wife are headed for divorce and he wonders if she is going to be entitled to part of his partnership interest.

Starting at the beginning of the analysis, community property is anything that the spouses gathered together during the marriage.  It is presumed that everything the spouses own at the time of divorce is community property.  Community property is divisible upon divorce. 

On the other hand, separate property are those assets that were acquired before the marriage or through gift or inheritance.  Separate property assets are not divisible upon divorce. 


The inception of title doctrine governs the timing of whether an asset is separate or community property.  In other words, when was the first moment that the spouse was entitled to claim ownership of the asset? Was that moment during the marriage (community) or before (separate)? It is the origin of the right to title, not the actual acquisition of final title that determines the character as either community or separate.


Here, the documents securing the interest in the partnership were signed prior to the marriage.  Thus, the right to the ownership interest accrued before the marriage, making the partnership interest separate property and not subject to division upon divorce.

 

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Photo of Michelle O'Neil Michelle O'Neil

Michelle May O’Neil has 27 years’ experience representing small business owners, professionals, and individuals in litigation related to family law matters such as divorce, child custody, and complex property division. Described by one lawyer as “a lethal combination of sweet-and-salty”, Ms. O’Neil exudes…

Michelle May O’Neil has 27 years’ experience representing small business owners, professionals, and individuals in litigation related to family law matters such as divorce, child custody, and complex property division. Described by one lawyer as “a lethal combination of sweet-and-salty”, Ms. O’Neil exudes genuine compassion for her client’s difficulties, yet she can be relentless when in pursuit of a client’s goals. One judge said of Ms. O’Neil, “She cannot be out-gunned, out-briefed, or out-lawyered!”

Family Law Specialist

Ms. O’Neil became a board-certified family law specialist by the Texas Board of Legal Specialization in 1997 and has maintained her certification since that time. While representing clients in litigation before the trial court is an important part of her practice, Ms. O’Neil also handles appellate matters in the trial court, courts of appeals and Texas Supreme Court. Lawyers frequently consult with Ms. O’Neil on their litigation cases about specialized legal issues requiring particularized attention both at the trial court and appellate levels. This gives her a unique perspective and depth of perception that benefits both her litigation and appellate clients.

Top Lawyers in Texas and America

Ms. O’Neil has been named to the list of Texas SuperLawyers for many years, 2011-2018, a peer-voted honor given to only about 5% of the lawyers in the state of Texas. In 2014-2018, Ms. O’Neil received the special honor of being named by Texas SuperLawyers as one of the Top 50 Women Lawyers in Texas, Top 100 Lawyers in Texas, and Top 100 Lawyers in DFW. She was named one of the Best Lawyers in America for 2016 and received an “A-V” peer review rating by Martindale-Hubbell Legal Directories for the highest quality legal ability and ethical standards.

Author and Speaker

A noted author, Ms. O’Neil released her second book Basics of Texas Divorce Law in November 2010, with a second edition released in 2013, and a third edition expected in 2015.  Her first book, All About Texas Law and Kids, was published in September 2009 by Texas Lawyer Press. In 2012, Ms. O’Neil co-authored the booklets What You Need To Know About Common Law Marriage In Texas and Social Study Evaluations.  The State Bar of Texas and other providers of continuing education for attorneys frequently enlist Ms. O’Neil to provide instruction to attorneys on topics of her expertise in the family law arena.