Hidden Assets and Fraud on the Community
Finding what was moved, and what a court can do about it.
Characterization comes before division
A Texas court divides community property. It has no authority to divest a spouse of separate property. So the threshold question on every asset is what it is — community (Tex. Fam. Code § 3.002) or separate (Tex. Fam. Code § 3.001).
The presumption favors community, and it is rebuttable only by clear and convincing evidence. That standard is why characterization is a documents case. The house you bought before the marriage is separate; the community's payments against its mortgage during the marriage may create a reimbursement claim. The brokerage account you brought in is separate until deposits and withdrawals mix it so thoroughly that tracing fails, at which point the whole account is treated as community.
How This Plays Out in Practice
Finding what was moved, and what a court can do about it. The specifics turn on facts — the length of the marriage, what is in the estate, whether children are involved, and how much the two of you still agree on. What does not change is the framework: Texas courts apply the Family Code, and the outcome follows from how your facts meet it.
Lisa G. Garza handles these matters from the firm's Dallas and McKinney offices, for families throughout North Texas.
Questions
What happens to the house?
It depends on how the house is characterized and on what else is in the estate. Common outcomes are sale with the proceeds divided, one spouse buying out the other's interest, or one spouse keeping it. Where separate-property funds paid for a community home or community funds paid down a separate-property mortgage, a reimbursement claim may be owed between the estates.
What if my spouse is hiding assets?
Formal discovery is the answer — sworn inventories and appraisements, requests for production, subpoenas directly to banks and employers, and depositions under oath. Where community property has been concealed, given away or wasted, Texas recognizes a claim for fraud on the community, and a court may reconstitute the estate and award a disproportionate share to the wronged spouse.
Is Texas a 50/50 state?
No. Texas is a community property state, which is not the same thing as an equal-division state. Texas Family Code § 7.001 directs the court to divide the community estate in a manner that is just and right, having due regard for the rights of each party and any children. Disproportionate divisions are common and legal.
What is separate property in Texas?
Under Texas Family Code § 3.001, separate property is property owned or claimed by a spouse before marriage, property acquired during marriage by gift, devise or descent, and recovery for personal injuries sustained during marriage except for lost earning capacity. A court cannot divest a spouse of separate property in a divorce.