Dissecting Basic Complexities of the Date of Marriage During Divorces

Each divorce has its own set of special circumstances and/or complexities that need to be addressed in order to properly perform a trace.

In a previous article, we addressed four basic considerations to identify the characterization of assets during a divorce. The first consideration identified was the date of marriage.

The Date of Marriage

The date of marriage is essential in the characterization process because it denotes the day on which earnings, assets, and liabilities incurred from that date forward are characterized as community property activity.

Normally, a trace will begin as of the date of marriage, and activity occurring after that date typically is considered community property activity.

While the date of marriage might seem to be straightforward and easily identified, there might be special circumstances and/or complexities that must be addressed before beginning the trace.

Complexity: Are the parties actually married?

It has become more common for couples to live together and conduct their lives in a manner similar to married people without the formalities of having a wedding ceremony or marriage certificate.

These couples may live in a manner similar to married people by:

  • Cohabitating in the same dwelling, such as a home they purchased together
  • Sharing bank accounts and/or brokerage accounts
  • Referring to each other as a spouse

Texas recognizes common law marriage, which means a couple who resides in the state of Texas will be considered legally married, absent the formalities of having a wedding ceremony or marriage certificate, if certain criteria are met which have been identified in the Texas Family Code §2.401.

Tracing Complexity Resolution

There are two possible tracing resolutions to this complex issue:

  1. Trace the bank/brokerage accounts as two separate estates without any community property.
  2. Trace the bank/brokerage accounts as community property beginning with the date that the account became comingled.

Complexity: Were the parties married after significantly commingling assets?

In this scenario, we assume the same considerations as the preceding complexity, except that the parties were married after significantly commingling their assets.

Because the parties married after significantly commingling their assets, the possible tracing resolutions would be similar to the resolutions previously identified.

Tracing Complexity Resolution

There are two possible tracing resolutions to this complex issue:

  1. Trace the bank/brokerage accounts as two separate estates until the date of marriage, and at the date of marriage, the activity would be considered community property activity.
  2. Trace the bank/brokerage accounts as community property beginning with the date that the account became comingled.

Complexity: Were the parties married outside of the state of Texas?

Assume that the parties were married in a different state or even a different country. Would this affect the trace beginning date that normally would begin on the date of marriage?

If the parties are domiciled in Texas during the divorce process, then Texas law prevails, even if the parties were married in another state (even one that is not considered a community property state) or another country.

Tracing Complexity Resolution

Possible tracing resolution to this complex issue:

  1. This means that the tracing assumptions and methodologies used would be applied as if the parties were married and resided in Texas during the pendency of the marriage.

The Most Important Thing to Remember

Generally speaking, the date of marriage usually is the date that we begin the trace of bank/brokerage accounts.

However, there are scenarios where the date of marriage, if there is one, is not always the beginning date of the trace.

Contact us to see how we can assist you with your separate property characterization needs, including the review of another expert's separate property characterization claim.

Please note this article provides information that is accurate to the best of the authors' knowledge as of the date of publication. It should not be read as advice or opinion.

This article should not be viewed as a substitute for recommendations of a retained professional. Such consultation is recommended in applying this material in any particular factual situations.

Briggs & Veselka reserves the right to conduct asset tracing work on a case-by-case basis.

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