St. Mary's Law Journal
The status of specific items of property as separate or community property is a frequent subject of divorce litigation in Texas. Spouses will have unfriendly presumptions in favor of the community estate when separate property funds have been commingled. Rebutting these presumptions requires the spouse to trace the original separate property into the particular assets on hand at the time of the dispute. As Texas case law illustrates, however, tracing can be difficult, and a court’s strict adherence to it can cause harsh and often inequitable results. Although there have been instances of courts allowing less than specific tracing, these cases are few. The equitable principle of reimbursement may provide a desirable alternative to tracing. It has utility in situations where even successful tracing would not lead to ownership, such as in the case of separate monies used to improve the other spouse’s home or to provide funding for a spouse’s business. Furthermore, it can be used in some cases where a claimant has allowed commingling but is unable to meet the requirements of tracing, at least in those cases where the advancement of separate funds has resulted in an increase in the joint account’s overall value. Reimbursement has the further advantage of requiring less than mathematical precision, so an approximation is allowed on equitable principles with far less specificity than necessary for ownership tracing. Hence, when tracing is impossible or its outlook dismal, advocates should plead in the alternative for reimbursement. This notion is particularly true considering the multifarious opinions of Texas appellate courts as to the specific requirements of tracing, and the comparative silence of the Texas Supreme Court in the face of this dilemma.
St. Mary's University School of Law
Charles J. Fitzpatrick,
The Commingling of Separate and Community Funds: The Requirement of Tracing in Texas.,
St. Mary's L.J.
Available at: https://commons.stmarytx.edu/thestmaryslawjournal/vol6/iss1/11