Property Ownership

In Texas, when community property is sold and the proceeds are used to purchase a new property during marriage, the new property is:

AAutomatically separate property of the spouse who signed the deed
BCommunity property unless the couple executes a valid partition agreement making it separate property✓ Correct
CSeparate property if only one spouse is named on the deed
DOwned 60/40 by the working spouse and non-working spouse

Explanation

Under Texas community property law, property purchased during marriage with community funds is community property, regardless of whose name is on the deed. To make it separate property, spouses must execute a partition or exchange agreement as provided in the Texas Family Code. The source of funds (community vs. separate) typically determines the character of the property.

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