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What Happens to My Boat in a Texas Divorce?

What Happens to My Boat i…

Division of property in a Texas divorce case requires both spouses to account for everything they own. They must then determine whether anything can be characterized as “separate property.” Under Texas law, anything that is not separate property is considered “community property,” and must be divided between the parties to the divorce. If the parties cannot agree on how to divide their community property, also known as the community estate, a court will decide for them after conducting a trial. The decision could be left to a judge or a jury.

Community property may include a wide variety of assets. In the Clear Lake area, boats are likely to be a common asset in dispute in divorce cases. According to sources promoting tourism in the area, Clear Lake has the third-largest concentration of recreational boats in the country. The lake itself offers access to Trinity Bay, Galveston Bay, and other waterways, so it makes sense that the area would attract boating enthusiasts. It also raises questions about what happens to a boat in the event of a divorce.

Separate and Community Property

The biggest question when determining what to do with any property in a divorce is whether it is community or separate property. The Texas Family Code identifies three types of “separate property”:

  1. Property owned by one spouse before the marriage;
  2. Property obtained as a gift or by inheritance during the marriage; and
  3. Personal injury awards or settlements received during the marriage for anything except lost wages.

The statute defines community property in quite simple terms: Anything that is not separate property is community property. A house purchased by both spouses after the marriage, for example, is likely to be community property. A joint bank account where both spouses deposit their paychecks is definitely community property. Texas law directs courts to divide community property “in a manner that [it] deems just and right.”

In order for separate property to retain its “separate” character, the spouse who claims it as their separate property must keep it separate from community property. Money obtained by inheritance, for example, should not be deposited into a joint bank account, or it could become part of the community property.

Even if separate property does not entirely become community property, the other spouse could still make a claim for reimbursement in some situations. Suppose a wife owned a house before the marriage, which was subject to a lien. During the marriage, she used community money to pay down the loan secured by that house. The husband could claim reimbursement of that amount to the community estate. Reimbursement is also available for capital improvements to separate property, such as if the wife used community money to remodel the house.

A claim for reimbursement does not give that spouse an ownership interest in the other spouse’s separate property. Instead, it is similar to a lien on that property.

State law assumes that everything owned by the spouses during a divorce is community property. If the parties disagree on how to characterize property, the spouse claiming that it is separate property has the burden of proving this in court. They must do this by proving when or how they obtained the property, and demonstrating that they kept it separate. A spouse claiming reimbursement has the burden of proving their claim once the other spouse has established that the property is separate.

How Does Texas Law Define a “Boat”?

A boat is an item of personal property. In terms of ownership, it is similar to a car or truck. State law defines the term “boat” as a watercraft, other than a seaplane, that can transport people over water and is no more than sixty-five feet in length.

Dividing a Boat in a Divorce

Like any other asset that one or both spouses own, a boat must be included in an inventory of assets during a divorce. If a spouse claims it as their separate property, they must produce evidence to show that it meets Texas’ definition of that term. This could mean that they purchased the boat before the marriage, or that they acquired it as a gift or through inheritance. They may also have to show that they kept it separate, and did not commingle it with community assets.

The other spouse could make a claim for reimbursement if, for example, community assets were used to pay off debt owed on the boat. If the spouse claiming the boat as separate property used community money to make improvements to the boat, that could also support a reimbursement claim. “Improvements” in this context could mean major repairs. Minor maintenance, fuel costs, and other routine expenses could also support a reimbursement claim, but it is less certain.

If a boat is determined to be community property, either by agreement of the spouses or by the court, it will be subject to division like any other item of community property. One spouse may take title to the boat, with the other spouse receiving other community property to balance out the distribution, or they can sell the boat and split the proceeds.

Transferring Title to a Boat After a Divorce

Boat titles are administered by the Texas Parks and Wildlife Department. The application for title and registration asks how the applicant acquired the boat. Two options provided on the form involve divorce: acquisition by one spouse from the other, or a new purchaser acquiring the boat as a result of the previous owners’ divorce. For either type of transfer, the department requires a copy of the divorce decree.

Stacey Valdez is a board-certified family attorney in Clear Lake and the greater Houston, Texas area. Our clients and their families are, and always will be, our top priority at Stacey Valdez & Associates. We are dedicated to helping our clients through divorce, child custody, and other difficult ordeals with compassion and tireless advocacy. Please contact us online, or give us a call at (281) 218-0900 today to schedule a confidential consultation to discuss your rights and options. Your first meeting with us is free in most cases.

Categories: Property Division