Does Texas Recognize Community Property?

Texas is one of the few community property states in the United States, which deeply impacts title transfers and property ownership disclosures during sales.

Why the Correct Option is Right

Option B is correct because Texas family law establishes a strong presumption of community property. Any property acquired during a marriage is considered owned jointly by both spouses, regardless of whose name appears on the deed or contract.

Why the Other Options are Traps

• Option A is a trap because Texas is historically and statutorily a community property state.
• Option C is a trap because even if only one spouse’s name is on the deed, if it was purchased during the marriage, it is still legally presumed to be community property.
• Option D is a trap because the source of funds does not automatically overcome the community property presumption.

The Exam Trap

Many students fail to realize that both spouses must sign the deed to transfer title to community property, even if only one spouse is listed on the title. Sponsoring brokers emphasize “one to buy, two to sell” to their agents.

Worked Texas Example

Scenario: Mark buys a residential rental property in Austin using his own business account three years after marrying Judy. The deed is placed solely in Mark’s name. Five years later, Mark wants to sell the property without Judy’s signature. Outcome: The title company will refuse to close the deal without Judy’s signature. Because the property was purchased during the marriage, it is presumed to be community property, and both spouses must sign the deed.