Tom and Angela are married in Texas. Tom owned a condo before marriage worth $200,000. During marriage, they use $50,000 of community funds to pay down the mortgage on the condo. In a divorce, how would a Texas court likely treat the condo?
Correct Answer
B) The condo remains Tom's separate property, but the community estate has a right of reimbursement for the $50,000 in community funds used
Under Texas Family Code §3.402, when community funds are used to pay down the mortgage or improve one spouse's separate property, the community estate may have a right of reimbursement. The property retains its separate property character (determined at acquisition), but the community is entitled to reimbursement for its contributions toward reducing the principal of a debt secured by the separate property.
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