A Texas wife owns a separate property commercial building valued at $500,000. During the marriage, community funds are used to pay $100,000 in mortgage principal and $50,000 in improvements. The building appreciates to $800,000. In a divorce, how would a Texas court likely address the community estate's interest?
Correct Answer
C) The community receives reimbursement for contributions without interest or appreciation, typically equal to the community funds expended for principal reduction and improvements
Under Texas Family Code §3.402, the community estate is entitled to reimbursement for contributions toward the reduction of principal of a debt on separate property and for capital improvements. Texas courts generally award reimbursement in the amount of the community contribution without interest or share of appreciation. The property remains separate, and the community's remedy is dollar-for-dollar reimbursement.
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Previous Question
A Texas license holder is helping a married couple purchase their first home. The husband is contributing $60,000 from his pre-marital savings as the down payment. Under Texas community property law, what should the license holder recommend regarding the funding documentation?
Next Question
A Texas couple gets married. The wife owns a car free and clear that she purchased three years before the wedding. Under the Texas Family Code, what is the classification of this car?