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Tracing – Community Out First Presumption

Community Out First Presumption

Withdrawals from an account which is mixed with community property and separate property are presumed to be withdrawals from the community portion of the total fund. Sibley v. Sibley, 286 S.W.2d 657 (Tex. 1955), Farm purchased during marriage was in dispute. Barrington v. Barrington, 290 S.W. 2d 297 (Tex.App. – Texarkana 1956, no writ).  Tire Shop Case.  Community drew out more money from the business than it made.

Defensively, if you deposit your separate monies into a joint account, then buy real property or other assets from the joint account, it is presumed that the monies used to buy those assets came from community as it comes out first. But you could use clearing house method, identical sum to possibly establish the separate character of the money. Community out first is a presumption. Welder v. Welderb, 794 S.W.2d 420 (Tex. App. – Corpus Christi 1990, no writ).