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Tracing – Minimum Sum Balance

Minimum Sum Balance

Community funds and separate funds are in the same account. There is ebb and flow with withdrawals and deposits in the account. The account, however, never drops below a certain level – the amount being separate property. By using this method a party must prove that funds on account by proving that the balance never fell below the  amount proven to be separate property.  The presumption is that only separate funds remained after all the withdrawals. Snider v. Snider, 613 S.W.2d 8 (Tex.App. – Dallas 1981, no writ).

Example: BOA Account 1234 was funded with a $10,000.00 gift by H mother.  H deposits his paycheck into this account – this is community. He writes various checks on the account. Deposits more paychecks into the account. At no time, does the account ever drop below $10,000.  Then that $10,000 is H’s separate property under the minimum sum balance rule.  Note, change the facts and say at no time did the account every drop below $7,000. Then $7,000 is separate property.

Word to the Wise — receive a gift, deposit it into a separate account and keep the community funds out of it. Keep meticulous records.