## Facts

- Royal McKinley and Flora McKinley married on January 15, 1965; Royal died on October 15, 1970.
- Before marriage, Royal held two savings accounts with balances of $9,570.27 (Dallas Federal Savings & Loan) and $9,535.63 (First Federal Savings & Loan).
- During marriage, numerous deposits and withdrawals occurred in both accounts.
- On January 2, 1968, funds withdrawn from the accounts were used to purchase two savings certificates, one for $10,400 and another for $16,000.
- After Royal’s death, Keith McKinley (as independent executor) filed an inventory listing both certificates as Royal’s separate personal property; the probate court approved the inventory.
- Flora sued Keith in district court for injunctive relief and a declaration that both certificates were community property.
- The trial court concluded the certificates were community property and awarded Flora $13,200 (one-half of the certificates’ value), subject to an offset for amounts Flora had withdrawn.
- The court of civil appeals affirmed (with the offset).

## Issues

1. Whether commingling of separate and community funds in accounts used to buy savings certificates required treating the certificates entirely as community property.
2. Whether the executor produced sufficient tracing evidence to rebut the community-property presumption as to part of the certificates.

## Decision

- The Texas Supreme Court reversed the court of civil appeals.
- The Court held that commingling did not, by itself, convert all funds used to acquire the certificates into community property.
- The Court concluded that tracing evidence established that a portion of the certificates remained Royal’s separate property.
- The case was remanded with directions to apportion the certificates between Royal’s separate estate and the community estate.

## Legal Principles

- Property acquired during marriage is presumed community; the party claiming separate property must trace and clearly identify the separate interest.
- Commingling does not destroy the separate character of funds unless the mixture is so complete that the separate portion cannot be distinguished by evidence.
- When an asset is acquired with both separate and community funds, courts may allocate ownership interests between the separate and community estates rather than characterizing the entire asset as one or the other.

## Conclusion

The court held that the lower courts erred by treating commingling as automatically eliminating Royal’s separate-property interest; because the separate contribution could be traced, the savings certificates had to be divided between the separate and community estates.


McKinley v. McKinley, 496 S.W.2d 540 (Tex. 1973)