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Texas Court Denies New Qualified Domestic Relations Order More Than 20 Years After Divorce

Texas Divorce Court May Base Property Valuation on the Evidence Before It

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Originally published by Kelly McClure.

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Texas family law requires a just and right division of community property by a divorce court.   The court must, however, have the relevant information before it to identify and appraise the assets.  A party who refuses to disclose assets or information about their value generally may not complain about the court’s valuation of those assets.  A former husband recently challenged the court’s division of property.

Prior to the marriage in 1994, the parties signed an “Agreement in Contemplation of Marriage.”  The wife filed for divorce in 2005, and the husband counter-sued.  The divorce decree was issued in July 2009.

Issues related to the case had already been before the appeals court five times.  The appeals court had previously remanded certain issues related to the property division back to the trial court.  The husband appealed the “Judgment on New Trial for Property Division.”  He argued the trial court erred by not enforcing the prenuptial agreement regarding a bank account and a legal settlement.  He argued the agreement required property held in the name of either party to be presumed to be that party’s separate property.

 

The appeals court had previously held there was more than a scintilla of evidence that community funds had been commingled into the account and remanded the case so the trial court could consider the characterization of the account.

On remand, the trial court found there was substantial evidence community funds had been commingled into the account.  It also found the husband “offered no documentary evidence, and no clear and convincing evidence tracing separate funds into the [account]…”  The court found the account was a community asset and awarded 50% of the funds to the wife.

The appeals court acknowledged the prenuptial agreement contained a presumption that property held in one party’s name was that party’s separate property, but found the presumption had been rebutted with evidence of commingling.  The husband therefore had the burden to trace the deposits to separate funds by clear and convincing evidence, but the trial court found he did not meet it.  The appeals court found the trial court did not err in concluding the account was community property.

The husband also argued the trial court erred in characterizing a legal settlement as community property.  According to the record, the husband filed the suit in his own name after the divorce petition was filed but before the divorce was finalized.

The husband did not disclose the asset during the divorce.  The decree stated that undisclosed assets were awarded to the party who did not have control or possession of them.  The trial court therefore did not err in finding the asset was not the husband’s separate property.

The husband also argued the trial court erred in failing to value the community estate at the time of the divorce.  The general rule is that property should be valued as of the date of the divorce.  The trial court generally had the discretion to determine if an appraisal is close enough to the date of the divorce to be considered in determining the value.

The husband argued the court should have based the division of the account on its value on the date of the divorce, not the date of the filing.  There was evidence, however, that the husband refused to provide information about the account during discovery.  The wife testified he refused to provide her with bank documents, but instead only offered her a release so she could obtain the information herself.  She testified that she only had one statement showing information from the account.  The appeals court noted that the husband was challenging the valuation and property division and therefore he had the burden to show the division was unjust.  He did not provide values of the property, and could therefore not complain that the court used the information it had.  The trial court valued the property using the only bank statement it had.  The appeals court found no abuse of discretion in an unjust or unfair way when it awarded the wife half of the property appraised based on the evidence before it.  The appeals court made a similar finding regarding other accounts where the only evidence of their value was the wife’s testimony.

The husband also challenged the valuation of a CD account that was awarded to the wife.  The wife testified the husband and his mother opened the account with funds from the first account.  She testified about its value as of November 2005 and how much was withdrawn when it was closed in August 2007.  The husband did not offer any information regarding valuation of this asset at the time of the time of the divorce.  On remand, the trial court valued the CD account based on the testimony of its value in 2005.  The appeals court found the trial court abused its discretion by failing to use the evidence closer to the divorce.

The husband also argued the trial court improperly awarded the wife 100% of assets it found were undisclosed.  The trial court had ordered in the decree that undisclosed assets were awarded to the party who did not have possession or control of them.  The husband had not challenged that part of the order in the previous appeals.

The accounts in question were first disclosed in the trial on remand.  The accounts had been opened during the marriage by the husband and his mother, who had passed away.  They were therefore in the husband’s control, and he failed to disclose them during the original proceedings. The trial court awarded the accounts in accordance with the decree.  The appeals court therefore found no abuse of discretion in that action.

The appeals court affirmed the judgment in part and reversed in part.

If you are anticipating a divorce with complex assets, the experienced Texas divorce attorneys at McClure Law Group can advise you and help you through the process.  Call us at 214.692.8200 to set up an appointment.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



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Want to resolve your Texas family law case outside of court? Remember these rules of engagement

Community Property issues in Texas family law cases

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Originally published by The Law Office of Bryan Fagan, PLLC Blog.

Premarital and Marital Property Agreements are contracts between you and your spouse or spouse-to-be that can have a great deal of importance. A signed, written agreement between the two of you that allocates debts and property into either the community or separate property column will determine how each piece of property is treated in the event that your marriage ends in a divorce. We hear about premarital agreements or “prenuptial” agreements all the time in the media when rich, famous people get married. However, these sort of agreements are not just for the uber-wealthy.

A premarital agreement will go into effect the day that your marriage begins. Most people that enter into these agreements do so to limit the amount of property or debt the community estate will accumulate over the course of their marriage. On the other hand, if you and your spouse were to enter into a similar agreement during the course of your marriage it would be known as a marital property agreement. Essentially both documents are the same, it is just a matter of when the agreement comes into being- before or after the marriage has started.

How a premarital or marital property agreement works in the context of a divorce is that whichever spouse files for the divorce will reference the property agreement within the Original Petition for Divorce. When it comes time for the final orders of your divorce to be filed at the conclusion of your case, a copy of the agreement will typically be attached to those orders as an exhibit for reference purposes.

How is community property divided in a divorce?

If you and your spouse have not entered into a premarital or marital property agreement, then it is the responsibility of the judge to divide your community property and debts. That is, the judge must divide the property in the event that you and your spouse cannot agree to do so in mediation or in an informal negotiation settlement conversation. Keep in mind that although Texas is a community property state, debt and property does not have to be divided 50/50 between you and your spouse. Factors like the size of each of your separate estates, fault in the breakup of the marriage as well as your income will weigh on a judge if he or she must divide your community estate.

In many cases, the community property that you and your spouse own cannot be divided straight down the middle. Let’s consider the most commonly divided large item of property that you and your spouse could have: the marital house. The easiest route that you and your spouse could go would be to sell the house and split up the equity that you would get after the mortgage and other costs of the sale are taken care of. There is relatively little hassle in doing this and allows both you and your spouse to wipe your hands clean of this asset and move on.

However, that is all true when you take the sale of the house in a vacuum. Consider what could change if you and your spouse have a child together. In many cases, a judge will award the family house to whichever parent is named the primary caretaker of your child. Obviously, it would have to be shown that this parent can afford the mortgage payments on their own. The reason a judge would order this would be to allow your child to have some degree of stability and consistency by remaining in the family home after the divorce concludes.

If you are the parent who is not awarded the right to be the primary caretaker of your child then you may be wondering where this leaves you. Would a judge really order you to leave the house, not award you primary responsibility for your child and then not allow you to gain any monetary benefit from the house? The answer to that question is, no.

Many times what a judge will order is that the house should be sold as soon as your child turns 18 and the sale proceeds will be split between you and your ex-spouse at that time. Or, you may be able to exchange any equity in the house for another piece of property in the community estate that could equal the value. For example, if there is a classic car that was purchased during the marriage that roughly equals your equity position in the home, that vehicle could be awarded to you.

The thing to keep in mind is that while a judge will do their best to divide the community estate in an equitable fashion, no judge is perfect. It is an impossible task to ask a judge to learn your family dynamics well enough over the course of a one or two day trial to do a perfect job of dividing the community estate. This is why we encourage people like yourself to do everything that you can to attempt to settle your case in mediation rather than to leave the decision up to a judge.

Will you have to pay spousal maintenance in your divorce?

Simply put, spousal maintenance is a payment that is ordered by a judge to be made from your future income to support your ex-spouse after your divorce has concluded. Although it is not a term that is officially used in Texas, many people know of this relationship as “alimony.” You and your spouse can agree to some degree of spousal maintenance in mediation, so don’t think that you have to go see a judge if you want to push for spousal maintenance payments.

Spousal maintenance is typically ordered towards the benefit of spouses that lack sufficient property to provide for their minimum basic needs. The key is that you and your spouse need to have been married for at least ten years in most cases for a judge to be able to order that you receive spousal maintenance. Other circumstances that could lead a judge to order that you should receive spousal maintenance is if your spouse has engaged in acts of family violence against you in the two year period prior to your divorce or you or your child have a disability that negates your ability to work outside of your home.

How much spousal maintenance can be awarded in your divorce?

A judge has limits to how much in spousal maintenance can be awarded in your case. Additionally, a judge can only order that spousal maintenance payments be paid for certain periods of time depending upon the length of your marriage. Your judge will need to determine how much money you would need to meet those minimum, basic needs that we just finished discussing. Either way, a judge cannot order that you receive more than $5,000 per month or 20% of your spouse’s gross monthly income in spousal maintenance. Your spousal maintenance award will be limited to certain periods of time unless you can present evidence that shows due to an incapacitating injury or physical impairment that you would be unable to earn an income to support yourself.

How issues related to your child can impact your divorce

Your Final Decree of Divorce will be the final orders issued in your divorce case. These are the marching orders that you and your ex-spouse will need to follow until you come back and have those orders changed/modified, if you do that at all. Part of those final orders will be a section that covers a Parenting plan for you, your ex-spouse and your children. The conservatorship designation of both you and your ex-spouse, a visitation schedule, child support, medical support and any other issues relevant to your family will be detailed in this section.

The reason why so much detail is put into a parenting plan is to, in theory, minimize the risk that you and your ex-spouse have as far as disagreements and animosity that surrounds co-parenting in your post-divorce life. Of course, this may not be the case for you and your ex-spouse but the intention is to lay out a clear cut path for your parenting to take in hopes to creating some sense of post-divorce harmony. If issues arise in the midst of that post-divorce life there are steps you can take to correct those issues- more on that in a later blog post.

How long does the parenting plan/child support plan go into effect for?

A family court in Texas has the ability to enforce orders regarding your child until that child graduates from high school or turns 18- whichever occurs later in time. In the event that your child has a physical or mental disability that requires that he or she remain in the home for a longer period of time, the court will likely continue in its authority to enforce child support, custody and visitation orders until a later date.

When we talk about custody of a child in Texas, we are really talking about who is able to get physical possession of your child and on what basis. The word “custody” actually does not come up in the Texas Family Code, but it is a term that is used so much in our society everyone involved uses it with regularity. For the most part, you and your spouse will share in custody rights and duties associated with your child.

If it comes down a trial, the judge will need to make decisions in relation to custody of your child that are in that child’s best interests. A joint managing conservatorship is one where you and your spouse share in the rights and duties of raising your child on an even basis. The only rights that will differ significantly are the rights to determine the primary residence of your child as well as the right to receive child support. Only one of your can do those things associated with raising your child.

In rare instances, either your or your ex-spouse may be named as a sole managing conservator of your child. If there is a history within your family of family violence, child abuse/neglect or a protective order has been issued against either of you, then the sole managing conservator designation would be appropriate. Basically, the sole managing conservator is able to be in physical possession of your child much more and also holds more of the rights and duties associated with parenting your child on a daily basis.

A court would also look to whether or not you or your spouse have been absent for long stretches of time from your child’s life or if there has been a great deal of conflict in your relationship with your child and/or your spouse. The parent who is not designated the sole managing conservator of your child does not lose all of their rights, but their rights are curtailed because it is believed that doing so is in the best interests of your child. The sole managing conservator specifically has superior rights when it comes to making decisions for your child in regard to educational and medical issues.

Questions about divorce in Texas? Contact the Law Office of Bryan Fagan

We were able to cover a lot of information about divorce in Texas today. If you would like to ask us any questions or need us to clarify any of the points that we made please do not hesitate to contact the Law Office of Bryan Fagan today. We offer free of charge consultations six days a week with our licensed family law attorneys. These consultations are a great opportunity to ask questions and receive feedback about subjects that are important to you and your family.

Our attorneys and staff take a great deal of pride in being able to work with clients from across our area in the courtrooms of southeast Texas. We aim to always provide excellent represesntation of our clients while maintaining a strong sense of integrity and customer service. Contact us today in order to find out more about how we can assist you in your family law case.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



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Is Your Husband’s Professional Degree Marital Property?

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husband's professional degree marital property

 

In many marriages, one spouse may decide to earn an advanced professional degree to start a new career path or further an existing career. The degree might be for medicine, law, accounting, or another similar path, and earning an advanced degree is necessary to obtain a license to practice in many different professions.

The problem is that professional degree programs can be lengthy and rigorous, so it is imperative to have the support of a spouse while someone is pursuing this type of educational program.

Is Your Husband’s Professional Degree Marital Property?

How Wives Might Contribute to Professional Degrees

There are many ways that a wife can contribute to a professional degree for her husband. First, it can be difficult for a husband to work while pursuing a degree, so the wife may accept the full bread-winning responsibilities while her husband is in school. Her income might cover all of the household expenses, as well as educational expenses. After the degree is earned, a wife’s income might go toward paying off student loans and other educational costs.

An advanced degree and professional license can increase a husband’s income once he is done with school, which can improve the standard of living of both spouses moving forward. However, what happens if a divorce occurs? Does the husband get to solely enjoy the future benefits of his degree? Does a wife get reimbursed for her contributions to the professional degree?

How Degrees are Treated in Divorce

How a degree will be treated in your divorce will depend on the specific jurisdiction overseeing your case. Different jurisdictions have their own approaches regarding how degrees are treated in divorce. For example, for decades, the State of New York considered a degree to be marital property, and the value of the degree would be divided between divorcing spouses. However, New York reversed this policy as of 2016, and a degree is no longer treated as marital property.

That a degree is not marital property is the majority view of courts throughout the United States and Canada. Most states in the U.S. follow this principle, and the precedent in Ontario and other Canadian provinces is the same. Generally speaking, a degree or license cannot be sold or transferred like property, and the degree itself has no guaranteed future value without the choices and acts of the degree-holder to earn a living based on the degree.

However, this does not mean that a wife should get nothing in return for her contributions to a husband earning a degree. There are different ways courts handle this situation, depending on the specific circumstances at hand and the jurisdiction.

Options for Wives Regarding Professional Degrees

Courts can take different approaches to ensure that wives are fairly compensated for their sacrifices and contributions to a husband’s success. A couple of examples of how this matter might be addressed by a divorce court are as follows.

Reimbursement Approach

This approach acknowledges that a wife used marital assets to pay for the educational program, and requires the professional spouse to replace marital assets a wife lost as a result. While a wife does not necessarily have the right to a degree as property, she might have a right to reimbursement for her investments, from which she received no lasting benefits. This could be in the form of a larger property distribution, a lump-sum payment, or an alimony award.

Alimony as Compensation

In many situations, a husband’s professional degree will give him a higher earning potential for the future. On the other hand, a wife may have put her career aspirations on hold to support the household and husband while he earned the degree and professional license. When a divorce arises, the two spouses may have a discrepancy in their earning abilities.

A wife should not have a lower standard of living than her spouse after contributing to his professional degree and making sacrifices regarding her own career for the good of the marriage. In this situation, a court may award the wife alimony to accomplish one or more of the following:

  • Compensate her for her contributions
  • Help her enjoy the standard of living she had in the marriage if she cannot afford it based on her current earning power
  • Allow her to obtain her own education or training needed to boost her career and earning potential

Overall, the law in most jurisdictions generally supports the fact that spouses have the duty to support one another, including to help them obtain professional degrees and meet other goals. For this reason, a degree is generally not considered to be marital property, though there are other ways that wives can be reimbursed for their selfless contributions to a spouse’s professional future.

When you and your spouse are discussing property division and possible alimony awards in your divorce case, it is important to know your rights in your jurisdiction. This can help avoid agreeing to a property division resolution that fails to properly compensate you for your contributions and sacrifices. It is always a wise idea to discuss the complicated property and financial issues, such as professional degrees and income discrepancies, with an experienced divorce lawyer who can advocate for your rights.

The post Is Your Husband’s Professional Degree Marital Property? appeared first on Divorced Moms.

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The Marital Home: The Difference Between a Mortgage Deed and Property Title

The Marital Home: The Difference Between a Mortgage Deed and Property Title

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Divorce is a stressful and highly emotional time, in short, major decisions like what is to happen to the marital home should not be made out of emotion.

The post The Marital Home: The Difference Between a Mortgage Deed and Property Title appeared first on Divorce Magazine.

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Texas Court May Not Ignore Stipulations in Property Division in a Divorce Case

Texas Court May Not Ignore Stipulations in Property Division in a Divorce Case

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Originally published by Francesca Blackard.

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Generally, a trial court in a Texas divorce case has the discretion to divide marital assets.  A trial court can, however, abuse its discretion if it divides property without reference to guiding rules or principles and without evidence to support the ruling.  An appeals court recently found that a trial court abused its discretion by mischaracterizing separate property as community property and improperly divesting the husband of his separate property.

Both parties had been married previously, and both asserted throughout the trial that they had separate property.  They each pled and testified that they had separate property and submitted documentation showing they had separate property.  Additionally, each submitted sworn inventories and filed proposed property divisions admitting the other party had separate property.  Neither party ever disputed or contested the other’s claims. There were only two disputed issues before the court at the time of the trial:  how to divide the wife’s retirement account and whether there were any reimbursement claims against the separate property.

The trial court, however, issued a letter ruling dividing all of the assets as though they were community property, despite the various agreements, stipulations, and uncontested submissions.  The husband moved for reconsideration, and the wife filed a short response in opposition.  The appeals court noted she had received the majority of the husband’s separate property under the letter ruling.

 

Following a hearing, the trial court denied the motion, stating that neither party proved their separate property by clear and convincing evidence.  The court entered its final divorce decree in accordance with the letter ruling.

The husband appealed, citing three issues.  He argued the court erred in failing to confirm separate property to which the parties had stipulated, that the trial court improperly divested him of his own separate property, and  finally, that the court failed to make a just and right property division.

The wife argued the appeals court should uphold the final decree because the parties had not rebutted the presumption of community property by clear and convincing evidence.

There is a rebuttable presumption that property owned at the time of a Texas divorce is community property. If a party claims assets are separate property, he or she has the burden to prove they are separate property by clear and convincing evidence.  The evidence does not have to be undisputed or unequivocal, but it must be sufficient to give the trier of fact a firm belief that the property is separate.

Texas law identifies certain property as separate, including property that was owned prior to the marriage or property that was received by one spouse by gift, devise, or descent.  In Texas, the marital estate only includes the community property, and the trial court does not have the authority to divest a party of his or her separate property in the divorce decree.

Parties may stipulate certain issues.  Stipulations are agreements, concessions, or admissions made by the parties in a court case.  If issues are excluded by stipulation, those issues are excluded from the court’s consideration.  There is no need for proof on an issue that is stipulated.  A stipulation of fact is conclusive as to the issue it addresses and is binding on the court.

Both parties stipulated that they did not dispute the other’s claims for separate property.  They filed sworn inventories.  They each submitted proposed property divisions or final decrees requesting the other’s separate property be confirmed as separate property.  The appeals court found that the trial court did not have the discretion to issue a ruling contrary to the stipulations, admissions, and undisputed evidence.

The appeals court found the trial court had unjustly divided the marital estate.  The trial court had mischaracterized separate property as community property, and then it had awarded the wife a large percentage of that community estate.

The appeals court found the trial court abused its discretion in divesting the husband of his separate property.  The appeals court affirmed the divorce but reversed the rest of the judgment and remanded for the trial court to confirm the separate estates in accordance with the stipulations, admissions, and undisputed evidence and to divide the marital estate in a just and right manner.

This case shows that courts sometimes act beyond the scope of their discretion.  If you are facing a high-asset divorce, a skilled Texas divorce attorney can help protect your rights and your assets.  Call McClure Law Group at 214.692.8200 to schedule a consultation.

 

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



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