separate property

Characterization of Personal Injury Recovery in Texas Divorce

Published on: September 4, 2023 | by Francesca Blackard

The characterization of funds received for personal injuries can be a complex issue in a Texas divorce. Texas family law presumes that property possessed by a spouse during or on dissolution of the marriage is community property. When a spouse claims certain property is separate, that spouse must prove by clear and convincing evidence that the property is separate. Tex. Fam. Code § 3.003. Pursuant to Tex. Fam. Code 3.001, recovery for personal injuries sustained during the marriage is separate property. There is an exception, however, for recovery for lost earning capacity during the marriage. Because a spouse claiming separate property has the burden of proof, that spouse must show by clear and convincing evidence what part of a personal injury settlement is separate property. Recently, a husband appealed the trial court’s ruling which characterized his personal injury recovery as community property.

Personal Injury Settlement

According to the appeals court, the husband and wife married in 1994 and lived separately at various times during the marriage. In December 2014, husband was injured as the result of an automobile accident in the scope of his employment. The parties were separated when the accident occurred, but subsequently reconciled.

The husband settled for the other driver’s policy limits of $30,000. He also received net proceeds of $710,724.25 from a settlement with his employer’s under-insured motorist coverage. Thereafter, his attorneys transferred those funds into the parties’ joint checking account on October 8, 2019. The parties then separated that month and the wife filed a divorce petition on November 1.

Legal Description of Property Controls Over Address in Texas Husband’s Quitclaim Deed to Wife

Published on: June 21, 2023 | by Kate Mataya

When one spouse transfers property to the other spouse by deed, there is a rebuttable presumption the property was gifted to the other spouse as separate property. A deed must contain a sufficient description of the property. In some cases, there may be mistakes or conflicting information in the deed. When a court interprets a deed, it must determine the parties’ intent as expressed in the deed. A wife recently challenged a court’s interpretation of a quitclaim deed and the resulting characterization of the property based on a deed that stated the address for one tract of land but the legal description of another.

The husband bought a house and 23 acres and paid off the mortgage before the marriage. He also sold two of those acres and a mobile home before the marriage. The parties lived in the house on the 21-acre lot after the marriage. They subsequently bought back the two-acre tract and the mobile home.

Quitclaim Deed

Before he petitioned for divorce, the husband signed a quitclaim deed that stated the address of the 21-acre tract, but the legal description of the two-acre tract. The quitclaim deed described the property as 2 acres and identified the make, model, and serial number of the mobile home. The wife asked the court to characterize the 21 acres and house as her separate property based on the quitclaim deed. She argued the deed conveyed the house and 21 acres to her, but the husband contended that it referred to the two-acre tract and mobile home.

Texas Court Characterizes Property Conveyed by Husband’s Parents as Community Property

Published on: May 28, 2023 | by Kelly McClure

In a Texas divorce, there is a presumption that property possessed by either party during or on dissolution is community property. Tex. Fam. Code Ann. § 3.003(a). Property’s characterization is determined by inception of its title. In a recent case, a husband challenged a trial court’s characterization of property conveyed by his parents.

Conveyance of the Property

According to the appeals court’s opinion, the husband acquired the property from his parents during the marriage. The deed was labeled a warranty deed. It identified the parents as the grantors and the husband, “A MARRIED PERSON,” as the grantee. It stated consideration of $10 and “other good and valuable consideration.” It also stated the grantor “grants, sells, and conveys to Grantee the property.” A corrected deed was filed in 2015 changing the legal description.

The wife testified the husband’s parents were paid $1,750 for the property from a joint bank account. The husband and his father each testified that just $10 was paid as consideration for the property. Both spouses were listed on the construction loan application for building the home on the property. That application indicated the title would be held “Jointly with Spouse.”

House Bought Before Marriage Declared Both Parties’ Separate Property in Texas Divorce

Published on: May 21, 2023 | by Kelly McClure

Atlanta-Property-Division-Attorneys-2-300x198 Pursuant to the Inception of Title doctrine, a property’s character is determined when the party acquires their interest in it. This means that property acquired before the marriage will generally be characterized as that spouse’s separate property in a Texas divorce. In a recent case, however, the court determined that a house purchased solely in the name of the husband before the marriage was the separate property of both spouses.

According to the appeals court’s opinion, the parties started dating in late 1999. The wife moved in with the husband and his grandfather in 2003 or 2004. The husband bought a house from the wife’s parents in 2004 as “a single man,” according to the Deed of Trust and Note and both parties moved into it. They deposited their paychecks into a joint account from which the mortgage and property taxes were paid. They got married in July 2005 and lived together in the house until 2020.

Divorce Trial

The wife petitioned for divorce and ultimately requested reimbursement to the community estate. She asked for 50% of the community estate and 50% of the husband’s separate property. She argued the house was both parties’ separate property because they had lived together and both paid for it. The husband argued it should be his separate property.

Characterization of Personal Injury Recovery in Texas Divorce Cases

Published on: May 19, 2023 | by Francesca Blackard

iStock-178756342-300x199 Under Texas family law, property acquired by a spouse during the marriage is community property, unless it meets the requirements of separate property. Pursuant to Tex. Fam. Code § 3.001, personal injury recoveries are the separate property of the injured spouse, but recovery for lost earning capacity is community property. Property possessed by a spouse during or on dissolution is presumed to be community property, so a spouse claiming a personal injury recovery is their separate property must prove by clear and convincing evidence what portion is separate. A wife recently challenged the property division in her Texas divorce after the court concluded monthly payments from a personal injury settlement were the husband’s separate property.

According to the appeals court’s opinion, the wife had primarily been a homemaker during the marriage, but she sometimes worked part-time.

The husband was seriously injured at work in 2006. He was found to be incapacitated and the wife acted as his guardian in the resulting lawsuit. In the personal injury settlement agreement, the wife agreed, on behalf of her husband and herself, to release all claims against the defendants. The defendants’ insurance companies agreed to immediate cash payments and monthly payments for the rest of the husband’s life. The settlement provided that $1,150,000 of the cash payments was for the husband’s benefit and $50,000 would go to the wife. The settlement agreement also stated the monthly payments were for the husband’s benefit. The monthly payments were secured through the purchase of an annuity pursuant to the settlement agreement. The agreement also stated that funds were “damages on account of personal physical injuries or sickness” pursuant to the Internal Revenue Code. It also provided that the husband and wife were responsible for paying their attorney’s fees, court costs and case expenses, and any medical bills and liens.

Marital Home Built on Gifted Lots Retains Separate Property Characterization in Texas Divorce

Published on: May 13, 2023 | by Francesca Blackard

iStock-483613578-300x204 The characterization of property in a Texas divorce is generally determined by the property’s character when the spouse acquired it. Separate property is property a spouse owned before the marriage or acquired during the marriage through gift, devise, or decent. Improvements made to separate property are generally also separate property because they are not divisible from the land. Community property is property acquired by either spouse during the marriage that is not separate property. In a recent case, a wife challenged a court’s characterization of the marital home as community property.

Home Built During Marriage

According to the opinion of the appeals court, the parties got married in 1995. In 2000, the husband’s mother transferred two lots to both of the parties by a gift deed. They built the marital home on those two lots during the marriage. The wife moved out of the home when the parties separated in 2015. The husband had stayed there and paid the household bills and property taxes.

The trial court ordered the home to be sold. It awarded 75% of the net proceeds from the sale of the home to the husband and the other 25% of the net proceeds to the wife.

Texas Appeals Court Upholds Separate Property Characterization

Published on: April 27, 2023 | by Francesca Blackard

2018_10_agreement-300x165 Property possessed by either spouse at the time of a Texas divorce is generally presumed to be community property, but that presumption can be rebutted by clear and convincing evidence. A number of other rules and presumptions may affect the characterization of property during the property division. A husband recently appealed characterization of property purchased by the wife before the marriage as her separate property.

HISTORY OF THE PROPERTY

The wife bought a residential property before her relationship with the husband. After the parties got married, the husband and his children moved in with the wife. Both parties testified they frequently argued about money and finances. When they argued, the wife would say the house was hers.

Texas Appeals Court Reverses Separate Property Characterization in Divorce Case

Published on: February 7, 2023 | by Francesca Blackard

In a Texas divorce, the trial court must divide the estate in a just and right manner, but the division does not have to be equal. Property possessed by either party during or on dissolution of the marriage is presumed to be community property. To rebut the presumption, a party must generally trace the property back to separate property. Without tracing, a party’s testimony they purchased the property with separate funds will generally not be sufficient to rebut the presumption. However, a presumption of separate property arises if a deed includes a separate property recital stating the property is transferred as separate property. If a spouse is party to a transaction, they may not contradict the deed’s express recitals with parol or extrinsic evidence without evidence of fraud, accident or mistake. If a spouse is not party to the transaction, however, they may use parol evidence to contradict the recitals.

A husband recently challenged the characterization of property in his divorce.

Both parties requested a disproportionate share of the community estate. The husband also requested reimbursement based on alleged waste and actual fraud by the wife.

Texas Trial Court Lacks Jurisdiction to Correct Errors in Retirement Division Years After Decree

Published on: January 24, 2023 | by Kelly McClure

iStock-543681178-300x200 A final and unambiguous Texas divorce decree that disposes of all of the marital property generally may not be relitigated. The Texas Family Code allows the trial court to keep continuing subject matter jurisdiction to clarify and enforce the property division, but it cannot change or modify it. In a recent case, a wife challenged an order purporting to clarify the division of the husband’s military retirement nearly 25 years after the divorce.

The parties divorced in 1996. In the decree, the trial court found they were married for at least 18 years and 11 months and the husband had served at least 13 years and 9 months “of creditable service toward retirement.”

Trial Court Awards Wife 50% of Husband’s Military Retirement

The trial court awarded the wife “[a]ll right, title, and interest in and to fifty (50) percent of [the husband’s military] disposable retired or retainer pay” and 50% of all increases in the disposable retirement or retainer pay. The husband served for several more years.

Documentary Evidence in Texas Divorce

Published on: December 31, 2022 | by Francesca Blackard

iStock-1214358087-300x169 Although testimony can be important evidence in a Texas divorce, documentary evidence is needed for some claims. A wife recently challenged a number of issues in her divorce based on insufficiency of evidence.

According to the appeals court’s opinion, the parties acquired several rental properties during their marriage. The husband petitioned for divorce in July 2020. The trial was originally scheduled for October 7, 2020, but the wife moved for a continuance and asked for mediation.

The trial date was reset for April 28, 2021, but the wife moved for another continuance the day before. The trial was rescheduled for May 6, 2021, and she again requested a continuance. The trial court denied the motion.