Courts are required to divide marital estates in a just and right manner in a Texas divorce. A court may divide the estate unequally, but must have a reasonable basis to do so. Courts may consider a number of factors in making that determination, including the parties’ relative physical conditions, their relative financial conditions, disparity in their ages, the value of their separate estates, disparity in income or earning capacity, and the nature of the property. A husband recently appealed a disproportionate division.
Divorce Proceedings
The parties were married for 27 years and their children were all adults at the time of the divorce. The husband had been working for the Border Patrol since September 2022 and participated in the Federal Employees Retirement System (“FERS”). He testified he was not eligible to collect the benefits yet. He also testified he contributed to a Thrift Savings Plan, which is similar to a 401(k) for civil servants, with a balance of $135,734.73. His net earnings, not including overtime, were $4,500.34 per month. Tax records showed he earned $114,626.75 from his job as a border patrol agent in 2017 and $120,674.96 in 2018. He also testified he prepared taxes as a side job and earned an extra $24,800 in 2019.
The wife testified she was earning a monthly net income of $1,807.64, totaling $21,691.68 per year. She testified she had $2,229.97 in monthly expenses. The husband disagreed with her net monthly earnings, but agreed it was insufficient to cover her monthly expenses. The wife also testified her retirement account was worth $6,168.78.
The wife had a high school education and testified the husband had not supported her going to college. She said she had only been able to attend college classes when the children were young and when the parties had separated.
She testified the husband managed their money and deposited $175 from each paycheck into a separate bank account for her. She had to use this allowance for anything she needed to buy.
The wife testified about four different extramarital affairs the husband had. They reconciled after the first three. She testified they tried to reconcile again after the fourth, but she found out he was lying when he told her he was no longer in contact with the woman and that he was still messaging her.
The final divorce decree awarded the wife 60% of the net proceeds from residence, of the Federal Employees Retirement System benefits, and of the Thrift Savings Plan.
The Husband’s Appeal
The husband appealed, arguing the trial court erred in awarding the wife a disproportionate share of the marital estate by incorrectly attributing fault for the break up to him. The wife argued, however, that while the judgment stated the basis of the dissolution was adultery, it did not state that adultery was the basis for the disproportionate division.
The appeals court found no abuse of discretion in the trial court’s division of the marital estate. There was evidence supporting reasonable conclusions that the husband had a greater earning capacity and ability than the wife; the wife had supported his efforts to achieve that higher capacity; the husband did not support the wife’s efforts to achieve a higher earning potential; the wife’s annual income was just approximately 18% of the husband’s, and the husband was at fault for the break-up of the marriage.
Spousal Maintenance
The trial court ordered the husband to pay $1,534.47 in monthly spousal maintenance until the earliest of: two years from entry of judgment; the death of either party; the wife’s remarriage; or a subsequent order of the trial court affecting maintenance.
The husband argued the wife was not eligible to receive spousal maintenance pursuant to Tex. Fam. Code 8.051 because she did not lack sufficient assets to provide for her reasonable minimum needs. Pursuant to Section 8.051, if the marriage lasted at least 10 years, a court may order maintenance for a spouse who will lack sufficient property on dissolution to provide for their minimum reasonable needs and lacks the ability to earn sufficient income to provide for their minimum reasonable needs. There is also a rebuttable presumption against maintenance unless the spouse seeking it exercised diligence in earning sufficient income or developing the necessary skills to provide for their minimum reasonable needs during separation and while the divorce case was pending.
The husband argued the wife would receive funds from the sale of the home and the Thrift Savings Plan account. The appeals court pointed out that spousal maintenance is intended to be temporary and rehabilitative support and a spouse is not required to spend long-term assets or liquidate all of their assets to develop their skills and meet their needs.
The appeals court noted the wife was nearly 50 and spent most of her adulthood as a homemaker. There was evidence the husband had not supported her attempts to further her education, although she had completed some higher education classes. She was only earning $14.50 per hour at the time of the trial. There was evidence her expenses exceeded her monthly income. The appeals court determined the trial court could have reasonably concluded the wife successfully rebutted the presumption against maintenance and did not abuse its discretion in concluding she was eligible for maintenance.
Retirement Benefits
The husband also argued the court erred by dividing his FERS benefits and had divested him of separate property. He argued the award was not limited to the value of the benefits at the time of the divorce, which had not been established. The husband had testified his benefits would be an annuity and had no cash value until he retired.
The appeals court described the difference between a defined contribution plan with a value that can be readily ascertained, and a defined benefit plan that does not have a value that can be easily determined. The court must consider a number of factors in apportioning a defined benefit plan. The appeals court identified FERS as a defined benefit plan.
The appeals court noted that Texas law does not require the retirement benefits to be vested or matured to be subject to division by the court. Case law has held that accrued benefits in a defined benefit plan that were earned during the marriage but that have not yet vested or matured are a contingent property interest that may be divided in a divorce.
The Texas Supreme Court has previously established a formula to determine the value of the community interest in a defined benefit plan when the spouse started participating in the plan during the marriage but did not retire until after the divorce. The court divides the number of months the parties were married under the plan by the months the employee was employed under the plan at the time of the divorce, with the value of the interest based on the divorce date. Increases in the benefits that occur after the divorce are excluded as the employee spouse’s separate property. See Berry v. Berry.
The trial court had awarded the wife 60% of the benefits that accrued during the marriage before the divorce and directed that salary adjustments after the divorce would not be included. The order would allow the Office of Personnel Management to determine the wife’s interest at the time of divorce. The appeals court determined the order was consistent with the Berry case and did not award the wife separate property of the husband.
The appeals court affirmed the final divorce decree.
Obtain Experienced Dallas Divorce Counsel
If you are facing a divorce where there is a significant disparity in income, a knowledgeable Texas divorce attorney can help you fight to protect your rights and assets. Contact McClure Law Group at 214.692.8200 for a consultation.