Francesca Blackard, Author at Texas Divorce Attorney Blog

Texas Court May Classify Attorney’s Fees Awarded in Divorce as Non-Dischargeable in Bankruptcy

Published on: October 13, 2024 | by Francesca Blackard

“Domestic support obligations” as defined by the U.S. Bankruptcy Code are generally exempt from discharge in bankruptcy. Therefore, child support or spousal maintenance generally cannot be discharged in bankruptcy and must be paid. The treatment of other types of awards that may be granted in a Texas divorce, however, may not be so clear. In a recent case, a former wife appealed a divorce decree that expressly stated that an award of attorney’s fees against her was a domestic support obligation pursuant to the U.S. Bankruptcy Code.

The parties got married in September 2021 and the wife filed for divorce that December. The husband subsequently filed a counterpetition, alleging adultery by the wife. He asked the court to order the wife to pay his attorney’s fees and costs and classify them as a domestic support obligation for purposes of bankruptcy.

The court granted the divorce based on adultery and awarded attorney’s fees to the husband. The court granted an award of $38,306 to the husband’s attorney and the firm. The divorce decree stated that the attorney’s fees would be “considered a domestic support obligation. . .”

Reconstitution of Community Estate Due to Waste or Fraud in Texas Divorce

Published on: September 30, 2024 | by Francesca Blackard

A court dividing property in a Texas divorce may consider a number of factors, including fraud or waste of community assets by a party. A spouse may commit constructive fraud or waste by unfairly depriving the other spouse of the benefit of community assets. There is a presumption of constructive fraud when a spouse disposes of the other’s interest in community property without their knowledge or consent. A former husband recently challenged a property division after the court found he had committed fraud and waste on the community estate.

The parties married in February 2011 and the wife petitioned for divorce in July 2018. Both parties alleged constructive fraud and wasting of community assets by the other and sought reconstitution and a disproportionate share of the community estate.

The court granted divorce and ultimately confirmed $46,000 in an IRA as the husband’s separate property. The court found the husband committed fraud on the community estate and reconstituted the community estate. Included in the reconstitution was $71,483.33 for depletion of an IRA, $81,321.98 for dissolution of the husband’s interest in a limited liability company, and $17,000 for unpaid medical expenses for the children. The court also awarded the wife a disproportionate share of the community estate.

Judicial Admissions in Texas Custody Modification Case

Published on: September 13, 2024 | by Francesca Blackard

Generally, to obtain modification of a Texas custody or child support order, a parent must show that there has been a material and substantial change in circumstances since the prior order. Texas courts have held that a parent alleging a material and substantial change of circumstances in their counter-petition has judicially admitted the existence of a material and substantial change in circumstances. In a recent case, a mother appealed an order granting the father’s counterpetition request for modification after granting summary judgment against her modification petition.

Proceedings

The parties got divorced in 2017 and entered into a mediated settlement agreement (“MSA”). The MSA named the parties joint managing conservators of their child and placed a geographic restriction of Lubbock County on the child’s residence. It stated that if either party moved out of the county, the parent who remained would get the exclusive right to designate the child’s residence in Lubbock County.

The mother got married again and moved to Indiana in September 2020. The father stayed in Lubbock County. The mother petitioned for modification giving her the right to designate the child’s primary residence with no geographic restriction and additional child support.

Texas Appeals Court Affirmed Divorce Decree Characterizing Property Purchased with Inheritance as Separate

Published on: August 30, 2024 | by Francesca Blackard

Under Texas family law, community property is the property acquired by either spouse during the marriage that is not separate property. Separate property includes property a spouse owned or claimed before the marriage, property acquired by gift or inheritance during the marriage, and recovery for personal injuries, except recovery for lost earning capacity during the marriage. In a recent case, a former wife challenged a property division characterizing certain property as the husband’s separate property.

According to the appeals court, the parties got married in 2018. The husband inherited about $650,000 from his mother during the marriage. He bought a pickup truck and a home with those funds. The title and the deed each listed both parties as owners.

The husband petitioned for divorce in January 2023, asking the court to confirm his separate property and order reimbursement for the home and the pickup truck. The wife alleged both the truck and property were part of the community estate.

Texas Appeals Court Affirms Equal Property Division Despite Fraud Allegations

Published on: August 20, 2024 | by Francesca Blackard

A trial court in a Texas divorce must divide the community estate in a just and right manner. The court has broad discretion in determining what is just and right, and, when there is a reasonable basis for doing so, the court may order a disproportionate division. The court may consider a party’s claims for waste or fraudulent transfer of community property in its property division. Waste, or constructive fraud, occurs when one spouse wrongfully depletes the community estate without the knowledge or consent of the other spouse. Actual fraud occurs when a spouse transfers community property or uses community funds for the primary purpose of depriving the other spouse of their use and enjoyment. A reimbursement claim arises when the assets of one estate are used for the benefit of another estate without benefit to the first, such as community funds being used to pay for repairs to one spouse’s separate property. A former wife recently appealed the property division in her divorce, arguing the court abused its discretion by not awarding her a disproportionate share due to her fraud and reimbursement claims.

Divorce Proceedings

According to the appeals court, the parties each owned property when they married and acquired property together during the marriage. The husband granted a gift deed to a half interest in his separate property, identified by the court as “Bayou Shore.” The wife’s separate property was sold to her brother to resolve a community debt during the marriage.

Both parties alleged fraud and made claims for reimbursement and waste.

Texas Appeals Court Reverses Spousal Maintenance Order for Lack of Evidence of Diligence

Published on: August 6, 2024 | by Francesca Blackard

A court may order Texas spousal maintenance to a spouse who lacks sufficient property on dissolution and the ability to earn sufficient income to provide for their own minimum reasonable needs if the parties have been married for at least 10 years. Tex. Fam. Code § 8.051. A former husband recently challenged a spousal maintenance award, arguing the wife had not presented any evidence to overcome the presumption that maintenance is not warranted unless the spouse has been diligent in earning sufficient income to meet their minimum reasonable needs or in developing the skills they need to do so during separation and while the divorce proceedings are pending.

Divorce Proceedings

The parties got married in 2010 and had a child in 2016. They separated in November 2021 and the husband petitioned for divorce in early 2022.

By the time the trial occurred, the parties had been married for 13 years. The wife had been a stay-at-home mom since the birth of the child. She started doing marketing for her parents from home shortly before the trial because she said the judge told her she needed to start working.

Failure to Pay Debt Ordered in Texas Divorce Is Not Enforceable by Contempt

Published on: July 28, 2024 | by Francesca Blackard

Courts are required to effect a just and right division of the community estate in a Texas divorce. This division is not limited to assets, but in many cases, the court must also apportion the parties’ debts. A former husband recently challenged a provision in his divorce decree making his failure to make loan payments enforceable by contempt.

The husband asked the court to divide the estate in a manner it deemed just and right. The wife indicated she believed they would enter into an agreement for the property division, and, if so, the court to approve the agreement and divide the estate accordingly. Alternatively, she requested a just and right division.

The parties were not able to reach an agreement. They had a trial before the associate court. The husband asked the trial court for a de novo trial. Following the new trial, the trial court notified the parties it agreed with the property division by the associate trial court. The husband objected to a provision making his failure to make required payments on a loan from the wife’s retirement account punishable by contempt. He argued the provision violated article I, section 18 of the Texas Constitution. The trial court ordered the language related to contempt be stricken, but ultimately signed the final divorce decree with that language included.

Texas Court Rejects Wife’s Argument Husband Sold Commercial Goodwill

Published on: July 7, 2024 | by Francesca Blackard

The court must divide marital property in a just and right manner in a Texas divorce. In some cases, the parties only have tangible or clearly identifiable assets such as real estate and back accounts. In other cases, however, there may be more abstract assets involved. A former wife recently challenged a property division, arguing the court had not properly divided the assets in light of the husband’s sale of commercial goodwill.

The Husband’s Agreement

The parties got married in 1998. The husband worked as a financial advisor starting in the early 2000s. He entered into a “Non-Compete Representative Agreement” with a financial services company in late 2014. The agreement stated he would solicit security purchases as an independent contractor of the company and be compensated on a commission basis. He earned 35% for business written after June 1, 2014, and 52% for business written before April 1, 2014. He could increase his earning to 64% for business written before April if the “net GDC” was greater than $700,001. The agreement also provided that the husband could only continue business with the clients listed in Exhibit B after the agreement was terminated, but no Exhibit B was generated.

The divorce decree was signed at the end of February 2023. The court found the right to receive a greater commission for business written before April 1, 2014 was not a material asset to be divided but was income earned for services and constituted the husband’s “future separate property.” The court also found no commercial good will was transferred to the company because of the husband’s employment with the company or the agreement.

Texas Appeals Court Affirms Unequal Property Division and Spousal Maintenance

Published on: June 21, 2024 | by Francesca Blackard

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.

Texas Court Denies Decrease in Child Support After Mother’s Remarriage

Published on: June 6, 2024 | by Francesca Blackard

It can be difficult to modify a child support order to decrease the child support obligation. A father recently appealed the denial of his request for a decrease in his above-guideline child support obligation without step-downs. Generally, a child support order for multiple children will provide for a decrease in the child support obligation as support ends for each child. In this case, however, the parties signed an agreement for additional child support.

Original Order

The children were 17, 15, and 12 when the parents divorced in 2019. The parents were named joint managing conservators. The father’s gross yearly income was about $500,000. Pursuant to the decree, he was required to pay the mother $4,000 per month until all of the children graduated high school or were emancipated. He was also required to pay all of their uninsured medical, vision, and dental expenses until they reached the applicable deductible, and half after the deductible was met. The parties signed a separate “Agreement Regarding Additional Agreed-Upon Child Support” that required the father to pay an additional $2,000 per month if his gross income was more than $500,000 in a calendar year. Neither the decree nor the agreement had any provisions for step-downs.

The father testified he agreed to the extra provisions so the children and mother could stay in the area and in their current schools. The mother claimed she would not be able to stay in central Austin without the above-guideline support and the children would be required to go to different schools.