Divorce

Texas Appeals Court Affirms Disproportionate Property Division in Divorce

Published on: April 25, 2023 | by Kelly McClure

iStock-483613578-300x204 A court in a Texas divorce must divide the marital estate in a just and right manner. A just and right division does not necessarily mean an equal division. Courts may consider a variety of factors in determining the property division, including fault in the break-up, income disparity, the relative earning capacity of the parties, education, age, physical condition, and financial condition of the parties. A husband recently appealed a disproportionate division of property.

The appeals court’s opinion stated the parties established a common-law marriage in 2015 after living together for 18 years. They separated in 2018 and the wife petitioned for divorce in 2019, claiming insupportability and cruelty. In his counter-petition, the husband also alleged insupportability and cruelty and adultery on the part of the wife. They each requested a disproportionate division of the marital estate.

FINAL HEARING ON PROPERTY DIVISION

They reached a settlement on the issues related to the children, so the final hearing addressed only the property division. The community estate included bank accounts, the husband’s retirement benefits, vehicles, and debt. The parties had also purchased two homes as tenants in common before they were married. They each lived in one of the homes after the separation.

Texas Appeals Court Upholds Denial of Spousal Maintenance

Published on: April 21, 2023 | by Francesca Blackard

iStock-1331374129-300x200 Texas spousal maintenance is intended to give temporary support to a spouse whose ability to support themselves has diminished and whose assets are insufficient to support them. After 10 years of marriage, a spouse who shows they lack sufficient property or the ability to earn sufficient income to provide for their “minimum reasonable needs” may be entitled to spousal maintenance. Tex. Fam. Code § 8.051(2)(B). They must, however, overcome the rebuttable presumption that maintenance is not warranted by showing they have exercised diligence in earning sufficient income to provide for their reasonable needs or developing the necessary skills to do so during separation and the pendency of the divorce case. Tex. Fam. Code 8.053. In a recent case, a wife appealed a trial court’s denial of her request for spousal maintenance.

The appeals court’s opinion stated the parties got married in 2009 and separated in 2018. The husband lived in Texas and the wife lived in a vacation condominium they bought in Illinois in 2018. The husband petitioned for divorce in 2019 and the final hearing occurred in February 2021.

The husband requested an equal property division and no spousal maintenance.

The wife asked for a 60/40 split of the assets and $5,000 per month in spousal maintenance for five years. She had not worked during the marriage or during the divorce case. Her mother testified she loaned her $37,500 during the separation. The husband had also transferred about $50,000 worth of assets to the wife during the case. The wife testified her monthly living expenses were about $12,000. She had last worked as a medication aide in 2008. She testified she previously worked as a certified nursing assistant but did not want to do so again. She testified her dental assistance certification did not transfer to Illinois. She also testified she had photography certifications but had not tried to earn income from them. She started a real estate course in 2019, but had not passed part of the test. She also admitted she had “not done anything” to become employed since the divorce case commenced. She said businesses were closed due to the pandemic and she did not have time to seek employment due to the divorce case.

Considerations in Texas Divorces Involving Complex Business Assets

Published on: April 20, 2023 | by Francesca Blackard

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For many business owners and entrepreneurs, their business is not only imperative to their financial well-being but is also a large part of their identity. This can raise obvious concerns when divorce is on the horizon. And when a couple owns a large business or corporation, or the business assets are complex in nature, the thought of dividing business assets can be overwhelming. Nonetheless, dividing complex business assets is often required, and, therefore, it is imperative that spouses understand how Texas law handles these situations.

WHAT ARE COMPLEX BUSINESS ASSETS?

Complex business assets are assets that belong to or are associated with a business that do not necessarily lend themselves to simple valuation or division. For example, the monetary value of a business’s goodwill or intellectual property rights are two common examples of complex business assets.

ARE BUSINESS ASSETS DIVIDED BETWEEN SPOUSES IN A TEXAS DIVORCE?

The short answer is it depends. Texas is a community property state. So, any assets that are acquired by either spouse during the marriage are presumed to be community property, which is subject to division upon divorce. However, determining whether complex business assets are community property is not always a straightforward endeavor. And even then, this is only the first question courts must answer when hearing a divorce involving complex business assets.

Texas Court Addresses Validity of Post-Nuptial Agreement

Published on: February 18, 2023 | by Kelly McClure

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While it is not the most comfortable thing to consider before or during the marriage, premarital and postnuptial agreements are critical to establishing each partner’s property and financial rights. Texas law provides a mechanism for couples in a marriage to accomplish the same results that could have been created in a premarital agreement. These post-nuptial agreements are often referred to as “marital property agreements.”

There is a general understanding that there are many reasons why a couple might want to change the character of their marital assets during their marriage. Accordingly, the formalities and enforcement rules for post-nuptial agreements are, in effect, the same as for premarital agreements. However, Texas post-nuptial agreements are often prone to issues surrounding unconscionability and involuntariness.

TEXAS COURT FINDS POST-NUPTIAL PARTIAL AND EXCHANGE AGREEMENT INVALID AND UNENFORCEABLE

In one of the more recent published opinions regarding post-nuptial agreements, a Texas appeals court affirmed a trial court’s judgment finding that a post-nuptial Partition and Exchange Agreement (PEA) was not valid or enforceable.

How Do Texas Courts Value a Medical Practice During Divorce Proceedings?

Published on: February 17, 2023 | by Kelly McClure

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Valuing a closely-held medical practice during a divorce in Texas requires a complex understanding of the measures of value, methods of valuation, and Texas statutes. Although business valuations do not adhere to precise mathematical processes, general methods, procedures, and principles exist. In Texas, determining the value of medical practice is often a critical and hotly contested aspect of divorce proceedings. Understanding how a court will incorporate the value of medical practice to come to a “just and right” division of property is crucial to securing a favorable outcome in a divorce.

TEXAS ASSETS DURING A DIVORCE

Texas is a community property state, meaning only property created or accrued during the marriage is subject to division during a divorce. Community property may include real estate, businesses, medical practices, cars, money, and retirement accounts. Under the law, courts must make divisions that are “just and right.” It is important to note that “just and right” does not necessarily equate to a 50 percent division.

OWNERSHIP OF MEDICAL PRACTICE AFTER A DIVORCE

Medical practices fall under an important caveat of Texas’ property division laws. The Corporate Practice of Medicine (CPOM) doctrine prohibits non-physicians, entities, or corporations from practicing medicine. Thus, a court cannot divide the ownership of a medical practice to a non-physician spouse; instead, the court can only determine and divide the value of the practice.

Texas Court Rejects Mother’s Request to Modify Relocation Restrictions in Recent Divorce Appeal

Published on: February 14, 2023 | by Kelly McClure

iStock-902725964-300x200 When a judge finalizes a Texas divorce involving the custody of children, they will determine which parent has the right to determine where the child will live. However, courts will almost always place certain restrictions on that parent’s ability to relocate. While a relocation restriction may not immediately be an issue for a parent with primary custody, that may change if they obtain employment elsewhere in the state or decide to move for other reasons.

MOTHER UNSUCCESSFULLY SEEKS MODIFICATION ORDER TO PERMIT RELOCATION

In a recent opinion issued by the Fifth District Court of Appeals in Dallas, the court rejected a mother’s request to modify a divorce decree that placed restrictions on her ability to relocate as well as her rights to travel internationally with her son. According to the court’s opinion, Mother and Father divorced in November 2016. At that time, the court gave Mother the right to determine where the child would live, provided it was within Dallas County, Collin County, or Southlake Independent School District. The divorce decree also required either parent to provide written notice to the other if they intended to travel outside the United States with their son.

In July 2017, Mother married a man who lived in Oklahoma. Mother started to spend as much time as possible in Oklahoma, and she would often take her son. Subsequently, Mother sought modification of the initial divorce decree in hopes of being able to relocate. Father filed a counter-petition, hoping to be named as their son’s conservator so he could keep the child in Dallas County, Collin County, or Southlake Independent School District.

The Potential Property Division Issues That Can Come Up in a Texas High-Net-Worth Divorce

Published on: February 13, 2023 | by Francesca Blackard

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Texas is one of just a handful of states that follows that “community property” doctrine. Under Texas Family Code § 3.003, all property obtained by either spouse during the marriage is presumed to be community property, meaning both spouses have an equal ownership interest. And while disagreements related to how a couple’s assets are divided are common in all Texas divorces, this is especially the case in high-net-worth divorces.

WHAT IS A HIGH-NET-WORTH DIVORCE?

While there is no official definition of what constitutes a high-net-worth divorce in Texas, the consensus among Texas divorce attorneys is that any divorce involving liquid assets of $1 million or more is considered a high-net-worth divorce.

WHAT ISSUES COMMONLY ARISE IN HIGH-NET-WORTH DIVORCES?

High-net-worth divorces can involve all the typical aspects of a divorce, including child custody, child support, division of assets, and spousal support. However, due to the value and complexity of the assets, high-net-worth divorces tend to raise other issues, especially as they relate to property division. For example, a high-net-worth divorce may require the court to determine how the following classes of assets should be distributed:

401(k)s, IRAs and other retirement accounts;
Stocks, bonds, cryptocurrency and other investment holdings;
Real estate and property holdings;
Shared ownership in a business;
Pensions and benefits; and
Artwork and other collections.

Texas Court Denies Wife’s Request for Name Change in Divorce

Published on: January 20, 2023 | by Francesca Blackard

How-to-Improve-Your-Mental-Health-300x200 In some Texas divorce cases, how a party requests something can determine if they are successful. A wife recently challenged part of the property division and the court’s denial of her name change after a second trial.

The appeals court’s opinion states the wife informed the court the parties had agreed two pensions would be divided with “a 50 percent shared interest per each party as of the date of divorce.” The husband’s attorney agreed that was their understanding of the agreement.

In a memorandum ruling, the trial court granted the divorce and accepted the parties’ agreement as to the fifty-fifty division of pensions.

Attorney’s Fees in Texas Divorce Without Community Property

Published on: January 8, 2023 | by Kelly McClure

iStock-481542709-300x179 A couple may choose to enter into a Texas pre-marital agreement to protect their respective assets in the event of a divorce. A pre-martial agreement allows the parties to agree on use, control, and transfer of property, characterization of property or income, disposition of property in a divorce, and a number of other issues. In some cases, pre-marital agreements may lead to results that the parties did not consider.

Parties Signed Premarital Agreement

In a recent case, a husband challenged an award of attorney’s fees to the wife because their pre-marital agreement provided for property to remain separate. According to the appeals court’s opinion, the parties signed the pre-marital agreement which provided that their pre-marital separate property and property acquired during the marriage would stay separate. They married in 2016 and had a child the next year.

When the wife petitioned for divorce in 2018, she requested attorney’s fees. She indicated she sought fees “[t]o effect an equitable division of the estate” and for the services she provided related to support and conservatorship of the child. The trial court entered a final divorce decree in November 2019. The husband was ordered to pay $14,900 in attorney’s fees, with $10,000 of that being paid directly to the wife’s attorney.

Disability Can Be Established Through Lay Testimony in Texas Spousal Maintenance Case

Published on: December 27, 2022 | by Kelly McClure

iStock-545456068-300x184 A Texas court may award spousal maintenance in certain circumstances, including when a spouse lacks sufficient property to provide for their reasonable minimum needs and is unable to earn enough income to provide for those minimum reasonable needs due to an incapacitating disability. Tex. Fam. Code § 8.051. Spousal support is generally limited based on the length of the marriage, but may be indefinite while the spouse is unable to support himself or herself because of a disability. Tex. Fam. Code § 8.054(b).

A husband recently challenged a spousal maintenance award. According to the appeals court’s opinion, the parties had been married for about eight years and had a child together when the husband filed for divorce. The wife requested spousal maintenance.

Evidence Presented at Trial Regarding Spousal-Maintenance Request

The wife, the husband, and the husband’s mother all testified at trial. The wife testified about her work history, educational background, and health issues. She testified that she received daily dialysis, which required her to be connected to a machine for as much as 10 hours. She could, however, do the dialysis at home where she could move around the house and care for the child.