Divorce

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.

Texas Appeals Court Reverses Default Divorce Based on Errors in Service

Published on: September 26, 2024 | by Kelly McClure

A party who does not participate in a Texas divorce hearing may have a default judgment entered against them. If they meet certain criteria, however, they may be eligible for a restricted appeal. Those criteria are: filing notice of the restricted appeal within six months of the judgment being signed; having been a party to the lawsuit; not participating in the hearing, filing any timely motions after the judgment, or requesting findings of fact and conclusions of law; and an error that is apparent on the face of the record. Pike-Grant v. Grant. In determining if there was an error on the face of the record, the appeals court may only consider the evidence that was before the trial court.

In a recent case, a former husband challenged a default divorce decree based on an error on the face of the record.

Omitted Language in the Citation

If the defendant was not served in strict compliance with the Texas Rules of Civil Procedure, rendition of a no-answer default judgment is reversible error. The husband argued that the citation did not include all of the language required by Rule 99(c). Specifically, it had omitted language stating that the party may be required to make initial disclosures within 30 days after filing a written answer and directing the party to TexasLawHelp.org for more information. An amendment to the rule added this language at the beginning of 2021. The citation was issued more than three years after the effective date of the amendment, so the language was required.

Texas Appeals Court Affirms Termination of Spousal Maintenance in Lieu of Child Support

Published on: September 6, 2024 | by Kelly McClure

Texas spousal maintenance is generally intended to provide temporary rehabilitative support to spouses who are unable to support themselves. The appeals court recently reviewed a case in which spousal maintenance was ordered “in lieu of child support” for the parties’ now adult daughter, who is disabled.

The parties divorced in 1998. The trial court issued a modification order in 2014 that, “upon agreement of the parties,” the father would pay $1,096.55 per month in spousal maintenance in lieu of child support, purportedly to allow the daughter to qualify for more disability benefits. Additionally, any payments received for the benefit of the child, including from the Social Security Administration, were to be credited against the spousal maintenance.

Enforcement and Modification Proceedings

Each of the parents remarried. The mother’s husband passed away in 2020. She petitioned for enforcement of the spousal maintenance in early 2022, alleging the father had not made payments from June to December of 2021. The father filed a counter-petition, seeking to terminate the maintenance based on his retirement and the daughter getting half his Social Security Old Age Benefits (“SSOAB”), totaling $1,466 monthly plus increases for cost-of-living.

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 Affirms Order Requiring Ex-Husband to Sign Papers to Transfer Stock to Ex-Wife

Published on: August 14, 2024 | by Kelly McClure

After rendering a Texas divorce decree, the trial court retains continuing subject-matter jurisdiction to enforce its property division. Tex. Fam. Code § 9.002. The court may issue additional orders to enforce the property division. Tex. Fam. Code § 9.006. An order to enforce may help in implementing or clarify the previous order, but it may not make substantive changes to the property division. Tex. Fam. Code § 9.007. The court generally has broad discretion to enforce the property division.

In a recent case, a former husband appealed a court order requiring him to sign documents to effectuate the transfer of stocks that were awarded to the wife in the divorce.

The divorce decree awarded the wife all shares of a particular stock owned by the husband or in his name. It also ordered the husband to appear at a particular law office on or before September 15, 2022 to sign the documents to transfer the shares.

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.

Texas Court Declines to Recognize Pakistani Divorce Due to Lack of Notice

Published on: July 31, 2024 | by Kelly McClure

Texas divorces can be complicated when other potential jurisdictions are involved. A former husband recently challenged his Texas divorce, arguing the parties had already been divorced in Pakistan.

The parties got married in 2009 in Pakistan and subsequently moved to Texas. The husband petitioned for divorce in Dallas County in May 2021 and the wife filed a counter-petition. They both alleged the had been residents of Dallas County for the preceding 90 days and domiciliaries of Texas for the preceding six months.

In January 2022, the husband filed a “Notice of Filing of Foreign Judgment” and attached a “Divorce Registration Certificate” that had been issued in Pakistan on January 1, 2022. It showed addresses in Lahore, Pakistan for both parties for dates in September 2021, December 2021, and January 2022.

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 Appeals Court Husband Did Not Overcome Community Presumption in Divorce

Published on: July 14, 2024 | by Kelly McClure

Community property is the property acquired by other spouse during the marriage, except separate property. Tex. Fam. Code § 3.002. Separate property is generally that property the spouse owned or claimed prior to the marriage, property acquired by gift, devise, or descent during the marriage, and personal injury recoveries with the exception of recovery for lost earning capacity during the marriage. There is a presumption that property possessed by either spouse during or on dissolution is community property. This presumption can only be rebutted in a Texas divorce by clear and convincing evidence. Tex. Fam. Code § 3.003. Separate property remains separate as long as the community presumption is overcome by tracing the assets back to separate property. Mischaracterizing property and awarding a spouse’s separate property to the other spouse constitutes an abuse of discretion and reversible error by a trial court in a divorce. A husband recently appealed the property division in his divorce, arguing the trial court had mischaracterized some of his separate property as community property.

Property Division

The parties had been married about nine years when the wife filed for divorce. In his counterpetition, the husband asked the court to confirm certain property was his separate property. The trial was focused on the property division, included two houses and an individualized retirement account (“IRA”). The trial court awarded one house to each party and ordered that the spouse awarded each house was responsible for the balance of that house’s mortgage. The court also ordered the IRA funds be split equally. The trial court confirmed certain home furnishings were the wife’s separate property and a sword stand and orange sofa were the husband’s separate property.