Divorce

Enforcement of High Net Worth Texas Divorce

Published on: February 20, 2022 | by Kelly McClure

iStock-1139699594-300x200 When a couple has complex and high-value assets, the actions required to achieve the property division may drag out long after their Texas divorce. The parties may need to refinance or liquidate certain assets. These ongoing transactions can result in additional disputes and possibly enforcement actions by one or sometimes both parties.

A husband recently challenged a court’s order in favor of the wife in dualling enforcement motions. The trial court entered an Agreed Final Decree of Divorce in March 2019. The decree awarded the wife a business, but required her to pay the husband a $770,000 equalization judgment secured by her primary residence and rental properties. She was also ordered to make monthly payments with 3% interest starting in February 2019. She defaulted in 2020, triggering an acceleration clause.

The decree also addressed the parties’ 2017 tax return and liability. The wife would pay $60,000 of the approximate $199,000 liability and any penalties and interest “arising solely out of the failure to previously make the $60,000 payment to the Internal Revenue Service.” The parties would split the remaining tax liability, penalties, and interest equally. The wife consented to filing the tax return in June of 2019, but the husband asked to review certain documents before he consented. There was evidence he received the documents in the summer of 2020 and notified the wife and accountant he had identified additional medical expenses within a week of receipt. He ultimately gave his consent to file the day before the enforcement hearing.

Ex-Wife Entitled to Ongoing Interest in Ex-Husband’s Defined Benefit Retirement Plan

Published on: January 31, 2022 | by Kelly McClure

iStock-1187184203-300x200 Retirement benefits are often subject to property division in a Texas divorce. In some cases, calculating the community interest is straight forward; however, in other cases, it can be somewhat more complex. In a recent case, a former wife challenged a trial court’s handling of the former husband’s retirement benefits after it concluded she had already received all of the benefits to which she was entitled.

The parties had been married 22 years when they divorced. The wife was awarded 50% of the husband’s Civil Service Retirement Benefits accrued as of the date of the decree’s entry. The trial court signed a Qualified Domestic Relations Order (“QDRO”) authorizing payment of an interest in the husband’s monthly annuity payments to the wife and stating that she was entitled to a survivor annuity.

Trial Court Enters Original QDRO

The parties began receiving the monthly annuity payments pursuant to the QDRO after the husband retired at the end of 2011. In March 2016, the husband moved to vacate the QDRO, arguing the wife was not entitled to a survivor’s benefit under the decree but a premium was being deducted from his monthly benefit. He asked the court to amend the QDRO to match the property division in the divorce decree.

Death of a Party During a Texas Divorce Case

Published on: January 25, 2022 | by Francesca Blackard

“A scroll of a Divorce Decree, tied with a black ribbon on a mahogany desk, with a dead white rose buttonhole from the Wedding Day, with a black pen. Copy space..”

A Texas marriage can end through either death or a court’s decree. If a party dies before judgment is rendered in a divorce case, the divorce case abates. In a recent case, a husband challenged a divorce when the decree was signed after the death of the wife.

The wife filed for divorce in October 2018, alleging insupportability, abandonment, and cruel treatment. In his counterpetition, the husband alleged insupportability, cruel treatment, and adultery.

Final Trial

At the trial on September 17, 2019, the court informed the attorneys that it needed time to make its rulings regarding the property. The court said it would email the parties with the decision. The proceedings resumed after a break on the record and the court pronounced the parties divorced and said the entry of the final decree would be ministerial.

Texas Mediated Settlement Agreement Upheld Despite Husband’s Failure to Disclose Assets

Published on: January 17, 2022 | by Francesca Blackard

Insurance agent checking policy documents in office.

When parties to a Texas divorce case enter into a mediated settlement agreement (“MSA”) that meets the statutory requirements, the MSA is generally binding and the divorce decree must adopt the agreement. An MSA may not be enforceable, however, if it was procured by fraud or other dishonest means.

A wife recently challenged a divorce decree incorporating an MSA that she asserted was procured by fraud. A divorce decree was issued in Dubai and both parties appealed. The wife subsequently petitioned for divorce and to modify the Dubai court orders in Texas. During discovery in the Texas cases, the husband disclosed one bank account.

The parties signed an MSA that gave the wife half of a retirement account in the husband’s name, $94,000 in cash, and the real and personal property and accounts in her own name or possession. The husband received the other half of the retirement account, real property in Florida, and the real and personal property and accounts in his name or possession. The parties also agreed to cease discovery, except as to issues involving the child.

Texas Appeals Court Denies New Trial and Affirms Disproportionate Division in Default Divorce

Published on: January 5, 2022 | by Kelly McClure

iStock-545456068-300x184 A court may proceed with a Texas divorce case even if a party does not appear for the trial. In some cases, a party who fails to respond to divorce papers or appear at trial may be entitled to a new trial, but they must meet certain requirements. In a recent case, a husband appealed the denial of a new trial and challenged the property division in a default divorce.

According to the appeals court’s opinion, the parties lived in the husband’s home in Texas after their marriage in Nigeria. The husband bought a home in New Hampshire and moved there in 2017. The wife petitioned for divorce in 2018.

The trial court issued a temporary restraining order prohibiting the husband from interfering with the wife’s health insurance, but he informed the insurer they were divorced while the divorce was pending. The wife’s coverage was cancelled. The wife had to pay $7,500 for medical expenses that the insurer had approved before cancellation. The trial court also prohibited the husband from terminating utility services, but the wife alleged he had them disconnected repeatedly.

Valuation and Separate Property in Texas Divorce

Published on: December 27, 2021 | by Kelly McClure

property-division-300x110 Courts must divide community property in a “just and right” manner in Texas divorce cases. The property division does not have to be mathematically equal, but should be equitable to both parties. To achieve a just and right division, the court needs evidence of the value of the assets before it. In a recent case, a husband challenged a property division, arguing the court had divested him of his separate property and did not have sufficient evidence to fairly divide the community estate.

The husband petitioned for divorce in 2017. His petition stated there was no community property to be divided.

The wife asked for a disproportionate share of the community estate, her own separate property, and reimbursement for community funds she alleged the husband used for the benefit of his separate property.

Former Spouse Cannot File New Suit for Division of Property Disposed of in Texas Divorce

Published on: December 22, 2021 | by Francesca Blackard

iStock-545456068-300x184 A trial court may order a post-divorce division of community property that was not divided or awarded to either spouse in a Texas divorce decree. Tex. Fam. Code § 9.201. The court may not, however, order a post-divorce division of property that was already divided in the divorce. The legal doctrine of res judicata prevents a party from re-litigating issues such as categorization of assets or improper division in a new case. Parties must instead address such issues through direct appeals. In a recent case, a wife sought a post-divorce division of certain bonuses the husband received after the divorce.

The parties married in 2014, and the wife petitioned for divorce the next year. The husband included several bonuses in his asset inventory. He listed a $0 value for the bonuses that would only be payable after the divorce if he remained employed on the designated date. He testified they had no value because they were conditional on future events.

The wife argued the future bonuses were deferred compensation for work performed during the marriage and estimated their value at more than $4 million.

Evidence of Separate Property in Texas Divorce Cases

Published on: November 29, 2021 | by Kelly McClure

iStock-1214358087-300x169 Texas law presumes that property possessed by a spouse during or on dissolution of the marriage is community property. Tex. Fam. Code § 3.003. The presumption can only be rebutted by clear-and-convincing evidence the property is separate. In a recent case, a husband challenged the characterization and distribution of property in his divorce.

The parties got married in 2008 and separated in 2018. The wife moved into her own apartment and filed for divorce in March 2018.

The wife submitted an inventory and appraisement, a copy of her student-loan activity, and a proposed property division. The husband also submitted an inventory and appraisement, as well as account statements and receipts.

Is it Possible to Keep Your 401(k) in Your Divorce?

Published on: November 25, 2021 | by Kelly McClure

iStock-654702696-300x200 One asset that many Texans do not consider their spouse to have an interest in is their 401(k) or any other retirement fund that they have been slowly building during the course of their marriage. Having to divide up your retirement funds may throw a wrench into one’s retirement plans, but, where possible, courts often award retirement accounts to the spouse in whose name they are held. Provided the somewhat-ambiguous “just and right” standard is met, Texas divorce courts have wide discretion to divide up individual assets as they see fit. This may involve splitting each asset, such as 401(k), and dividing the funds therein between the spouses. However, more commonly, courts attempt to award whole assets to either party to avoid an overly complicated, and perhaps unnecessary, division of property.

With this in mind, it is important to focus aspects of your case at trial on why the court should award your 401(k) to you. Factors such as your role in contributing to it, your need for future support, the value of assets in your spouse’s control, your and your spouse’s relevant incomes, which spouse is appointed primary conservator of their children (if any), and many others can be useful to craft a compelling case to keep your 401(k) plan (or any other asset).

In addition, you can sometimes increase the likelihood that you keep your 401(k) post-divorce by entering into a settlement agreement with your spouse. In Texas, spouses are free to enter into settlement agreements to resolve one or more aspects of their divorce, such as the division of their community estate. Settlement is an important process in a Texas divorce, because it can often be the best way to ensure that you retain your hard-earned nest egg and any other assets that you consider important.

Texas Appeals Court Enforces Property Distribution Years After Default Divorce

Published on: November 23, 2021 | by Francesca Blackard

images Failing to respond to a Texas divorce petition can result in a default judgment with an unfavorable property division. What happens, though, if the spouse who received the default judgment fails to take action to enforce the property division for several years? A Texas appeals court recently considered a case involving that issue.

Wife Obtains Default Judgment

The husband bought a home before he met the wife. They refinanced it jointly twice during the marriage. The wife subsequently filed for divorce and obtained a default divorce decree in February 2011. The decree listed the home as community property and stated that the wife owned it alone as separate property and that the court divested “any interest, title, and claim the Husband may have to [it].” The court further ordered the husband to sign any deeds necessary to transfer the property to her. There was a remaining principal of $43,399.14 according to the bank statement for the next month.

The husband testified he had not been served and only found out about the divorce case and default divorce later that year. The wife moved out about four months after the divorce. She stated the husband did not want her to live there and tried to “kick [her] out in a very aggressive way. . .” She claimed “[t]here was a lot of violence. . .” The husband testified the wife would yell at him that the house was hers and she was going to take it from him. He then went to court to see the divorce decree and learned it awarded the house to the wife. He said he could not afford an attorney at the time.