Property

Texas Divorce Court May Reconstitute Community Estate to Account for Waste and Dissipation

Published on: April 12, 2019 | by McClure Law Group

Property division in a Texas divorce must be equitable. In dividing the property, the court may consider amounts from the community estate that a party has dissipated or wasted. In a recent case, a husband appealed the divorce decree arguing that there was insufficient evidence to support the division and that the division was manifestly unjust and unfair.

The couple had been married for about 40 years when the wife filed for divorce. An associate judge issued a final divorce decree in 2015. The wife filed a motion for a new trial, which was granted.

The couple lived in a trailer home on an undivided tract of land. The husband ran his electrician business from the trailer and stored the heavy equipment he used for the business in the barn. This real property was awarded to the husband in the original trial. After the second trial, the property was partitioned into two tracts. The property division awarded Tract A with the trailer to the husband and Tract B with the barn to the wife.

Money Is Not Tangible Personal Property in Texas Divorce Case

Published on: March 21, 2019 | by McClure Law Group

A Texas divorce case is not always over when the judge signs the final divorce decree. The decree sets forth the property division, but the parties must take action to achieve the division. If party fails to surrender property, the other party may need to file a motion to enforce the property division in the decree. A former husband recently challenged an enforcement order, arguing that the motion had not been filed timely and the claim was time-barred.

The couple divorced in 2012. The wife moved for enforcement of the agreed divorce decree in 2016. She also petitioned for breach of alimony contract. The court held a bench trial and subsequently signed an enforcement order, ordering the husband to make the payments to satisfy the funds transfers required by the decree, to make the unpaid alimony payments, to provide health insurance for the children and reimburse the mother for the premiums she had paid, add the mother to the custodial accounts for the children, and pay the mother’s attorney’s fees. The husband appealed.

The husband argued the portions of the order awarding funds to the wife were barred by the statute of limitations. Section 9.003 of the Texas Family Code requires a suit to enforce division of tangible personal property to be filed within two years from the date the decree was signed or becomes final after appeal.

Texas Appeals Court Reverses Property Division Due to Lack of Evidence

Published on: January 7, 2019 | by Francesca Blackard

Property division in a Texas divorce must be just and right. The property division may be “just and right” in a case where one party does not participate, but the court must have sufficient information to use its discretion in dividing the property fairly. A spouse recently challenged the property division following a proceeding in which he did not participate.

One spouse petitioned for divorce in July 2017, alleging insupportability, which is the “no fault” ground for divorce in Texas. He alleged, however, that the respondent had committed fraud on the estate and asked the court to reconstitute the community estate. He also asked the court to confirm certain property as his separate property.

He claimed the respondent was a nonresident of Texas, but the marital residence had most recently been in Texas and he had filed the petition within two years of the date the marital residence ended (which would allow for Texas to have personal jurisdiction over the nonresident respondent). The process server swore in an affidavit that the respondent had been served with the petition in Miami, Florida.

Gift Presumption in Texas Property Division

Published on: December 31, 2018 | by Kelly McClure

A married couple purchasing a home together generally does not consider how that property will be divided in the event of their divorce. When courts divide marital property in Texas divorce cases, there is a presumption that a spouse who uses separate funds to acquire property during the marriage and titles it in the name of both spouses intends to gift half of the separate funds to the other spouse. The purchasing spouse can, however, rebut this presumption with evidence clearly establishing he or she had no intention to gift the funds.

A wife recently challenged a property division that awarded 50% of a house to the husband despite unequal separate-property contributions. The wife had contributed nearly $65,000 to the purchase of the house, while the husband contributed $8,650. The title to the property was in both spouses’ names.

In its findings of fact and conclusions of law, the trial court found the wife failed to present clear and convincing evidence that would overcome the presumption she intended to give 50% of her separate property interest in the marital home to her husband.

Texas Appeals Court Finds Challenged Order Reflects Mediated Settlement Agreement

Published on: November 21, 2018 | by McClure Law Group

In a Texas divorce, the parties are sometimes able to reach a mediated settlement agreement (MSA). Texas Family Code Section 6.602 sets out the requirements for an MSA to be binding. To be binding the MSA must include a “prominently displayed statement” that it is not subject to revocation. It must be signed by each party and by the party’s attorney if the attorney is present at the time the agreement is signed. Sometimes, however, after reaching agreement on the terms of an MSA, the parties do not agree on what those terms really mean.

A wife recently appealed an amended Qualified Domestic Relations Order (QDRO) on the grounds it did not accurately reflect the parties’ MSA. The parties had agreed on a MSA and were divorced in 2012. The MSA set forth distribution of the husband’s Texas Municipal Retirement System (TMRS) retirement plan. It provided he would keep the retirement through his employment. If the retirement exceeded $100,000 as of the date of the MSA, the excess was to be divided equally between the parties.

The divorce decree stated that if the amount exceeded $100,000 as of January 12, 2012, the excess was to be divided equally between the parties. The trial court signed a QDRO on July 10, 2013, but TMRS rejected it. The trial court signed an amended order that stated the wife was awarded a portion of benefits payable which the husband may become entitled to receive from the retirement plan through accumulated contributions or annuity. The order set forth the calculation for determining the wife’s portion. The court subsequently amended the QDRO again, setting out a specific number for part of the calculation. The husband moved to set aside the Second Amended QDRO, arguing it allowed the wife to receive payment of interest that was not included in the MSA. He also argued that the wife’s share should not include municipal contributions. The trial court changed the calculation to exclude municipal contributions and signed a Third Amended QDRO.

Texas Court Finds Clarification Order Not Improper Modification of Divorce Decree

Published on: November 15, 2018 | by Kelly McClure

In Texas divorce cases, understanding procedure is very important. Missing a deadline can have serious and irreparable consequences. In a recent case, an ex-husband attempted to challenge a clarification order more than four years after it was issued.

The trial court signed a final divorce decree in April, 2011. The ex-wife moved for clarification of some of the divorce decree provisions. In August 2011, the court signed a clarification order. The court subsequently signed two orders of contempt and an income withholding order.

The ex-husband filled a bill of review more than four years after the clarification order was signed. The ex-husband alleged the clarification order was void because it was an improper modification of the divorce decree pursuant to Texas Family Code Section 9.007. The ex-wife argued the ex-husband’s position was barred because it was outside the statute of limitations and the clarification order was not void. The trial court denied the petition, and the ex-husband appealed. He argued that the trial court erred in denying the petition because he had shown the clarification order was void.

Findings of Fact and Waiver in Texas Divorce

Published on: October 27, 2018 | by Francesca Blackard

In a Texas divorce case, failure to follow the required procedures can result in the loss of property. Parties should take care to identify all of the property that needs to be divided. Additionally, if the court fails to address certain property in its findings, then the party must follow the appropriate procedures or may risk waiving that issue, as occurred in a recent case.

The parties married in 2007 and the husband filed for divorce in 2014. He had been in the dairy business for many years and owned several properties at the time of the marriage. The dairy sold milk and the court entered a temporary order granting the wife the proceeds from the “milk store” instead of spousal support. She received a total of about $27,000 while the divorce was pending. The wife agreed the husband bought some of the properties, including the dairy, before the marriage.

The wife appealed the property division. She sought reimbursement for half of the value of taxes the community estate allegedly paid for the husband’s separate property during the marriage, the value of loans allegedly paid by the community to acquire goods and improvements for the dairy during the marriage, and the value of her separate property 401k used to improve the dairy.

Court Can Disproportionately Distribute Assets Due to Fraud in Texas Divorce

Published on: August 7, 2018 | by Francesca Blackard

A spouse who improperly spends large amounts of community assets without the other spouse’s knowledge or consent may receive a smaller share of the remaining community estate during a Texas divorce. A Texas appeals court recently considered whether a property division was just and right after the trial court found the husband had committed fraud on the estate by spending money on other women.The wife filed for divorce after learning her husband had been unfaithful. The husband testified to having affairs for the past 30 years. He took the other women on trips and shopping sprees, paid their rent and car payments, and hired some of them and gave some of them money for their own start-ups. He paid for these things through his business accounts, company credit cards, and petty cash from his pharmacy.

The wife hired a CPA to provide an accounting of the husband’s businesses. The CPA rendered an opinion that more than $7 million was either missing or spent in transactions that did not benefit the community estate.

The husband rejected the amount identified by the wife’s CPA, claiming a large portion of the amount identified did not exist. His expert opined that the wife’s accountant had made conclusions based on insufficient data. The husband’s employee testified the husband never took petty cash. She also stated some of the transactions identified by the plaintiff’s accountant were not fraudulent because they benefited either the business or the community estate. The trial court found the husband was not a credible witness, spoliated evidence, and committed a fraud on the community of nearly $4 million.

Court Must Have Evidence of Property Value to Distribute Property in Texas Divorce

Published on: August 1, 2018 | by McClure Law Group

The court in a Texas divorce case must divide property in a just and right way. This does not necessarily mean that property is divided equally between the parties, but the division must be just. What happens, though, when only one party participates in the divorce proceedings? A Texas appeals court recently found that the trial court had to have sufficient evidence of the property values to divide the property justly.

The husband petitioned for divorce, but the wife did not answer or appear at the hearing. The husband testified that there were two vehicles and a mobile home in the community estate. He asked the court to award all of the property to him, but allow the wife to keep the property in her possession. He did not testify or provide evidence of the value of the property. The court granted the divorce and awarded the husband the vehicles, the mobile home, furnishing, and other goods and cash in his possession and control. The court did not award any property to the wife.

The wife filed notice of a restricted appeal. To succeed on a restricted appeal, she had to show that she filed the notice within six months of the decree, she was part to the lawsuit, she did not participate in the hearing or file post-judgment motions or requests for findings of fact and conclusions of law, and error is apparent on the face of the record. She clearly met the first three requirements, so the appeals court had to determine if there was error.

Texas Court Finds Distribution of “Net Payment” in Texas Divorce Did Not Address Pre-Tax Deductions

Published on: July 20, 2018 | by Francesca Blackard

In Texas divorces, it is common for the parties to agree to a property division and ask the court to approve the agreement and include it in the decree. Once the court does so, it generally may not modify or alter the property division included in the agreement. It may, however, still divide property that was not divided in the agreement and decree. It is therefore important for the parties to be sure the agreement to clearly divide everything, or they may have to go back to court to address something that was omitted. This can be difficult in some cases, however. What happens, for example, when the agreement and decree divide the net amount of a bonus, but do not address pre-tax deductions that go to one of the parties? A recent case addressed this issue.

The divorce decree incorporated the agreement between the parties, which included a detailed division of the marital estate based on the informal agreement the parties executed at a settlement conference. The agreement stated the husband would receive 47% of the net amount of his 2013 year-end bonus and wife would get a 53% portion of the “net amount after taxes and deductions.” The agreement also stated the wedding and engagement ring were the wife’s separate property.

The husband’s pay stub showed he received $460,000 for his 2013 bonus, but reflected two pre-tax deductions totaling $81,000. The deductions included $75,000 for deferred annual bonus and $6,000 for personal savings account contribution. Taxes totaled $108,711.10 and the pay stub listed $270,228.90 as the “net pay” for the bonus. The husband paid the wife 53% of the net pay amount.