Property

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.

Spouse May Be Required to Reimburse Community Estate in Texas Divorce

Published on: June 12, 2018 | by McClure Law Group

When one spouse controls the finances, he or she has the opportunity to use community assets to the benefit of separate property. The other spouse may challenge the disposition of those funds during a Texas divorce. The spouse in control of the finances has a fiduciary duty to the other spouse during the course of the marriage.

A Texas appeals court recently considered whether a husband was required to reimburse the community estate for certain expenditures. The trial court awarded the wife the majority of the community estate and ordered the husband to reimburse it for certain expenditures. The husband appealed, arguing the evidence did not support the disproportionate division and some of the amounts he was ordered to reimburse.

The husband had entered the marriage a wealthy man with several businesses. The wife alleged he allowed his separate companies to keep funds he should have received. Since his businesses were S corps, he was personally responsible for paying taxes on the funds, even if they were not distributed. The wife sought reimbursement for the undistributed funds and for the income taxes paid from the community estate. Each party presented expert testimony. The wife’s expert calculated that the estate had paid $1,000,742 in taxes for the separate companies and was entitled to reimbursement. The husband’s expert said he did not agree the wife had a valid claim for reimbursement and presented his own calculations, showing $841,108 was paid. The jury found the community estate had paid $841,108 in income taxes for the husband’s separate businesses. The trial court included that amount in the valuation of the reconstituted community estate.

Reimbursement for Loans Made to Separate Property in Texas Divorce

Published on: May 24, 2018 | by Francesca Blackard

When a business is struggling, the owner often wants to put money into it to try to save it. This can be a simple matter when both spouses have ownership in the business. Texas divorce attorneys understand, however, that it can be complicated when the business is one spouse’s separate property. A Texas appeals court recently addressed this issue.The wife filed for divorce nearly 14 years after the marriage. At the time of the divorce, the wife was employed full-time. The husband was unemployed and not seeking employment. He stated he spent significant time dealing with a lawsuit involving his separate business.

The husband stated the business existed before the parties were married. It ran independent businesses inside amusement parks. Under the original arrangement, it paid the amusement park about 30% of the earnings of each location. The wife stated that the business had done well and was profitable at that time.

Former Spouses Are Generally Not Fiduciaries in Texas

Published on: May 24, 2018 | by McClure Law Group

Divorcing parties sometimes agree to hang on to property for some time following the divorce. Sometimes, they want to allow the children to remain in the home. Sometimes, they want to make repairs to increase the property’s value. Texas divorce attorneys know that there can be a lot of conflict prior to the sale of the property. In a recent case, a Texas appeals court considered whether a former husband had a fiduciary duty to protect his former wife’s interest in the property they owned together.

The divorce decree ordered the parties to list the property for sale and to split the proceeds equally. The wife moved to enforce the decree nearly 12 years later. She claimed the husband failed to comply with the decree and failed to cooperate with selling the property. She asked for clarification of any part of the decree the court found was not specific enough to enforce by contempt. She also brought a breach-of-fiduciary-duty claim against him.

The wife argued the parties had agreed not to sell the property until the children graduated from high school. She alleged her husband had willfully withheld the proceeds of an insurance claim for damage to the house. She also claimed he had forged her name on an insurance check that was made payable to both of them and that she had to sue him to get half of the proceeds. She claimed she was unable to pay for repairs to the property because the husband had withheld the proceeds. The wife was ultimately charged for demolition of the house after the city condemned the property.