Property

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.

Characterizing Gifts in Texas Divorces

Published on: May 17, 2018 | by Francesca Blackard

Dividing property is an important aspect of the divorce process. Only community property is divided by the court, however. Although property acquired during the marriage is presumed to be community property, Texas divorce attorneys know there are some exceptions. A gift made to one spouse during the marriage is separate property.

A Texas appeals court recently reviewed whether property conveyed by the husband’s mother was properly characterized as community property. The husband appealed the final divorce decree. He challenged the characterization of about five acres as community property. The court had found it was community property and awarded half of it to the wife.

At trial, the husband argued the property had been a gift from his mother and was therefore his separate property. The wife argued the couple had begun the process of obtaining an equity loan for repairs to the property in 2013. In November 2018, the husband’s mother signed a quitclaim deed transferring the property to her son. The wife testified the deed had been printed from the internet, and the intent was for the husband to get the property so that they could obtain the loan and repair it. The bank did not recognize the quitclaim deed, due to a lack of legal description of the property. The husband’s mother then executed a general warranty deed conveying the property to both the husband and the wife. The wife stated the warranty deed and a subsequent correction affidavit were intended to make both of them the property owners.

Attempted Compliance with a Texas Divorce Decree

Published on: April 26, 2018 | by Kelly McClure

Parties to a divorce often have to cooperate to complete the property division. Texas divorce attorneys know, however, that parties are not always willing to cooperate. A Texas appeals court recently considered whether a husband sufficiently complied with an order that he make a payment to the wife when he contacted the wife to make payment arrangements.

The parties came to a mediated settlement agreement and signed off on the proposed agreed final divorce decree. The final decree ordered the husband to pay the wife $10,000 for the marital residence within 90 days of May 13, 2014. Another section, under a subheading titled “Division After Full Payment of $10,000…,” provided that after the husband paid the $10,000 in full, he would be awarded the marital home.

Another section stated if the payment was not made in full within two years of May 13, 2014, the marital residence would be awarded to the wife, and the husband would be divested of all right, title, interest, and claim in the marital residence.

Property Division in Texas Divorce Must Be Equitable But Not Equal

Published on: April 26, 2018 | by Francesca Blackard

In a Texas divorce, the court is required to divide the property in a “just and right” manner. The court is not required to divide the property equally but must divide it equitably. It may order a disproportionate division if it has a reasonable basis to do so. There are a number of factors a trial court may consider in dividing the community estate. Those factors include the nature of the property, income disparity, business opportunities, relative financial conditions and obligations, education, physical condition, age, fault in the break-up, the benefit the innocent spouse would have received if the marriage continued, the size of the separate estates, and a probable need for future support.

The husband in a recent case challenged the disproportionate division of property in favor of the wife. The wife filed for divorce after finding escort and dating websites on her husband’s phone and home computer. She ultimately requested a disproportionate division of the property, arguing the husband was at fault in the breakup, wasted community assets, gifted community assets, and committed actual or constructive fraud.

The parties had a variety of financial and investment accounts. The wife said her husband managed her separate property investment accounts, and she did not have information about them. She also testified that he provided her with a statement purportedly identifying all of the accounts. That statement included $60,000 in company stock of his former employer. A 1099 indicated the husband sold 6,000 shares of the stock for $1,200 in September 2015. He testified he was “given” 6,000 shares when he started working there, but he had to pay $1,200. He further testified that the company required him to sell the stock back for the purchase price when he left the company. He said he did not update the information on the statement after selling the stock.

Waiver of Appeal in Texas Divorce Cases

Published on: April 19, 2018 | by McClure Law Group

Texas divorce attorneys know that even when a divorcing couple reaches a settlement agreement, there still may be issues that are in dispute. Settlement agreements sometimes include provisions that the parties waive the right to appeal. In a recent case, a husband attempted to appeal a final divorce decree despite a waiver of appeals in the settlement agreement.

When the couple filed for divorce, they owned several piece of property. They had two parcels of the wife’s family ranch, one that she owned as separate property. They purchased the second parcel from the wife’s brother and financed it through a loan secured by her separate property parcel. They also took out a second loan on the wife’s property to pay for divorce attorney’s fees.

The parties eventually entered into an “Informal Settlement Agreement.” Pursuant to this agreement, the husband would receive the family homestead and the wife would receive both parcels of her family ranch, with the husband paying the two loans. As part of the agreement, the parties waived their right to appeal or move for a new trial. The parties also agreed to submit any disputes regarding the language for the final decree to the trial court.

Texas Court Denies Post-Divorce Property Division

Published on: April 12, 2018 | by Kelly McClure

A Texas trial court is limited in revisiting the division of property once a final divorce decree has been issued. A trial court may only order a post-divorce division of property if that property was not divided or awarded to a spouse in the final divorce decree. The court may not alter a division of property that was in the final divorce decree. It may only clarify or enforce the division of property that was addressed in the divorce decree. It is therefore extremely important that all assets are fully addressed in the divorce. If the parties agree upon the property division, they should each be sure the proposed decree accurately reflects their agreement.

The wife in a recent case sought a post-divorce division of property to allow her to receive a share of her husband’s retirement benefits. The parties used a pre-printed divorce decree and were not represented by attorneys in their divorce. Each party approved the form before it was presented and approved by the court.

After the court entered the divorce decree, the wife petitioned for a post-divorce division of property. She asked the trial court to rescind the divorce decree and award her a share of her husband’s military retirement. In the agreed decree, the trial court had awarded the husband all of his employment benefits and individual retirement accounts.

Clarification of an Ambiguous Texas Divorce Decree

Published on: March 28, 2018 | by Kelly McClure

A final unambiguous divorce decree that disposes of all of the marital property should be final. Under Texas divorce law, such a decree generally cannot be re-litigated. However, the trial court can issue additional orders to help implement or clarify a prior order if they do not alter the substantive property division. The court may issue an order of clarification if the decree is ambiguous, as determined by using the rules of contract construction. A contract is ambiguous if its meaning is uncertain or doubtful, or if it is reasonably subject to more than one meaning. The court will consider the contract as a whole in light of the circumstances surrounding its formation, including parol evidence and the conduct of the parties.

In a recent case, a wife challenged an order clarifying the division of property. The parties had signed a mediated settlement agreement. The settlement included improved property that was described in two ways, a map in Exhibit A and a reference to the metes and bounds descriptions with separate exhibits describing each party’s share.

The parties agreed the husband would be awarded 26 additional acres because the improvements on the wife’s share were of a greater value. The trial court granted the husband’s motion for clarification of the division of this property, finding the decree was ambiguous. The clarification stated the map controlled, rather than the metes and bounds descriptions. The court also entered findings of fact and conclusions of law supporting the order.

Evidence of Adultery in Texas Divorce

Published on: March 28, 2018 | by McClure Law Group

A Texas divorce may be granted in favor of one spouse if the other committed adultery. Adultery occurs when one spouse has voluntary sexual intercourse with someone other than their spouse. Adultery may occur after separation. Suggestion and innuendo are insufficient to support a finding of adultery, but the finding can be based on circumstantial evidence. One recent case addressed sufficiency of evidence for a finding of adultery.

The couple married in 1996 in India and had a daughter in the following year. The husband moved to the U.S. in 2003, and his wife and daughter followed in 2004. In 2006, however, the wife and daughter moved back to India. The wife testified that she had not stayed in India voluntarily, but she had to remain because her husband canceled her plane ticket and her visa. The husband agreed to help the daughter come back to the U.S. for college in 2013, and she insisted her mother join her.

The husband filed for divorce in 2015. The trial court granted the divorce on the ground of adultery. The wife appealed both the finding of adultery and the property division. The appeals court had to determine whether the trial court abused its discretion by making a decision that was not supported by sufficient legal or factual evidence.