Reimbursement is an equitable right arises in a Texas divorce when the property of one marital estate is used to the benefit of another marital estate, resulting in unjust enrichment to the benefited estate if not repaid. Tex. Fam. Code § 3.402. A spouse may pursue a reimbursement claim, for example, if community property funds are used to pay the debt for or make improvements to the other spouse’s separate property. The court must apply equitable principles to determine if it will recognize a claim for reimbursement, considering the relative circumstances of both parties and, if the court determines the reimbursement claim is appropriate, it must order a just and right division of the claim for reimbursement, with regard for the rights of the parties and children. Tex. Fam. Code § 7.007. The spouse seeking reimbursement has the burden of proving that the property of one marital estate was used by one or both spouses to benefit another marital estate, the value of that benefit, and that the benefited estate will be unjustly enriched if reimbursement is not required. Tex. Fam. Code § 3.402(b). The trial court has broad discretion in determining reimbursement claims.
In a recent case, a former husband appealed the divorce decree that did not award him reimbursement. The wife petitioned for divorce in 2022, after nearly 50 years of marriage. In his counterpetition, the husband made a claim for reimbursement, but the court did not award him reimbursement in the final divorce decree.
The Husband’s Appeal
The husband appealed, arguing the trial court did not properly apply the law regarding reimbursement of the community estate. The judge stated, “whatever she took with her [in 2016] the marriage was still ongoing . . . . I cannot go back in time and fix that.” The husband argued the court misstated the law.
As the party seeking reimbursement, the husband had the burden of proving he was entitled to it. He testified that when the parties separated, the wife sold two pieces of community property and withdrew funds from two community property bank accounts. He claimed he did not receive any of the funds from the sales or the accounts but did not present evidence that those funds had benefited the wife’s separate estate. The appeals court also pointed out that the wife had allegedly taken these actions during the marriage several years before she petitioned for divorce. A spouse’s living expenses are specifically excluded from being recognized in a claim for reimbursement. Tex. Fam. Code § 3.409(2). Without evidence of how the funds were used, the appeals court determined there was insufficient evidence for a reimbursement claim and found no abuse of discretion in the trial court’s decision not to award reimbursement to the husband.
The appeals court affirmed the trial court’s judgment.
Seek Legal Advice
In this case, the appeals court determined the husband had not presented sufficient evidence to support his reimbursement claim. He did not show how the funds were used and did not present any evidence showing they were not used for the wife’s living expenses, which seemed particularly significant given the length of time between the alleged sales and withdrawal of the funds and the divorce. If you believe your spouse has used community property to benefit their separate property, a knowledgeable Texas divorce attorney can work with you to identify the evidence to support your case and protect yourself in a high net worth divorce. Set up a consultation with McClure Law Group by calling 214.692.8200.