Property characterization can be a significant area of contention in Texas divorces, particularly in high net worth divorces or those in which one party entered the marriage with significantly more assets.  Texas law presumes that property possessed by either spouse during or on dissolution is community property.  That presumption may be rebutted by clear and convincing evidence the property is separate. Tex. Fam. Code § 3.003. Property conveyed by one spouse to the other is generally presumed to be a gift.  Clear and convincing evidence the conveying spouse did not intend to gift the property is needed to rebut the gift presumption.  A former husband recently challenged characterization of the marital residence as the wife’s separate property despite execution of a general warranty deed granting him an undivided one-half interest.

The parties got married in 2001 and the wife petitioned for divorce in 2021. The trial court found the marital home was the wife’s separate property.  According to the appeals court’s opinion, she bought it two years before the marriage and refinanced it in 2003.  She also signed a general warranty deed that granted the husband an undivided half interest. The court found the wife did not intend to gift the property to the husband and provided an alternate reason for executing the warranty deed.  The court also found refinancing had not changed the property’s character.  The trial court awarded the wife conditional appellate attorney’s fees if the husband appealed to the Court of Appeals or the Supreme Court of Texas and the wife “substantially prevail[ed].]”

The husband appealed the home’s characterization and the conditional appellate attorney’s fees award.

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A Texas property division must be “just and right,” but that does not necessarily mean equal. A court may consider a party’s fault in the division when determining how to divide the property, but it may not use the property division to punish the at-fault spouse.  A former husband recently challenged his divorce decree, arguing in part that the court abused its discretion by not considering the wife’s adultery in its property division.

According to the appeals court, both parties were from India, but the husband was working in Texas prior to the marriage.  The parties got married in India in 2004 and wife moved to Texas with the husband.  They had two children together.

The husband petitioned for divorce on the grounds of adultery in October 2018. He asked the court to award him the marital residence.  In her counterpetition, the wife alleged the husband had committed acts of cruelty. Both parties alleged fraud on the community by the other spouse.

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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.

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Texas has adopted the Uniform Child Custody Jurisdiction and Enforcement Act (“UCCJEA”), which identifies what state has jurisdiction over custody matters. The UCCJEA generally prioritizes the child’s home state for jurisdiction.   The child’s home state is where they have lived with a parent for the six months before the custody proceeding commenced, or if they are less than six months old, where they have lived with a parent since birth.

For a Texas court to have jurisdiction to make an initial child custody determination, Texas must be the child’s home state on the date the proceeding commenced or must have been the child’s home state within six months before the proceeding commenced if the child is absent from Texas but a parent or person acting as a parent still lives in Texas.  Tex. Fam. Code § 152.201(a)(1). Texas may also have jurisdiction if another state court does not have jurisdiction or if child’s home state court declined jurisdiction because Texas was a more appropriate forum and the child and the parents, or the child and at least one parent or on person acting as a parent, have a significant connection with Texas and there is substantial evidence in Texas regarding the child. Tex. Fam. Code § 152.201(a)(2). A Texas court may also have jurisdiction if all courts having jurisdiction on the grounds above have declined to exercise it because a Texas court is a more appropriate forum. Tex. Fam. Code § 152.201(a)(3). Furthermore, Texas may have jurisdiction when no other court or any state would have jurisdiction based on the above criteria.  Tex. Fam. Code § 152.201(a)(4).

A mother recently challenged a Texas court’s jurisdiction over her child’s custody.  According to the appeals court’s opinion, the parties separated while the mother was pregnant and she moved to Chicago before the child was born.   The mother filed for divorce in Illinois and the father filed for divorce in Texas.  The mother’s petition did not include an issue related to the custody of the unborn child, but the father’s petition did.  The child was born in in Illinois after both petitions had been filed.

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Characterization and valuation of property can be heavily contested issues in Texas divorces, especially in cases involving a high net worth or businesses.  A wife recently challenged the court’s characterization of certain property and property division.

The husband petitioned for divorce just a year and eight months after the marriage.  The court’s judgment confirmed certain property as his separate property and divided the community property. The court awarded specific items to each party, and granted a judgment for half the value to the other party, resulting in a generally equal division of the community property. The court also divided cash and bank accounts equally.

The court awarded the wife an equalization judgment of $232,878.85 and the husband an equalization judgment of $56,300. The court also awarded the husband a judgment of $80,000 for his separate property that the court found the wife had converted.

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Courts may modify a Texas custody order if doing so is in the best interest of the children and there has been a material and substantial change in circumstances of the child or a conservator since the order was rendered.  Tex. Fam. Code § 156.101. In determining the children’s best interest, courts consider the factors set forth in Holley v. Adams, but the court is not limited to those factors and all of the Holley factors may not apply in each case.

Courts may also place geographic restrictions on the child’s primary residence to ensure children are able to have frequent and continuing contact with their parents. To determine the children’s best interest when one parent wants to relocate, court consider a number of factors set forth in Lenz v. Lenz.  A father recently appealed the denial of his modification petition seeking a more limited geographic restriction.

Modification Proceeding

The father petitioned for modification of the parent-child relationship to reduce the statewide geographic restriction to Midland County.  Alternatively, he asked the court to modify the relationship as it deemed in the children’s best interest.  He also asked for increased travel expenses because the mother had relocated.  In her counterpetition, the mother sought to be named the sole managing conservator with the father being named possessory conservator with supervised visitation.  They both alleged a material and substantial change in circumstances since the divorce decree was signed and entered.

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Generally, the date of a marriage is certain, but that is often not the case with an informal marriage. The date of marriage affects the characterization of property and therefore a dispute over the date of marriage can significantly impact the property division. A former husband recently appealed a divorce decree, arguing in part that the trial court erred in finding the parties were married on or about January 1, 2012, which was before their ceremonial wedding.

According to the appeals court, the parties had a ceremonial wedding in January 2013.  The husband petitioned for divorce in late 2020, alleging they had “married on or about January 31, 2013.” In the wife’s counterpetition, she alleged they “married on or about January 1, 2012.”

The trial focused on the marital residence, some property in Mexico, and the husband’s trucking company.

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A court may grant a Texas annulment if the other party induced the petitioner into the marriage by fraud, duress or force and the petitioner did not voluntarily cohabit with the other party after learning about the fraud or being released from the force or duress.  Tex. Fam. Code § 6.107.  A former husband recently challenged an annulment, arguing there was insufficient evidence to support a finding of fraudulent inducement.

According to the appeals court, when the parties began dating in 2021, the husband was authorized to work in the U.S. and had a pending asylum case. The wife was a U.S. citizen.

They signed a premarital agreement and got married in a civil ceremony in October 2021.  They talked about having a traditional ceremony in India with the husband’s family, but the husband would need a green card to be able to return to the U.S. if they went to India.

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The court in a Texas divorce case may appoint a receiver to protect and preserve the property of the parties. TEX. FAM. CODE § 6.502(a)(5).  The receiver only has the powers authorized by the court. The receiver’s role is to receive and preserve the property for all interested parties’ benefit.  The receiver must exercise ordinary care in performing their duties. Receivers may be appropriate in high net worth divorces with complex assets or where there are concerns a party may hide or misuse assets.  In a recent case, a former husband appealed a trial court order terminating receivership, discharging the receiver, and granting turnover relief to the wife.

Appointment of Receiver

The husband petitioned for divorce in 2009.  The court appointed a receiver in 2011 and ordered that he was to take necessary actions to secure payments and manage, control and dispose of the husband’s property. He was also authorized to pay the husband’s living expenses, legal fees and expenses, and court-ordered obligations.

The receiver was subsequently ordered to take possession and control of certain of the husband’s assets, including property in his bankruptcy estate and any exempt retirement accounts. The court instructed the receiver to pay the husband’s living expenses of $5,000 per month, obligations to the wife and minor children, court-ordered obligations to third parties, and up to $1,500 in unexpected expenses of either party, but not more than $6,000 in any four-month period without a court order.

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Generally, either party in a Texas divorce is entitled to demand a jury trial pursuant to Tex. Fam. Code Ann. § 6.703.  A party seeking a jury trial must file a timely request.  If the jury trial is available to a party as a matter of right, the court generally must grant the request unless doing so would injure the other party, disrupt the docket, or impede the court’s business.  Halsell v. Dehoyos.  A party in a civil case may waive the right to a jury trial in some circumstances, including agreeing to a bench trial, not timely requesting a jury trial or paying the fee, not appearing for trial, or not objecting to a bench trial.  In re Marriage of Harrison. In a recent case, a husband appealed a divorce decree after the trial court held a bench trial following his timely request for a jury trial.

According to the appeals court’s opinion, the parties married in 1986 and the wife petitioned for divorce in June 2020.  They accused each other of fraud against the community and cruel treatment. Each sought a disproportionate share of the marital estate and requested reimbursement to the community estate.

The trial court appointed a receiver to take possession and control of the assets, including rental properties and a business.

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