Articles Posted in Property Rights

What is a Partition or Exchange Agreement?

In Texas, spouses can enter into agreements (often referred to as “partition or exchange agreements“) during marriage, partitioning community property between themselves. A partition or exchange agreement must satisfy several requirements to be valid and enforceable, including being signed by both spouses. However, when the stakes are high, some unscrupulous spouses may trick their unknowing partner into signing the partition or exchange agreement under false pretenses or, even worse, forge their partner’s signature. Recently, one husband did both.

Ninth District of Texas Court of Appeals

Long term relationships that involve joint business dealings prior to marriage can lead to complicated divorces.  In a recent case, a wife challenged a trial court’s finding that she and her husband had formed a business partnership in 1995 and that properties purchased in her name belonged to the partnership.

The wife filed for divorce, alleging the parties married in 2009.  The husband alleged the parties had been informally married since 1984.  He also alleged, in the alternative, that they had entered into a farming and ranching business partnership in 1995.

The parties began a romantic relationship in 1984.  In 1995, the wife bought a property in her name and made all related payments. The husband moved into the property to work on the house.  The wife also worked on the house on weekends.

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In Texas divorce cases, property is presumed to be community property if either spouse possesses it during the marriage or at the time of the divorce.  Tex. Fam. Code Ann. § 3.003.  To rebut the presumption, a spouse must trace the property and clearly identify it as separate by clear and convincing evidence.  How a property is characterized is generally determined based on the character it has at inception, or when the party’s title has vested.

In a recent case, a husband challenged the trial court’s characterization of property received as a gift from the wife’s parents.  When he petitioned for divorce, the husband requested a disproportionate share of the marital estate, due in part to “fault in the breakup…”  He also asked for reimbursement to his separate estate for funds he had expended for the community estate’s benefit.

He testified that the property where the couple lived had been gifted to them by the wife’s parents.  The “Gift Certification” signed by the wife’s parents stated they “intend to give to [husband and wife] a gift . . .” of the lot.  It also listed the relationship as “son in law to be and daughter.” Both the husband and wife signed in acknowledgement of receiving the gift.

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As a result of his illustrious career, Dr. Dre’s net worth currently sits at a whopping $820 million – but maybe not for long. After 24 years, Dr. Dre’s wife, Nicole Young, is filing for divorce from the producer, rapper, and hip-hop icon. Reports indicate that the couple did not execute a premarital agreement prior to their 1996 marriage, which opens up Dr. Dre to significant financial exposure. In the absence of a premarital agreement, California – a community property state much like Texas – provides that property accumulated during marriage is owned by the community estate. Put simply, all of Dr. Dre’s income during the marriage, from his royalties as a solo rapper to his profits from Beats by Dre, is up for grabs. This means that Dr. Dre could see his hard-earned fortune be split in half right before his eyes in the coming months. Continue Reading ›

Whether a celebrity or not, we all worry about many of the same core issues when facing a divorce – How do I protect my stuff (money, investments, real property, personal property) and how do I protect the kids.

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Property in a Texas divorce must be divided in a “just and right” manner.  The trial court has broad discretion in dividing the estate.  To successfully challenge a property division, a party must show that it was so unjust as to constitute an abuse of the trial court’s discretion.

A husband recently challenged the property division in his divorce. The husband appealed the trial court’s ruling, arguing it erred in awarding the wife what he claimed was “75% of the Community Estate.” He argued that the court had awarded her 75% of the community estate by awarding her the home the couple had lived in for most of their marriage and the surrounding property.  He also argued the court had improperly characterized real estate owned by his son as community property. Additionally, he argued the court had not considered that community work and assets had been used to enhance the wife’s separate property, that the wife damaged the business awarded to him, that she removed funds from community bank accounts, and committed adultery and domestic violence.


The appeals court first addressed the issue of fault.  The trial court had granted a no-fault divorce. The appeals court noted that the alleged domestic violence and adultery had happened several years before the separation, and the trial court could have reasonably found they were not relevant to the property division.

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Property possessed by either party at the time of a Texas divorce is presumed to be community property.  To show that property was instead separate, the presumption must be rebutted by clear and convincing evidence.  If the assets were not maintained separately from community assets, they must be traced back to separate property by showing the origin of the property.  Income earned during the marriage is also community property.

A wife recently challenged a court’s finding that a down payment made from her savings account was made with community funds.  After six years of marriage, the parties filed for divorce.  In the wife’s counter petition, she sought reimbursement to her separate estate for assets she alleged were spent for the benefit of the community estate.

At the hearing, the husband sought half the equity in the marital home and community funds he alleged the wife had deposited into her checking account and given to her adult child. The parties agreed on the value of the home and the amount of the down payment.  The husband admitted the down payment had come from the wife’s savings account, but argued that it came from community property funds that had been commingled into the wife’s savings account.  He testified that she deposited her paychecks into her checking account and transferred funds to the savings account.   He testified the savings account had $162,168.61 at the time of the marriage.  The bank records showed $282,847.69 was in the account before the withdrawal for the down payment.   The husband also testified he had given his wife cash to pay the utilities and half of the mortgage payment.

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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.

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In a recent Texas property division case, an ex-husband appealed a final divorce decree on the basis of five issues. The case arose when a couple married in 1992. The wife filed for divorce in 2013, claiming the husband had cheated on her. She asked for a disproportionate share of the marital estate due to fault for the marriage breaking up, as well as a disparity in the spouses’ earning power and their ability to support themselves.

The husband filed a general denial and counterclaim and also asked for a disproportionate share of the marital estate. The lower court granted the divorce on the ground of adultery. The husband was awarded as separate property an undivided interest in a funeral home business, the land on which it was located, and two adjacent tracts. The wife was also awarded an undivided interest in the funeral home, the land, and the adjacent land. The lower court awarded her the marital home and an insurance check as well. The husband asked for findings of fact and conclusions of law. None were filed, and he didn’t file a notice of past due findings.

He appealed. The appellate court explained that during a divorce, the court must order a division of the estate in a way that is just and right with due respect to each party’s rights under Texas Family Code section 7.001. The appellate court found it should reverse a property division ruling only if the mistake materially affected the lower court’s just and right division of property.

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In a recent Texas property division decision, a woman appealed from a final divorce decree. A couple had been married about 30 years when the husband petitioned for divorce. The wife was incarcerated. At a divorce hearing, she appeared without a lawyer and by telephone because of her incarceration. The lower court gave her 15 days to file exhibits and permitted the husband another 15 days to object. The wife sent copies of her exhibits and also sent a settlement offer to the husband’s attorney. There were no objections to the copy she filed with the court, or any of her exhibits submitted to the court.

Her divorce was granted, and the community real property and other assets were ordered to be sold with the proceeds split between the husband and the wife equally. The wife appealed, complaining of mistakes about how the property was divided.

The appellate court explained that the court can divide the community estate during a divorce under Texas Family Code section 7.001. It cannot divide separate property. The appellate court that reviews property distribution is supposed to look at whether there was enough evidence upon which the lower court could exercise discretion, and whether the lower court erred in applying its discretion.

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