Property

Texas Court Characterizes Property Conveyed by Husband’s Parents as Community Property

Published on: May 28, 2023 | by Kelly McClure

In a Texas divorce, there is a presumption that property possessed by either party during or on dissolution is community property. Tex. Fam. Code Ann. § 3.003(a). Property’s characterization is determined by inception of its title. In a recent case, a husband challenged a trial court’s characterization of property conveyed by his parents.

Conveyance of the Property

According to the appeals court’s opinion, the husband acquired the property from his parents during the marriage. The deed was labeled a warranty deed. It identified the parents as the grantors and the husband, “A MARRIED PERSON,” as the grantee. It stated consideration of $10 and “other good and valuable consideration.” It also stated the grantor “grants, sells, and conveys to Grantee the property.” A corrected deed was filed in 2015 changing the legal description.

The wife testified the husband’s parents were paid $1,750 for the property from a joint bank account. The husband and his father each testified that just $10 was paid as consideration for the property. Both spouses were listed on the construction loan application for building the home on the property. That application indicated the title would be held “Jointly with Spouse.”

Texas Appeals Court Reverses Spousal Maintenance Award Due to Lack of Evidence of Expenses

Published on: May 21, 2023 | by Francesca Blackard

A Texas divorce case can become more complicated for spouses with a child with complex medical needs. In addition to addressing issues related to custody and decision-making, the divorce may also have to address spousal maintenance for the child’s primary caregiver. In a recent case, a husband appealed an unequal property division and a spousal maintenance award in favor of the wife, who acted as primary caregiver for the children.

According to the appeals court’s opinion, the parties had preterm triplets, one of whom was a “medically fragile child,” “Andy.” The wife stopped working outside the home and became their primary caregiver.

The husband filed for divorce in 2019. The wife subsequently negotiated a job with the non-profit she co-founded.

House Bought Before Marriage Declared Both Parties’ Separate Property in Texas Divorce

Published on: May 21, 2023 | by Kelly McClure

Atlanta-Property-Division-Attorneys-2-300x198 Pursuant to the Inception of Title doctrine, a property’s character is determined when the party acquires their interest in it. This means that property acquired before the marriage will generally be characterized as that spouse’s separate property in a Texas divorce. In a recent case, however, the court determined that a house purchased solely in the name of the husband before the marriage was the separate property of both spouses.

According to the appeals court’s opinion, the parties started dating in late 1999. The wife moved in with the husband and his grandfather in 2003 or 2004. The husband bought a house from the wife’s parents in 2004 as “a single man,” according to the Deed of Trust and Note and both parties moved into it. They deposited their paychecks into a joint account from which the mortgage and property taxes were paid. They got married in July 2005 and lived together in the house until 2020.

Divorce Trial

The wife petitioned for divorce and ultimately requested reimbursement to the community estate. She asked for 50% of the community estate and 50% of the husband’s separate property. She argued the house was both parties’ separate property because they had lived together and both paid for it. The husband argued it should be his separate property.

Characterization of Personal Injury Recovery in Texas Divorce Cases

Published on: May 19, 2023 | by Francesca Blackard

iStock-178756342-300x199 Under Texas family law, property acquired by a spouse during the marriage is community property, unless it meets the requirements of separate property. Pursuant to Tex. Fam. Code § 3.001, personal injury recoveries are the separate property of the injured spouse, but recovery for lost earning capacity is community property. Property possessed by a spouse during or on dissolution is presumed to be community property, so a spouse claiming a personal injury recovery is their separate property must prove by clear and convincing evidence what portion is separate. A wife recently challenged the property division in her Texas divorce after the court concluded monthly payments from a personal injury settlement were the husband’s separate property.

According to the appeals court’s opinion, the wife had primarily been a homemaker during the marriage, but she sometimes worked part-time.

The husband was seriously injured at work in 2006. He was found to be incapacitated and the wife acted as his guardian in the resulting lawsuit. In the personal injury settlement agreement, the wife agreed, on behalf of her husband and herself, to release all claims against the defendants. The defendants’ insurance companies agreed to immediate cash payments and monthly payments for the rest of the husband’s life. The settlement provided that $1,150,000 of the cash payments was for the husband’s benefit and $50,000 would go to the wife. The settlement agreement also stated the monthly payments were for the husband’s benefit. The monthly payments were secured through the purchase of an annuity pursuant to the settlement agreement. The agreement also stated that funds were “damages on account of personal physical injuries or sickness” pursuant to the Internal Revenue Code. It also provided that the husband and wife were responsible for paying their attorney’s fees, court costs and case expenses, and any medical bills and liens.

Texas Appeals Court Upholds Spousal Maintenance and Reimbursement

Published on: May 17, 2023 | by Kelly McClure

iStock-531351317-300x200 Texas spousal maintenance is intended to provide “temporary and rehabilitative” support for a spouse who does not have the ability or assets to support themselves or whose ability to do so has deteriorated while they were engaged in homemaking activities. Courts may award spousal maintenance only in limited circumstances if the parties meet the requirements under the Texas Family Code.

Tex. Fam. Code § 8.053 provides there is a rebuttable presumption that maintenance is not warranted pursuant to Section 8.051(2)(B) unless the spouse exercised diligence in earning sufficient income to provide for their reasonable needs, or in developing the necessary skills to provide for their reasonable needs during separation and while the divorce case is pending. Even if a spouse otherwise qualifies under Section 8.051(2)(B), they must either show that they exercised diligence or rebut the presumption that maintenance is not warranted.

A husband recently challenged a spousal maintenance award in favor of the wife and an order to pay a reimbursement claim to the community estate based on improvements made to his separate property.

Texas Appeals Court Upholds Divorce Decree with No Payment Mechanism or Schedule for Owelty Lien

Published on: May 15, 2023 | by Francesca Blackard

BSgavelx1200-768x432-1-300x169 In dividing property in a Texas divorce, the court must effect a just and right division. If the marital residence is part of the community estate and one party will keep it, the court must address the other spouse’s share of the equity. The court may do this by placing an owelty lien on the property. An owelty lien creates an encumbrance on the property that follows it upon a sale. The lien must be paid before the net proceeds of the sale are distributed to the spouse. In a recent case, a mother challenged a divorce decree that did not include a payment mechanism or schedule for her owelty lien, while the father challenged the specifics of the geographic restriction imposed on the primary residence of the child.

The father asked the trial court to appoint both parents joint managing conservators of their child. He asked neither parent be given the exclusive right to determine the child’s primary residence and that the court impose a geographic restriction. He requested the trial court to divide the estate in a just and right manner. He asked that the mother receive a lien on the marital estate for half of the net equity of the home.

The mother asked for the right to designate the child’s primary residence. She also asked the trial court to award her half the market value of the home.

Marital Home Built on Gifted Lots Retains Separate Property Characterization in Texas Divorce

Published on: May 13, 2023 | by Francesca Blackard

iStock-483613578-300x204 The characterization of property in a Texas divorce is generally determined by the property’s character when the spouse acquired it. Separate property is property a spouse owned before the marriage or acquired during the marriage through gift, devise, or decent. Improvements made to separate property are generally also separate property because they are not divisible from the land. Community property is property acquired by either spouse during the marriage that is not separate property. In a recent case, a wife challenged a court’s characterization of the marital home as community property.

Home Built During Marriage

According to the opinion of the appeals court, the parties got married in 1995. In 2000, the husband’s mother transferred two lots to both of the parties by a gift deed. They built the marital home on those two lots during the marriage. The wife moved out of the home when the parties separated in 2015. The husband had stayed there and paid the household bills and property taxes.

The trial court ordered the home to be sold. It awarded 75% of the net proceeds from the sale of the home to the husband and the other 25% of the net proceeds to the wife.

Texas Appeals Court Upholds Separate Property Characterization

Published on: April 27, 2023 | by Francesca Blackard

2018_10_agreement-300x165 Property possessed by either spouse at the time of a Texas divorce is generally presumed to be community property, but that presumption can be rebutted by clear and convincing evidence. A number of other rules and presumptions may affect the characterization of property during the property division. A husband recently appealed characterization of property purchased by the wife before the marriage as her separate property.

HISTORY OF THE PROPERTY

The wife bought a residential property before her relationship with the husband. After the parties got married, the husband and his children moved in with the wife. Both parties testified they frequently argued about money and finances. When they argued, the wife would say the house was hers.

Texas Appeals Court Affirms Disproportionate Property Division in Divorce

Published on: April 25, 2023 | by Kelly McClure

iStock-483613578-300x204 A court in a Texas divorce must divide the marital estate in a just and right manner. A just and right division does not necessarily mean an equal division. Courts may consider a variety of factors in determining the property division, including fault in the break-up, income disparity, the relative earning capacity of the parties, education, age, physical condition, and financial condition of the parties. A husband recently appealed a disproportionate division of property.

The appeals court’s opinion stated the parties established a common-law marriage in 2015 after living together for 18 years. They separated in 2018 and the wife petitioned for divorce in 2019, claiming insupportability and cruelty. In his counter-petition, the husband also alleged insupportability and cruelty and adultery on the part of the wife. They each requested a disproportionate division of the marital estate.

FINAL HEARING ON PROPERTY DIVISION

They reached a settlement on the issues related to the children, so the final hearing addressed only the property division. The community estate included bank accounts, the husband’s retirement benefits, vehicles, and debt. The parties had also purchased two homes as tenants in common before they were married. They each lived in one of the homes after the separation.

How Do Texas Courts Value a Medical Practice During Divorce Proceedings?

Published on: February 17, 2023 | by Kelly McClure

iStock-932331618-300x200

Valuing a closely-held medical practice during a divorce in Texas requires a complex understanding of the measures of value, methods of valuation, and Texas statutes. Although business valuations do not adhere to precise mathematical processes, general methods, procedures, and principles exist. In Texas, determining the value of medical practice is often a critical and hotly contested aspect of divorce proceedings. Understanding how a court will incorporate the value of medical practice to come to a “just and right” division of property is crucial to securing a favorable outcome in a divorce.

TEXAS ASSETS DURING A DIVORCE

Texas is a community property state, meaning only property created or accrued during the marriage is subject to division during a divorce. Community property may include real estate, businesses, medical practices, cars, money, and retirement accounts. Under the law, courts must make divisions that are “just and right.” It is important to note that “just and right” does not necessarily equate to a 50 percent division.

OWNERSHIP OF MEDICAL PRACTICE AFTER A DIVORCE

Medical practices fall under an important caveat of Texas’ property division laws. The Corporate Practice of Medicine (CPOM) doctrine prohibits non-physicians, entities, or corporations from practicing medicine. Thus, a court cannot divide the ownership of a medical practice to a non-physician spouse; instead, the court can only determine and divide the value of the practice.