separate property

Texas Appeals Court Husband Did Not Overcome Community Presumption in Divorce

Published on: July 14, 2024 | by Kelly McClure

Community property is the property acquired by other spouse during the marriage, except separate property. Tex. Fam. Code § 3.002. Separate property is generally that property the spouse owned or claimed prior to the marriage, property acquired by gift, devise, or descent during the marriage, and personal injury recoveries with the exception of recovery for lost earning capacity during the marriage. There is a presumption that property possessed by either spouse during or on dissolution is community property. This presumption can only be rebutted in a Texas divorce by clear and convincing evidence. Tex. Fam. Code § 3.003. Separate property remains separate as long as the community presumption is overcome by tracing the assets back to separate property. Mischaracterizing property and awarding a spouse’s separate property to the other spouse constitutes an abuse of discretion and reversible error by a trial court in a divorce. A husband recently appealed the property division in his divorce, arguing the trial court had mischaracterized some of his separate property as community property.

Property Division

The parties had been married about nine years when the wife filed for divorce. In his counterpetition, the husband asked the court to confirm certain property was his separate property. The trial was focused on the property division, included two houses and an individualized retirement account (“IRA”). The trial court awarded one house to each party and ordered that the spouse awarded each house was responsible for the balance of that house’s mortgage. The court also ordered the IRA funds be split equally. The trial court confirmed certain home furnishings were the wife’s separate property and a sword stand and orange sofa were the husband’s separate property.

Texas Court Rejects Wife’s Argument Husband Sold Commercial Goodwill

Published on: July 7, 2024 | by Francesca Blackard

The court must divide marital property in a just and right manner in a Texas divorce. In some cases, the parties only have tangible or clearly identifiable assets such as real estate and back accounts. In other cases, however, there may be more abstract assets involved. A former wife recently challenged a property division, arguing the court had not properly divided the assets in light of the husband’s sale of commercial goodwill.

The Husband’s Agreement

The parties got married in 1998. The husband worked as a financial advisor starting in the early 2000s. He entered into a “Non-Compete Representative Agreement” with a financial services company in late 2014. The agreement stated he would solicit security purchases as an independent contractor of the company and be compensated on a commission basis. He earned 35% for business written after June 1, 2014, and 52% for business written before April 1, 2014. He could increase his earning to 64% for business written before April if the “net GDC” was greater than $700,001. The agreement also provided that the husband could only continue business with the clients listed in Exhibit B after the agreement was terminated, but no Exhibit B was generated.

The divorce decree was signed at the end of February 2023. The court found the right to receive a greater commission for business written before April 1, 2014 was not a material asset to be divided but was income earned for services and constituted the husband’s “future separate property.” The court also found no commercial good will was transferred to the company because of the husband’s employment with the company or the agreement.

Agreement Regarding Real Property During Texas Divorce

Published on: April 14, 2024 | by Francesca Blackard

Parties to a Texas divorce may enter into an “agreement incident to divorce” regarding property division, liabilities, and spousal maintenance. If the court finds the agreement’s terms are just and right, they become binding and the court may set forth the agreement or incorporate it by reference in the final divorce decree. Tex. Fam. Code Ann. § 7.006. A former husband recently appealed a postdivorce property division order that found the marital home was the wife’s separate property, based on an agreement between the parties.

According to the appeals court’s opinion, the agreement signed by the parties during the divorce proceedings stated that the marital home was community property, but that the parties agreed the wife would become its owner and assume the mortgage. It further stated the husband granted, conveyed, and gave his interest in the property to the wife and agreed to executed any documents needed to effectuate and document the conveyance. The husband moved out.

The final divorce decree did not address the home’s ownership. The husband subsequently petitioned for postdivorce property division. The trial court found the home was the wife’s separate property. The husband requested findings of fact and conclusions of law. The findings identified the home as the wife’s separate property. The husband asked for additional findings and conclusions, but the trial court did not file any additional or amended findings. He appealed.

Texas Appeals Court Reverses Restitution and Reconstitution of Community Estate

Published on: April 7, 2024 | by Francesca Blackard

A party to a Texas divorce is entitled to reimbursement to the marital estate when community time, labor, or skills are used to benefit the other party’s separate estate beyond what is needed for maintenance of the separate property. The trial court has broad discretion to apply equitable principles. A former wife recently challenged a divorce decree that granted her former husband’s requests for reimbursement and reconstitution of the community estate.

According to the appeals court’s opinion, the husband requested a disproportionate share of the community property and reimbursement to both the community estate and his separate estate. He argued the wife’s separate estate had benefited from both the community and his separate estate. He also alleged the wife conspired with her daughter “to accomplish an unlawful purpose and/or to accomplish a lawful purpose by unlawful means” to dispose of the proceeds from the sale of a house. He sought actual and exemplary damages as well as attorney’s fees.

The wife also requested a disproportionate share of the community estate. She argued the civil conspiracy claim was barred by both the statute of limitations and the statute of frauds. She also argued that the parties freely granted their interest in the property to her daughter and that the husband had agreed to and ratified her actions.

Texas Appeals Court Rejects Challenge to Jury Charge in Divorce Case

Published on: February 14, 2024 | by Kelly McClure

In a jury trial, the court must submit to the jury the instructions and definitions needed for it to render a verdict. The court cannot comment directly on the weight of the evidence, but an incidental comment on the weight of the evidence may be acceptable. Tex. R. Civ. P. 277. A husband recently appealed his divorce decree, arguing the trial court erred in failing to give a requested jury instruction and improperly commenting on the weight of the evidence.

The Trial

According to the appeals court, the husband petitioned for divorce in August 2019, seeking a disproportionate share of the marital estate and alleging the wife committed fraud on the marriage. He asked the court to confirm the marital residence was part separate property and set aside a 2019 gift warranty deed conveying it to the wife. He alleged the deed was “done by mistake, undue influence, and under duress.”

The wife disputed the husband’s claims of mistake or fraud. She also sought a disproportionate share of the property and requested exclusive possession and use of the residence.

Texas Appeals Court Concludes Stock Issued by Husband’s Employer Was Community Property

Published on: September 19, 2023 | by Kelly McClure

There is a presumption that property possessed by a spouse during or on Texas marital dissolution is community property. A party claiming separate property must prove its separate character by clear and convincing evidence. Tex. Fam. Code § 3.003. In a recent case a wife appealed the trial court’s characterization of stock shares granted to the husband by his employer.

Stock Shares

According to the appeals court’s opinion, the parties got married in December 2006. The husband started a new job in February 2015 and the next year received a million shares of the company’s stock. The husband stated he had entered into an agreement with the company when he received the stock, but could not find it and could not get a copy from the company. The stock certificates did not indicate why they were issued.

The husband’s employment contract provided that he would receive an annual salary of $100,000. Additionally, he would receive a signing fee, an additional payment upon the next fundraising event, and an annual payment for four years, as compensation for “assets, access to ‘[husband’s] IP,’ and inventory” the husband provided pursuant to the employment agreement. The company also agreed to take on certain debts and liabilities the husband owed. The contract indicated the husband would receive “a total compensation of over $750,000” for the use of the husband’s assets and intellectual property, without referencing the stock shares.

Characterization of Personal Injury Recovery in Texas Divorce

Published on: September 4, 2023 | by Francesca Blackard

The characterization of funds received for personal injuries can be a complex issue in a Texas divorce. Texas family law presumes that property possessed by a spouse during or on dissolution of the marriage is community property. When a spouse claims certain property is separate, that spouse must prove by clear and convincing evidence that the property is separate. Tex. Fam. Code § 3.003. Pursuant to Tex. Fam. Code 3.001, recovery for personal injuries sustained during the marriage is separate property. There is an exception, however, for recovery for lost earning capacity during the marriage. Because a spouse claiming separate property has the burden of proof, that spouse must show by clear and convincing evidence what part of a personal injury settlement is separate property. Recently, a husband appealed the trial court’s ruling which characterized his personal injury recovery as community property.

Personal Injury Settlement

According to the appeals court, the husband and wife married in 1994 and lived separately at various times during the marriage. In December 2014, husband was injured as the result of an automobile accident in the scope of his employment. The parties were separated when the accident occurred, but subsequently reconciled.

The husband settled for the other driver’s policy limits of $30,000. He also received net proceeds of $710,724.25 from a settlement with his employer’s under-insured motorist coverage. Thereafter, his attorneys transferred those funds into the parties’ joint checking account on October 8, 2019. The parties then separated that month and the wife filed a divorce petition on November 1.

Legal Description of Property Controls Over Address in Texas Husband’s Quitclaim Deed to Wife

Published on: June 21, 2023 | by Kate Mataya

When one spouse transfers property to the other spouse by deed, there is a rebuttable presumption the property was gifted to the other spouse as separate property. A deed must contain a sufficient description of the property. In some cases, there may be mistakes or conflicting information in the deed. When a court interprets a deed, it must determine the parties’ intent as expressed in the deed. A wife recently challenged a court’s interpretation of a quitclaim deed and the resulting characterization of the property based on a deed that stated the address for one tract of land but the legal description of another.

The husband bought a house and 23 acres and paid off the mortgage before the marriage. He also sold two of those acres and a mobile home before the marriage. The parties lived in the house on the 21-acre lot after the marriage. They subsequently bought back the two-acre tract and the mobile home.

Quitclaim Deed

Before he petitioned for divorce, the husband signed a quitclaim deed that stated the address of the 21-acre tract, but the legal description of the two-acre tract. The quitclaim deed described the property as 2 acres and identified the make, model, and serial number of the mobile home. The wife asked the court to characterize the 21 acres and house as her separate property based on the quitclaim deed. She argued the deed conveyed the house and 21 acres to her, but the husband contended that it referred to the two-acre tract and mobile home.

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.”

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.