Articles Posted in separate property

iStock-543681178-300x200A final and unambiguous Texas divorce decree that disposes of all of the marital property generally may not be relitigated.  The Texas Family Code allows the trial court to keep continuing subject matter jurisdiction to clarify and enforce the property division, but it cannot change or modify it.  In a recent case, a wife challenged an order purporting to clarify the division of the husband’s military retirement nearly 25 years after the divorce.

The parties divorced in 1996.  In the decree, the trial court found they were married for at least 18 years and 11 months and the husband had served at least 13 years and 9 months “of creditable service toward retirement.”

Trial Court Awards Wife 50% of Husband’s Military Retirement

The trial court awarded the wife “[a]ll right, title, and interest in and to fifty (50) percent of [the husband’s military] disposable retired or retainer pay” and 50% of all increases in the disposable retirement or retainer pay. The husband served for several more years.

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iStock-1214358087-300x169Although testimony can be important evidence in a Texas divorce, documentary evidence is needed for some claims.  A wife recently challenged a number of issues in her divorce based on insufficiency of evidence.

According to the appeals court’s opinion, the parties acquired several rental properties during their marriage.  The husband petitioned for divorce in July 2020.  The trial was originally scheduled for October 7, 2020, but the wife moved for a continuance and asked for mediation.

The trial date was reset for April 28, 2021, but the wife moved for another continuance the day before.  The trial was rescheduled for May 6, 2021, and she again requested a continuance. The trial court denied the motion.

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does-adultery-affect-alimony-in-idaho-1080x600-1-300x167Property possessed by a spouse during or upon dissolution of the marriage is presumed to be community property.  Clear and convincing evidence that the property is separate is required to rebut that presumption.

Wife Asserts Gift from Parties’ Son

A husband recently appealed a divorce decree, arguing the trial court erred in finding all accounts in the wife’s name in Bangladesh banks were the wife’s separate property.  The wife claimed the money in those accounts had been gifted to her by their son.  Property acquired by gift or inheritance is generally separate property.  TEX. FAM. CODE ANN. § 3.001.

According to the appeals court’s opinion, the parties’ son testified he had sent his mother $500 a month through an automatic deposit into her bank account since 2006.  He said the money was a gift only to his mother.  The wife testified she had transferred some of those funds into her accounts in Bangladesh.

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iStock-178756342-300x199A spouse in a Texas divorce may have a reimbursement claim if they use their own separate property to fund improvements to the other spouse’s separate property.  Likewise, if community funds are used for the benefit of a spouse’s property, the spouse may be ordered to reimburse the community.  The party seeking reimbursement must plead and prove the claim, including showing that the funds used were their separate property. Courts must resolve claims for reimbursement using principles of equity.

A husband recently challenged a trial court’s denial of his reimbursement claims.  According to the appeals court’s opinion, both parties had significant separate property when they married in 2010.  The husband owned one home and the wife owned two.  They bought a new house 2014.  The husband sold his home and used $141,000 of the proceeds for the new house.  The wife sold one of her homes and used $150,000 from that sale on the new home.

Testimony Regarding Husband’s Reimbursement Claim

The husband also paid about $70,000 for a pool at the new house.  He claimed the funds were his separate property, but the wife testified she thought he had used community funds.

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property-division-300x110The court in a Texas divorce must make a just and right division of the parties’ estate.  This does not necessarily require the court to award  the parties equal shares of the property.  Property acquired during a marriage is generally community property, but property acquired before the marriage or by gift, devise, or descent is separate property. A party claiming separate property must show that it is separate by clear and convincing evidence.  A husband recently challenged a court’s characterization of certain property as the wife’s separate property.

The parties got married in 1997 and the husband filed for divorce in 2019.  Each party sought a disproportionate share of the marital estate.

Wife Asserts Separate-Property Claim

According to the appeals court’s opinion, a significant issue in the divorce was property purchased by the wife in 1997 after the marriage.  She leased the building in 1990 and renewed the lease in 1995. After the marriage, she bought it.  She testified the written lease she signed in 1995 gave her an option to purchase, but she had lost the document.

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iStock-483613578-300x204Some people may assume that property held in only one spouse’s name is that spouse’s separate property, but that is not necessarily the case.  In Texas, property’s character is determined based on when and how it is acquired.  Additionally, in a Texas divorce, property acquired during the marriage is presumed to be community property.

In a recent case, a husband challenged a court’s characterization of certain property held in his name as community property and awarding it to the wife.

According to the appeals court’s opinion, the parties acquired multiple pieces of real estate, some in both their names and some in only the name of the husband, while they were married. When they divorced, the three properties that were the subject of the appeal, referred to by the court as the “Three Properties,” were held by the husband, but the wife alleged they were the community property.

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iStock-1125625723-300x200When parties to a Texas divorce agree to a property division, the final judgment based on the agreement must strictly comply with it.  The trial court cannot add, change, or leave out material terms.  A final judgment based on a property division agreement  must be set aside if it is not in strict compliance with the agreement, unless the discrepancy is a clerical error.  An appeals court may modify a judgment to correct a clerical error.  A former husband recently challenged the property division in his divorce due to a number of alleged discrepancies.

Husband and Wife Submitted Proposed Property Division

According to the appeals court’s opinion, the parties agreed to a proposed property division, identified as “Exhibit A.” The wife testified the division was fair and just. She agreed to split funds in the husband’s IRA equally after he was credited $90,000 as separate property and to split the funds in his “Edge” and “Smart” retirement plans equally.

The husband initially disagreed with the property division in Exhibit A, but later asked the court to approve it. The trial court admitted the document into evidence, asked the parties to draft and sign an agreed final decree.

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Divorce-property-fraud-300x273Property in the possession of either spouse at the time of dissolution of marriage is presumed to be community property under Texas family law.  A spouse may rebut this presumption by tracing and clearly identifying the separate property. That spouse must present evidence of the time and means of acquisition of the property. The property remains separate if the spouse can trace the assets back to separate property.  Testimony is generally not enough to overcome the community-property presumption. The spouse must have clear and convincing evidence the property is separate. Tex. Fam. Code § 3.003.

An appeals court recently considered tort claims within a divorce case arising from the purchase of a business. When the parties married in 2014, the wife owned a 49% interest in her optometry practice.  She offered to buy the remaining interest in 2015.  Her husband and another attorney in his firm helped negotiate the deal.

Wife Brings Tort Claims in Divorce Suit

The wife petitioned for divorce in September 2018.  She added claims of fraud, theft, and breach of fiduciary duty to her petition, arguing husband failed to structure that purchase as separate property and allowed her separate property to be converted to community property.

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iStock-1132277483-300x200Property division in a Texas divorce is intended to be final, and a court generally is not allowed to change the division set out in the final decree.  Tex. Fam. Code Ann. § 9.007. The court may, however, issue orders to clarify or enforce the property division set out or incorporated by reference in the decree. Issues related to retirement benefits are often addressed in a Qualified Domestic Relations Order (“QDRO”) for private employees or a Court Order Acceptable for Processing (“COAP”) for employees of the federal government, which may be incorporated into the decree.  Courts may therefore correct or clarify a QDRO or COAP to achieve the property division set out in the decree.

An ex-husband recently challenged an order allowing his ex-wife half of his entire monthly federal pension.  The husband started working for the federal government in 1989. The parties got married in 2000 and divorced in 2011.

Language in the decree seemed to award the wife half of the community share of the husband’s federal government pension benefits, but another provision seemed to award her half of all of those benefits.  The decree stated the “community portion” of the pension benefits would be identified in a COAP. The court rendered the COAP in January 2012, but it indicated the wife was awarded 50% of all of the federal pension benefits.

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2018_10_agreement-300x165In Texas, separate property can be converted to community property by a written agreement signed by both spouses that identifies the property to be convert and specified it is being converted to community property. Tex. Fam. Code § 4.203.  In a recent case, a former husband challenged the property division in his divorce decree, arguing certain assets had been improperly characterized as the wife’s separate property.

The wife was beneficiary of three irrevocable trusts set up by her grandparents.  The income from the trusts was to be distributed to the wife at least annually starting when she turned 21.  The trustee was also authorized to distribute principal for the wife’s care, comfort, support, and education if the trustee deemed it necessary. When she turned 32, the trustee had the discretion to distribute the balance.  After the wife’s thirty-second birthday, which occurred during the marriage, the trustee terminated the trusts and put the accounts in her name.  They were worth about $2.3 million at the time.

The parties hired an estate-planning attorney.  They both signed an engagement letter, stating they told the attorney they considered the current assets, specifically including the funds inherited by the wife, to be community property. The trust agreement stated that the trustors contemplated that all assets that would be transferred to the trust would be community property. However, it also included a provision allowing either party to modify, revoke, or terminate the agreement with respect to any of their own separate property held in the trust. They subsequently transferred the assets from the grandparents’ trusts to the new trust account.

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