Articles Tagged with divorce

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When parties to a Texas divorce case enter into a mediated settlement agreement (“MSA”) that meets the statutory requirements, the MSA is generally binding and the divorce decree must adopt the agreement.  An MSA may not be enforceable, however, if it was procured by fraud or other dishonest means.

A wife recently challenged a divorce decree incorporating  an MSA that she asserted was procured by fraud. A divorce decree was issued in Dubai and both parties appealed.  The wife subsequently petitioned for divorce and to modify the Dubai court orders in Texas. During discovery in the Texas cases, the husband disclosed one bank account.

The parties signed an MSA that gave the wife half of a retirement account in the husband’s name, $94,000 in cash, and the real and personal property and accounts in her own name or possession. The husband received the other half of the retirement account, real property in Florida, and the real and personal property and accounts in his name or possession. The parties also agreed to cease discovery, except as to issues involving the child.

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iStock-545456068-300x184A court may proceed with a Texas divorce case even if a party does not appear for the trial. In some cases, a party who fails to respond to divorce papers or appear at trial may be entitled to a new trial, but they must meet certain requirements.  In a recent case, a husband appealed the denial of a new trial and challenged the property division in a default divorce.

According to the appeals court’s opinion, the parties lived in the husband’s home in Texas after their marriage in Nigeria.  The husband bought a home in New Hampshire and moved there in 2017.  The wife petitioned for divorce in 2018.

The trial court issued a temporary restraining order prohibiting the husband from interfering with the wife’s health insurance, but he informed the insurer they were divorced while the divorce was pending. The wife’s coverage was cancelled.  The wife had to pay $7,500 for medical expenses that the insurer had approved before cancellation. The trial court also prohibited the husband from terminating utility services, but the wife alleged he had them disconnected repeatedly.

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iStock-545456068-300x184A trial court may order a post-divorce division of community property that was not divided or awarded to either spouse in a Texas divorce decree. Tex. Fam. Code § 9.201.  The court may not, however, order a post-divorce division of property that was already divided in the divorce. The legal doctrine of res judicata prevents a party from re-litigating issues such as categorization of assets or improper division in a new case.  Parties must instead address such issues through direct appeals. In a recent case, a wife sought a post-divorce division of certain bonuses the husband received after the divorce.

The parties married in 2014, and the wife petitioned for divorce the next year.  The husband included several bonuses in his asset inventory. He listed a $0 value for the bonuses that would only be payable after the divorce if he remained employed on the designated date. He testified they had no value because they were conditional on future events.

The wife argued the future bonuses were deferred compensation for work performed during the marriage and estimated their value at more than $4 million.

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iStock-1214358087-300x169Texas law presumes that property possessed by a spouse during or on dissolution of the marriage is community property.  Tex. Fam. Code § 3.003.  The presumption can only be rebutted by clear-and-convincing evidence the property is separate. In a recent case, a husband challenged the characterization and distribution of property in his divorce.

The parties got married in 2008 and separated in 2018.  The wife moved into her own apartment and filed for divorce in March 2018.

The wife submitted an inventory and appraisement, a copy of her student-loan activity, and a proposed property division.  The husband also submitted an inventory and appraisement, as well as account statements and receipts.

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iStock-1287431987-300x200When a couple enters into a Texas pre-marital agreement or post-marital agreement, they may include an arbitration provision in the agreement. Arbitration can be a cost-effective way to resolve disputes, but an arbitration decision often cannot be appealed. In a recent case, a wife appealed a final divorce decree confirming an arbitration award, arguing the arbitrator exceeded her authority.

Husband and Wife Enter into Post-Nuptial Agreement During Marriage

During the marriage, the parties signed an agreement to make “what would otherwise be community property instead be separate property.” The agreement included an arbitration provision.

When the agreement was executed, the husband was president of a company and the wife was vice president. The agreement stated that the parties agreed each of them would “be guaranteed to receive equal pay and bonuses as both President and Vice President. . .”

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iStock-654702696-300x200One asset that many Texans do not consider their spouse to have an interest in is their 401(k) or any other retirement fund that they have been slowly building during the course of their marriage. Having to divide up your retirement funds may throw a wrench into one’s retirement plans, but, where possible, courts often award retirement accounts to the spouse in whose name they are held. Provided the somewhat-ambiguous “just and right” standard is met, Texas divorce courts have wide discretion to divide up individual assets as they see fit. This may involve splitting each asset, such as 401(k), and dividing the funds therein between the spouses. However, more commonly, courts attempt to award whole assets to either party to avoid an overly complicated, and perhaps unnecessary, division of property.

With this in mind, it is important to focus aspects of your case at trial on why the court should award your 401(k) to you. Factors such as your role in contributing to it, your need for future support, the value of assets in your spouse’s control, your and your spouse’s relevant incomes, which spouse is appointed primary conservator of their children (if any), and many others can be useful to craft a compelling case to keep your 401(k) plan (or any other asset).

In addition, you can sometimes increase the likelihood that you keep your 401(k) post-divorce by entering into a settlement agreement with your spouse. In Texas, spouses are free to enter into settlement agreements to resolve one or more aspects of their divorce, such as the division of their community estate. Settlement is an important process in a Texas divorce, because it can often be the best way to ensure that you retain your hard-earned nest egg and any other assets that you consider important.

imagesFailing to respond to a Texas divorce petition can result in a default judgment with an unfavorable property division.  What happens, though, if the spouse who received the default judgment fails to take action to enforce the property division for several years?  A Texas appeals court recently considered a case involving that issue.

Wife Obtains Default Judgment

The husband bought a home before he met the wife.  They refinanced it jointly twice during the marriage. The wife subsequently filed for divorce and obtained a default divorce decree in February 2011. The decree listed the home as community property and stated that the wife owned it alone as separate property and that the court divested “any interest, title, and claim the Husband may have to [it].” The court further ordered the husband to sign any deeds necessary to transfer the property to her.  There was a remaining principal of $43,399.14 according to the bank statement for the next month.

The husband testified he had not been served and only found out about the divorce case and default divorce later that year. The wife moved out about four months after the divorce. She stated the husband did not want her to live there and tried to “kick [her] out in a very aggressive way. . .” She claimed “[t]here was a lot of violence. . .”  The husband testified the wife would yell at him that the house was hers and she was going to take it from him. He then went to court to see the divorce decree and learned it awarded the house to the wife.  He said he could not afford an attorney at the time.

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iStock-1125625723Parties to a Texas suit affecting the parent-child relationship may enter into a mediated settlement agreement (“MSA”) to resolve one or more issues in their suit.  An MSA is binding if it prominently states in bold or underlined font or in capital letters that it is not subject to revocation, is signed by the parties, and is signed by the parties’ attorneys who are present at the execution. Tex. Fam. Code § 153.0071. When these requirements are met, a party is entitled to judgment on the MSA. Because an MSA is a contract, it is construed according to the contract-interpretation principles.  If an MSA is ambiguous, there is a fact issue of the intent of the parties. A Texas appeals court recently considered what should happen when an MSA included a discrepancy between the stated amount of child support and the calculation for determining child support.

Mother and Father Enter into Settlement Agreement

Following mediation, the parents entered into an MSA that included an attached handwritten page with a child-support calculation as well as four W-2s showing the wages the father earned.  The parties initialed each page of the MSA, but not the W-2s.

The MSA identified the father’s child-support obligation as $1,062.60 per month. The attachment stated that “child support is based on [the father’s] representation that he has no rental income and is calculated pursuant to the attached calculations and Exhibits.”

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iStock-1287431987A family business can complicate the property division in a Texas divorce. A recent case considered whether a husband could compel arbitration to enforce a buyout provision in a company agreement during the divorce proceeding.

The parties formed a limited-liability company together during the marriage, with each owning a 50% membership interest.  The husband subsequently petitioned for divorce and the wife filed a counterpetition. Both attached the standing order required by the Travis County District Clerk to protect the parties and preserve their property while the case is pending.  The standing order applies to all divorce suits filed in Travis County (and many other counties have similar standing orders, such as Dallas, Collin, Denton, Rockwall, and Tarrant Counties) and prohibits parties from taking certain actions that would harm or reduce the value of the property and from selling or otherwise alienating property belonging to either party.

Wife Seeks to Compel Arbitration on Business Disputes

The husband sought injunctive relief and temporary orders to address disputes relating to operation of the business.  The wife asked for those disputes to be resolved according to the company agreement, which required any court proceeding brought by one owner against the other be submitted to mediation first and then to binding arbitration if not resolved. The parties were required to go to mediation and arbitration and the arbitrator entered an award regarding management and control of the business.  The wife moved to enforce the arbitration award and the court entered temporary orders in accordance with that award.

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Sometimes, people served with divorce papers do not respond.  They may be unsure what to do or they may not want to face the realities of divorce.  Failing to respond will not prevent the divorce, however. If a respondent fails to file an answer to a Texas divorce petition, the court may still grant the divorce through a default judgment.  Although the petitioner must submit evidence supporting their material allegations and the property division must still be just and right, the divorce may be granted on terms that are unfavorable to the respondent.

A husband recently appealed a default judgment that granted a divorce on the ground of adultery. The parties married in 2008 and had two children together. They entered into a post-marital agreement in 2018.  Under that agreement, if the wife filed for divorce because of the husband’s adultery, she would get conservatorship of the children without a geographical restriction, spousal maintenance, and certain property in which the husband held a separate property interest. The wife petitioned for divorce the next year and alleged adultery.  The husband did not file an answer.

Default Judgment is Entered

The wife submitted an affidavit to prove up the divorce that incorporated the post-marital agreement by reference.  She asked the court to approve the post-marital agreement as the agreement of the parties. The trial court granted the divorce on the ground of adultery. The husband appealed.

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