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signingTexas is a community property state, and property acquired during a marriage is generally distributed equitably at the time of a Texas divorce.  However, couples may enter into premarital agreements, also known as prenuptial agreements, that alter the way property will be identified and distributed if a divorce should occur.

A premarital agreement played a significant role in one recent case.  Before marriage, the couple executed a premarital agreement that identified the separate property belonging to each party and precluded the acquisition of community property during the marriage.  They had two children together.  The wife filed for divorce after seven years.

The parties agreed to a joint managing conservatorship.  They stipulated there was a premarital agreement, and neither challenged its enforceability.  The trial court ultimately entered a final decree.    The court also confirmed certain real property was the wife’s separate property.  It also found the husband had breached the premarital agreement by raising a claim against that property and awarded attorney’s fees to the wife.  The court modified the standard possession order by not allowing overnight visits with the father on Thursdays and Sundays. The husband ultimately appealed.

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TaxWhen one spouse controls the finances, he or she has the opportunity to use community assets to the benefit of separate property.  The other spouse may challenge the disposition of those funds during a Texas divorce.  The spouse in control of the finances has a fiduciary duty to the other spouse during the course of the marriage.

A Texas appeals court recently considered whether a husband was required to reimburse the community estate for certain expenditures.  The trial court awarded the wife the majority of the community estate and ordered the husband to reimburse it for certain expenditures.  The husband appealed, arguing the evidence did not support the disproportionate division and some of the amounts he was ordered to reimburse.

The husband had entered the marriage a wealthy man with several businesses.  The wife alleged he allowed his separate companies to keep funds he should have received.  Since his businesses were S corps, he was personally responsible for paying taxes on the funds, even if they were not distributed.  The wife sought reimbursement for the undistributed funds and for the income taxes paid from the community estate.  Each party presented expert testimony.  The wife’s expert calculated that the estate had paid $1,000,742 in taxes for the separate companies and was entitled to reimbursement.  The husband’s expert said he did not agree the wife had a valid claim for reimbursement and presented his own calculations, showing $841,108 was paid.  The jury found the community estate had paid $841,108 in income taxes for the husband’s separate businesses.  The trial court included that amount in the valuation of the reconstituted community estate.

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gavelIn some Texas child support cases, attorney’s fees may be awarded.  When a party fails to make child support payments, the court is to order that party to pay the other party’s reasonable attorney’s fees and court costs in pursuing the child support.  The court may waive the requirement for attorney’s fees, however, if it finds good cause to do so and states its reasons.

In a recent case, a father challenged an award of attorney’s fees to the child’s mother.   The father was ordered to pay child support in the divorce decree.  He subsequently sued to recover child support payments that he claimed were in excess of his obligation.  The mother denied the claims and asserted a counterclaim for back child support, unpaid medical support, and attorney’s fees.  The trial court denied the father’s request for overpayments, determined the amount of arrearages that was owed, and awarded the mother that amount.  The trial court also found each party was responsible for their own attorney’s fees.

The mother appealed, arguing the trial court should not have credited the father for payments that were made directly to her rather than through the registry of state disbursement.  The appeals court affirmed that portion of the order but found the trial court abused its discretion in failing to award the mother attorney’s fees.  The appeals court ordered the trial court to award the mother reasonable attorney’s fees or find good cause for denying such an award.  The trial court held a hearing and awarded the mother more than $17,000 in attorney’s fees.  The father appealed.

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handicap parkingIn a Texas divorce, the court may, in its discretion, award spousal maintenance to a spouse who will not have enough property after the divorce to provide for his or her own minimum reasonable needs and meets one of the other enumerated conditions in the statute.  One of those conditions is the inability to earn sufficient income to provide for minimum reasonable needs due to an incapacitating physical or mental disability.  The determination of disability may be supported solely by the spouse’s testimony if it is sufficient and probative to establish there is a disability that prevents the spouse from becoming gainfully employed.

In a recent case, a husband challenged a spousal maintenance award by arguing there was insufficient factual and legal support for the award.  The husband filed for divorce after about 14 years of marriage.  The wife filed a counter petition and sought a disproportionate share of community property and spousal maintenance.  The husband had agreed to pay $1,875 per month in spousal maintenance temporarily as part of the mediated settlement agreement.

At trial, the wife testified about a number of health conditions, including deteriorated discs in her back and neck, vertigo, diabetes, depression, and arthritis.  She testified that she was 64 years old and had not worked in almost 20 years, since her neck surgery.  She further testified she was unable to go back to work due to back and neck conditions.  She submitted medical records from her treating neurologist documenting some of her conditions, symptoms, and medications.

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building blocksSometimes a change in circumstances causes a parent to want to change the amount of child support they are paying or receiving.  There are limitations on when a Texas child support order may be modified, however.  When the parties had previously agreed to a child support order that is different from what would have been awarded under the child support guidelines, the court may only modify it if there have been material and substantial changes to the circumstances of the child or a person affected by the order.  The trial court must look at the circumstances at the time of the order and compare them to the current circumstances.  There must be relevant financial information for both periods in the record, as seen in a recent Texas appeal.

The parents had previously entered into a mediated settlement agreement (MSA).  The trial court signed an agreed order naming them joint managing conservators and setting forth visitation schedules and child support obligations.  The father was required to pay $490 per month until the child turned 18.  The father’s occupation and income were not identified in the MSA or the agreed order.  The MSA stated the mother was self-employed but did not provide details.

The mother petitioned for a modification of the child support about five years later.  The father did not file an answer or appear at the trial.  At the trial, the mother submitted documents from the child’s doctors detailing his diagnoses. She attested that the child saw a psychiatrist every two weeks.  She testified the child’s schedule on school days needed to be almost exactly the same each day.  She stated he needed “a very high level of care.”  She said she thought his disability would keep her from full-time employment.

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When a business is struggling, the owner often wants to put money into it to try to save it.  This can be a simple matter when both spouses have ownership in the business.  Texas divorce attorneys understand, however, that it can be complicated when the business is one spouse’s separate property.  A Texas appeals court recently addressed this issue.ferris wheel

The wife filed for divorce nearly 14 years after the marriage.  At the time of the divorce, the wife was employed full-time.  The husband was unemployed and not seeking employment.  He stated he spent significant time dealing with a lawsuit involving his separate business.

The husband stated the business existed before the parties were married.  It ran independent businesses inside amusement parks.  Under the original arrangement, it paid the amusement park about 30% of the earnings of each location.  The wife stated that the business had done well and was profitable at that time.

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fireDivorcing parties sometimes agree to hang on to property for some time following the divorce.  Sometimes, they want to allow the children to remain in the home.  Sometimes, they want to make repairs to increase the property’s value.  Texas divorce attorneys know that there can be a lot of conflict prior to the sale of the property.  In a recent case, a Texas appeals court considered whether a former husband had a fiduciary duty to protect his former wife’s interest in the property they owned together.

The divorce decree ordered the parties to list the property for sale and to split the proceeds equally.  The wife moved to enforce the decree nearly 12 years later.  She claimed the husband failed to comply with the decree and failed to cooperate with selling the property.  She asked for clarification of any part of the decree the court found was not specific enough to enforce by contempt.  She also brought a breach-of-fiduciary-duty claim against him.

The wife argued the parties had agreed not to sell the property until the children graduated from high school.  She alleged her husband had willfully withheld the proceeds of an insurance claim for damage to the house.  She also claimed he had forged her name on an insurance check that was made payable to both of them and that she had to sue him to get half of the proceeds.  She claimed she was unable to pay for repairs to the property because the husband had withheld the proceeds.  The wife was ultimately charged for demolition of the house after the city condemned the property.

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giftDividing property is an important aspect of the divorce process.  Only community property is divided by the court, however.  Although property acquired during the marriage is presumed to be community property, Texas divorce attorneys know there are some exceptions.  A gift made to one spouse during the marriage is separate property.

A Texas appeals court recently reviewed whether property conveyed by the husband’s mother was properly characterized as community property.  The husband appealed the final divorce decree.  He challenged the characterization of about five acres as community property.  The court had found it was community property and awarded half of it to the wife.

At trial, the husband argued the property had been a gift from his mother and was therefore his separate property.  The wife argued the couple had begun the process of obtaining an equity loan for repairs to the property in 2013.  In November 2018, the husband’s mother signed a quitclaim deed transferring the property to her son.  The wife testified the deed had been printed from the internet, and the intent was for the husband to get the property so that they could obtain the loan and repair it.  The bank did not recognize the quitclaim deed, due to a lack of legal description of the property.  The husband’s mother then executed a general warranty deed conveying the property to both the husband and the wife.  The wife stated the warranty deed and a subsequent correction affidavit were intended to make both of them the property owners.

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calendarParties to a divorce often have to cooperate to complete the property division.  Texas divorce attorneys know, however, that parties are not always willing to cooperate.  A Texas appeals court recently considered whether a husband sufficiently complied with an order that he make a payment to the wife when he contacted the wife to make payment arrangements.

The parties came to a mediated settlement agreement and signed off on the proposed agreed final divorce decree.  The final decree ordered the husband to pay the wife $10,000 for the marital residence within 90 days of May 13, 2014.  Another section, under a subheading titled “Division After Full Payment of $10,000…,” provided that after the husband paid the $10,000 in full, he would be awarded the marital home.

Another section stated if the payment was not made in full within two years of May 13, 2014, the marital residence would be awarded to the wife, and the husband would be divested of all right, title, interest, and claim in the marital residence.

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accountingIn a Texas divorce, the court is required to divide the property in a “just and right” manner.  The court is not required to divide the property equally but must divide it equitably.  It may order a disproportionate division if it has a reasonable basis to do so.  There are a number of factors a trial court may consider in dividing the community estate.  Those factors include the nature of the property, income disparity, business opportunities, relative financial conditions and obligations, education, physical condition, age, fault in the break-up, the benefit the innocent spouse would have received if the marriage continued, the size of the separate estates, and a probable need for future support.

The husband in a recent case challenged the disproportionate division of property in favor of the wife.  The wife filed for divorce after finding escort and dating websites on her husband’s phone and home computer.  She ultimately requested a disproportionate division of the property, arguing the husband was at fault in the breakup, wasted community assets, gifted community assets, and committed actual or constructive fraud.

The parties had a variety of financial and investment accounts.  The wife said her husband managed her separate property investment accounts, and she did not have information about them. She also testified that he provided her with a statement purportedly identifying all of the accounts.  That statement included $60,000 in company stock of his former employer.  A 1099 indicated the husband sold 6,000 shares of the stock for $1,200 in September 2015.  He testified he was “given” 6,000 shares when he started working there, but he had to pay $1,200.  He further testified that the company required him to sell the stock back for the purchase price when he left the company.  He said he did not update the information on the statement after selling the stock.

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