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Proving Separate Property Interests in Texas

sitting roomIn a recent Texas property division case, an ex-husband appealed a final divorce decree on the basis of five issues. The case arose when a couple married in 1992. The wife filed for divorce in 2013, claiming the husband had cheated on her. She asked for a disproportionate share of the marital estate due to fault for the marriage breaking up, as well as a disparity in the spouses’ earning power and their ability to support themselves.

The husband filed a general denial and counterclaim and also asked for a disproportionate share of the marital estate. The lower court granted the divorce on the ground of adultery. The husband was awarded as separate property an undivided interest in a funeral home business, the land on which it was located, and two adjacent tracts. The wife was also awarded an undivided interest in the funeral home, the land, and the adjacent land. The lower court awarded her the marital home and an insurance check as well. The husband asked for findings of fact and conclusions of law. None were filed, and he didn’t file a notice of past due findings.

He appealed. The appellate court explained that during a divorce, the court must order a division of the estate in a way that is just and right with due respect to each party’s rights under Texas Family Code section 7.001. The appellate court found it should reverse a property division ruling only if the mistake materially affected the lower court’s just and right division of property.

The husband argued that it was improper for the lower court to refuse to prepare findings and conclusions. However, the appellate court found he waived his right to complain by not raising this issue and reiterating the request.

The husband also argued it was an abuse of discretion for the lower court to award the marital home and insurance check to his wife, since they were community property due to be equally divided. He also argued it was inappropriate for his wife to get an undivided interest in the funeral home and land, since they were his separate property.

The appellate court reasoned that the lower court wasn’t required to divide it equally but could order an unequal division when there was a reasonable basis to do that. Factors to be considered included the parties’ abilities, benefits, education, physical conditions, the separate estate’s size, the nature of the property, and their disparity in earning abilities. The court could also consider the fault of the cheating spouse if fault was pled.

The appellate court reasoned that property possessed by either spouse during a divorce is presumed to be community property under Texas Fam. Code section 3.003 (a). If there are doubts about the character of property, they are supposed to be resolved in favor of the community estate. When divorcing, the characterization of property is determined by time and circumstances. To overcome the presumption that property is community property, the spouse who is claiming it’s separate property needs to trace and identify which property is claimed to be separate.

In this case, the husband claimed his father gave him the funeral home and land tracts as gifts. Both him and his father testified it was a gift during trial, and the wife testified she didn’t have personal knowledge about their discussions. However, the husband didn’t submit documents to show his acquisition of the funeral home or its incorporation, which he claimed was evidence that it was a gift.

The appellate court found that the husband’s testimony about the funeral home and real property wasn’t enough to be considered clear and convincing evidence rebutting the community presumption and establishing the characterization of the property as separate.

The appellate court determined that evidence showed that the funeral home, land, marital home, and insurance check were community property. It also found that the lower court had broad discretion to consider the husband’s commission of adultery. Therefore, it determined that the lower court hadn’t abused its discretion in awarding the marital home and insurance check to the wife.

The judgment was affirmed.

If your divorce involves matters related to property distribution, contact the Texas attorneys at the McClure Law Group at 214.692.8200.

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