Although courts are still open and conducting Zoom hearings, there is no doubt that many court cases are moving along more slowly than otherwise desired as a result of the COVID-19 pandemic. A potentially more practical and expedient method of divorce is collaborative law. Continue Reading ›
A court generally may not amend or change the property division made in a Texas divorce decree. The court may issue an order to enforce the property division, but such an order may only clarify the prior order or assist in its implementation. If a court improperly amends or modifies the substantive property division in the final divorce decree, it is acting beyond its power and that order is unenforceable. Tex. Fam. Code Ann. § 9.007. Qualified Domestic Relations Orders (QDRO) are separate orders that set forth the distribution of retirement plan assets. They are considered a type of enforcement or clarification order and cannot change the property division made in the divorce decree.
In a recent case, an ex-wife sought an additional QDRO years after the divorce was finalized. The couple divorced in 1995, and the parties have been in litigation for the past several years regarding the husband’s retirement accounts.
The divorce decree awarded the ex-wife 50% “of any and all sums … related to any … retirement plan, pension plan, … or other benefit program existing by reason of [ex-husband’s] past, present, or future employment, including without limitation, [ex-husband’s] Retirement Fund, Provident Fund, and SPIF Fund with Shell Oil Company per Qualified Domestic Relations Orders …” The trial court signed a QDRO awarding the ex-wife half the funds in the ex-husband’s Shell Provident Fund on the date of the divorce. The court found the total community property interest in the Shell Provident Fund was the total amount of contributions, interest, and earnings made or accrued by or on behalf of the ex-husband into any of the Shell Provident Fund accounts. The QDRO stated the ex-wife was “divested of all right, title, and interest in and to any balance remaining in any account of the Shell Provident Fund…” and that the fund would be discharged from all obligations to her when full payment was made pursuant to the QDRO. It also said it would become an integral part of the divorce decree.
In a Texas divorce, the division of community property must be just and right. The goal is an equitable, but not necessarily equal, division. A party may not get the specific items that he or she wants, but that does not necessarily mean that the division of property is not just and right. In a recent case, the wife challenged the specifics of the property division.
According to the court’s opinion, the husband’s retirement annuity was worth $234,000 when he retired from his job. There was evidence that he withdrew funds from the account and hid them from the wife. There was evidence that he used the funds for household expenses and expenses related to the couple’s horses. The retirement account was worth approximately $50,000 at the time of trial.
The husband admitted that he did not report the withdrawals on the joint tax returns for several years, resulting in a $20,000 liability to the IRS. After the separation, the wife hired a CPA to seek innocent spouse status for her. She testified that she wanted the husband to pay the $3,000 for the CPA’s services.
Parties sometimes realize they have different understandings of a Texas divorce decree. The trial court may issue a clarifying order if the decree is ambiguous. In some cases, the decree may be facially unambiguous, but have a latent ambiguity when read in context of the surrounding circumstances. In a recent case, a husband challenged a clarification order.
The final divorce decree included a provision setting forth the amount of his bonuses the husband would pay to the wife. It further provided he would provide her a 1099 tax statement for each payment if allowed by his employer. If he could not provide the 1099, “then the payments made to [the wife would] be the amounts above net of taxes paid in [his] tax bracket.”
The wife later petitioned for enforcement, arguing the husband was not dividing the bonuses “net of taxes paid in [his] bracket,” but was instead dividing them after the tax withholding by his employer. She requested a clarifying order if the court found the decree was not specific enough to enforce by contempt.
Texas family law allows the parties to a divorce to enter into a binding mediated settlement agreement (MSA). If the agreement meets certain requirements, a party is entitled to judgment on the agreement. In some cases, however, one party may wish to challenge a mediated settlement agreement. In a recent case, a wife challenged the enforceability of a mediated settlement agreement.
The couple was married for about 10 years when the wife decided to end the marriage. She sought a mediator, and the parties attended mediation without attorneys and executed a written MSA.
The MSA made the parents joint managing conservators, with the husband having the right to designate the kids’ primary residence. The parties agreed the husband would keep the marital home and the wife would not pay child support. The MSA required the wife to file the divorce petition within 10 days. The MSA further provided the case would be finalized any time after May 1, 2015.
The husband filed a divorce petition nine days after the MSA was executed. He asked the court to approve and render judgment consistent with the MSA. The wife filed an answer with a general denial. The husband and his attorney appeared in court, but the wife did not receive notice of the hearing and did not appear. The trial court rendered oral judgment on the MSA at the hearing.
Texas law generally favors the freedom of contract. This principle also applies to prenuptial agreements. In Texas divorce cases, prenuptial agreements are generally valid and enforceable unless they were involuntarily signed or were unconscionable and signed without proper disclosures.
A wife recently challenged the enforceability of a prenuptial agreement. The couple met online while the wife lived in Vietnam. When the husband visited Vietnam, he gave her a copy of the prenuptial agreement his attorney drafted. The wife did not speak English, so she had it translated. She requested a change to the agreement.
The wife came to the U.S. and told the husband she was pregnant a few months later. He told her she needed to sign the agreement before they got married. The husband stated a paragraph was removed from the agreement based on the wife’s request.
A court in a Texas divorce case may only order spousal maintenance if certain conditions are met. The court must then consider relevant factors in determining the duration, amount, and manner of the payments. The other spouse may challenge a maintenance award if there is insufficient evidence to support a finding of eligibility for maintenance or if the trial court abused its discretion in ordering the specific award.
In a recent case, a husband challenged a maintenance award and the property division in his divorce.
Under Tex. Fam. Code Section 8.051, a spouse may receive spousal maintenance if he or she cannot earn enough income to meet his or her “minimum reasonable needs” due to certain specified circumstances. In this instance, the applicable provision of the statute provides that a spouse may be eligible for maintenance if he or she does not have the ability to make sufficient income to meet his or her minimum reasonable needs and has been married for at least 10 years.
In a Texas divorce case, a mediated settlement agreement (MSA) that meets the requirements set forth in the Texas Family Code is binding and cannot be revoked. Furthermore, the parties are entitled to judgment on such an MSA during the court’s plenary power.
In a recent case, a husband challenged a final decree nunc pro nunc issued by the court after the original final divorce decree failed to conform to the MSA. The parties executed a binding MSA, which awarded the husband $50,000 of the wife’s 401(k). However, when the court signed the agreed final decree, it awarded him $100,000 of the wife’s 401(k). The decree noted the agreements were reached in mediation and it was “stipulated to represent a merger of a [MSA]…” No post-trial motion was filed and the court lost plenary power.
The husband later filed a Qualified Domestic Relations Order awarding him $100,000 of the wife’s 401(k). The wife moved for a judgment nunc pro tunc on the grounds a clerical error in the final decree erroneously divided the estate in a way that was not compliant with the MSA. She asked the court to correct that error. The husband argued it was a judicial error that the court could not change. The court signed a final decree of divorce nunc pro tunc awarding the husband $50,000 of the 401(k). The husband appealed.
A trial court in a Texas divorce must divide community property in a just and right manner. Property can be somewhat broadly defined as it relates to property division in a divorce case. Many people do not realize that a lease of someone else’s property is subject to division in a divorce, unless the lease is shown to be separate property.
In a recent case, the wife challenged a property division that did not include a recreational lease held by the husband. The wife appealed the property division, arguing error in the trial court’s division of property. She argued the court failed to include a recreational lease in the community estate and that the court unfairly allocated the husband’s tax debt. The court had allocated all of the tax debt to the husband, but the wife argued the court erred in using it to offset the value of the assets awarded to the husband.
At trial, there was evidence the husband signed a written lease for a ranch during the marriage. The husband’s friend owned the property and testified the husband had helped him build or enhance some of the improvements on the property. The owner testified he would sell the ranch to the husband for a significant discount and indicated he would extend the lease to the husband indefinitely as long as he paid the rent.
Retirement can be a complex issue in Texas divorce cases. In some cases, retirement accounts may not be fully vested. In others, retirement income may be subject to periodic increases. When retirement income is subject to increases, the spouse required to make ongoing payments should be sure he or she understands how to calculate those payments in light of the increases.
A former couple recently ended up back in court more than a decade after their divorce due to a dispute over how to calculate retirement increases. The couple married in 1976 and divorced in 1998, after the husband’s retirement from the military. The wife was awarded $754.80 per month of the husband’s retirement, and 60% of all increases “due to cost of living or other reasons…” The husband was ordered to name the wife beneficiary under the Armed Services Survivor Benefit Plan (SBP). The wife was ordered to pay 40% of the cost of the SBP, which was to offset the retirement award the wife received.
In 2012, the wife informed the husband he had underpaid her. His new attorney told him he had been calculating his payments incorrectly. He had been calculating the payment using a method that resulted in payment of 60% of all cost of living increases cumulatively. After receiving advice from counsel, he began paying his wife 60% of the increases only in the first year they were received.