Articles Posted in Property

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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.

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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.

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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.

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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.

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Generally, a trial court in a Texas divorce case has the discretion to divide marital assets.  A trial court can, however, abuse its discretion if it divides property without reference to guiding rules or principles and without evidence to support the ruling.  An appeals court recently found that a trial court abused its discretion by mischaracterizing separate property as community property and improperly divesting the husband of his separate property.

Both parties had been married previously, and both asserted throughout the trial that they had separate property.  They each pled and testified that they had separate property and submitted documentation showing they had separate property.  Additionally, each submitted sworn inventories and filed proposed property divisions admitting the other party had separate property.  Neither party ever disputed or contested the other’s claims. There were only two disputed issues before the court at the time of the trial:  how to divide the wife’s retirement account and whether there were any reimbursement claims against the separate property.

The trial court, however, issued a letter ruling dividing all of the assets as though they were community property, despite the various agreements, stipulations, and uncontested submissions.  The husband moved for reconsideration, and the wife filed a short response in opposition.  The appeals court noted she had received the majority of the husband’s separate property under the letter ruling.

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Property owned by a limited liability company belongs to the company and is generally not considered either separate or community property subject to distribution in a Texas divorce case.  The limited liability company’s owners, known as “members,” do have an ownership, or “membership” interest in the company. That membership interest can be classified as separate or community property and distributed in a divorce.  Additionally, distributions made from the company are community property, even if only one spouse is a member.

A husband recently challenged a finding of constructive fraud and order for reimbursement based on expenditures by and loans to his limited liability company (LLC). He was the LLC’s sole member before and during the marriage.  The trial court granted the wife’s constructive-fraud claim and ordered reconstitution of the community estate.  The court also characterized the LLC as the husband’s separate property and reimbursed the community estate for loans made to the LLC.

The husband appealed, challenging the trial court’s findings and conclusions regarding the constructive-fraud and reimbursement claims.

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In a Texas divorce, there is a presumption that property possessed by either spouse during the marriage or at the time of the divorce is community property, unless there is clear and convincing evidence otherwise.  Separate property is property that is owned or claimed by one spouse prior to the marriage.

A wife recently challenged a court’s finding that certain property, the couple’s residence, was the husband’s separate property.  The property was conveyed to the couple from the husband’s son and daughter-in-law by warranty deed.  The husband and wife both testified the conveyance was a trade of real property and there was no additional consideration given.  The husband testified he traded a tract of land he owned before the marriage.  The wife argued, however, that the husband did not establish that he owned the tract prior to the marriage.

If property is acquired in exchange for separate property, the acquired property also becomes separate property. Thus, if the husband established that the tract was his separate property, then the residence would also be his separate property.

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Property division in a Texas divorce must be equitable.  In dividing the property, the court may consider amounts from the community estate that a party has dissipated or wasted.  In a recent case, a husband appealed the divorce decree arguing that there was insufficient evidence to support the division and that the division was manifestly unjust and unfair.

The couple had been married for about 40 years when the wife filed for divorce.  An associate judge issued a final divorce decree in 2015. The wife filed a motion for a new trial, which was granted.

The couple lived in a trailer home on an undivided tract of land.  The husband ran his electrician business from the trailer and stored the heavy equipment he used for the business in the barn.  This real property was awarded to the husband in the original trial.  After the second trial, the property was partitioned into two tracts.  The property division awarded Tract A with the trailer to the husband and Tract B with the barn to the wife.

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A Texas divorce case is not always over when the judge signs the final divorce decree.  The decree sets forth the property division, but the parties must take action to achieve the division.  If party fails to surrender property, the other party may need to file a motion to enforce the property division in the decree.  A former husband recently challenged an enforcement order, arguing that the motion had not been filed timely and the claim was time-barred.

The couple divorced in 2012.  The wife moved for enforcement of the agreed divorce decree in 2016.  She also petitioned for breach of alimony contract.  The court held a bench trial and subsequently signed an enforcement order, ordering the husband to make the payments to satisfy the funds transfers required by the decree, to make the unpaid alimony payments, to provide health insurance for the children and reimburse the mother for the premiums she had paid, add the mother to the custodial accounts for the children, and pay the mother’s attorney’s fees.  The husband appealed.

The husband argued the portions of the order awarding funds to the wife were barred by the statute of limitations.  Section 9.003 of the Texas Family Code requires a suit to enforce division of tangible personal property to be filed within two years from the date the decree was signed or becomes final after appeal.

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Property division in a Texas divorce must be just and right.  The property division may be “just and right” in a case where one party does not participate, but the court must have sufficient information to use its discretion in dividing the property fairly.  A spouse recently challenged the property division following a proceeding in which he did not participate.

One spouse petitioned for divorce in July 2017, alleging insupportability, which is the “no fault” ground for divorce in Texas.  He alleged, however, that the respondent had committed fraud on the estate and asked the court to reconstitute the community estate.  He also asked the court to confirm certain property as his separate property.

He claimed the respondent was a nonresident of Texas, but the marital residence had most recently been in Texas and he had filed the petition within two years of the date the marital residence ended (which would allow for Texas to have personal jurisdiction over the nonresident respondent).  The process server swore in an affidavit that the respondent had been served with the petition in Miami, Florida.

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