A spouse who improperly spends large amounts of community assets without the other spouse’s knowledge or consent may receive a smaller share of the remaining community estate during a Texas divorce. A Texas appeals court recently considered whether a property division was just and right after the trial court found the husband had committed fraud on the estate by spending money on other women.The wife filed for divorce after learning her husband had been unfaithful. The husband testified to having affairs for the past 30 years. He took the other women on trips and shopping sprees, paid their rent and car payments, and hired some of them and gave some of them money for their own start-ups. He paid for these things through his business accounts, company credit cards, and petty cash from his pharmacy.
The wife hired a CPA to provide an accounting of the husband’s businesses. The CPA rendered an opinion that more than $7 million was either missing or spent in transactions that did not benefit the community estate.
The husband rejected the amount identified by the wife’s CPA, claiming a large portion of the amount identified did not exist. His expert opined that the wife’s accountant had made conclusions based on insufficient data. The husband’s employee testified the husband never took petty cash. She also stated some of the transactions identified by the plaintiff’s accountant were not fraudulent because they benefited either the business or the community estate. The trial court found the husband was not a credible witness, spoliated evidence, and committed a fraud on the community of nearly $4 million.