Published on:

In Texas, an informal or common law marriage can occur if the couple executed an informal marriage agreement pursuant to Texas law or agreed to be married and subsequently lived together as married in Texas and represented to others that they were married.

A Texas court recently found that a couple did not have an informal marriage, despite filing their taxes as “married filing jointly.” The couple began dating in 2003 or 2004.  The man proposed in 2005, and the woman accepted.  They moved to Texas together in 2006.  They wanted to build a horse clinic where the man would practice veterinary medicine and the woman would train horses.  They purchased property together and built the clinic.  They had joint bank accounts, but the bookkeeping for each business was kept separate.

They filed joint tax returns indicating they were “married filing jointly” from 2006 to 2013.  They co-habitated until 2013.  The woman filed for divorce in 2015.  After a bench trial, the trial court found the couple did not have an informal marriage and dismissed the divorce case.  The woman appealed.

Continue reading →

Published on:

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.

Published on:

The court in a Texas divorce case must divide property in a just and right way.  This does not necessarily mean that property is divided equally between the parties, but the division must be just.  What happens, though, when only one party participates in the divorce proceedings?  A Texas appeals court recently found that the trial court had to have sufficient evidence of the property values to divide the property justly.

The husband petitioned for divorce, but the wife did not answer or appear at the hearing.  The husband testified that there were two vehicles and a mobile home in the community estate.  He asked the court to award all of the property to him, but allow the wife to keep the property in her possession.  He did not testify or provide evidence of the value of the property.  The court granted the divorce and awarded the husband the vehicles, the mobile home, furnishing, and other goods and cash in his possession and control.  The court did not award any property to the wife.

The wife filed notice of a restricted appeal.  To succeed on a restricted appeal, she had to show that she filed the notice within six months of the decree, she was part to the lawsuit, she did not participate in the hearing or file post-judgment motions or requests for findings of fact and conclusions of law, and error is apparent on the face of the record. She clearly met the first three requirements, so the appeals court had to determine if there was error.

Continue reading →

Published on:

In Texas divorces, it is common for the parties to agree to a property division and ask the court to approve the agreement and include it in the decree.  Once the court does so, it generally may not modify or alter the property division included in the agreement.  It may, however, still divide property that was not divided in the agreement and decree.  It is therefore important for the parties to be sure the agreement to clearly divide everything, or they may have to go back to court to address something that was omitted.  This can be difficult in some cases, however. What happens, for example, when the agreement and decree divide the net amount of a bonus, but do not address pre-tax deductions that go to one of the parties?  A recent case addressed this issue.

The divorce decree incorporated the agreement between the parties, which included a detailed division of the marital estate based on the informal agreement the parties executed at a settlement conference.  The agreement stated the husband would receive 47% of the net amount of his 2013 year-end bonus and wife would get a 53% portion of the “net amount after taxes and deductions.”    The agreement also stated the wedding and engagement ring were the wife’s separate property.

The husband’s pay stub showed he received $460,000 for his 2013 bonus, but reflected two pre-tax deductions totaling $81,000.  The deductions included $75,000 for deferred annual bonus and $6,000 for personal savings account contribution. Taxes totaled $108,711.10 and the pay stub listed $270,228.90 as the “net pay” for the bonus.  The husband paid the wife 53% of the net pay amount.

Continue reading →

Published on:

In a Texas divorce, a premarital agreement is generally enforceable.  Although they are presumptively valid, they may not be enforceable if they are unconscionable or were not voluntarily signed.  There is no definition of “voluntary” in the Family Code, so courts have looked to the law governing enforcement of commercial contracts.  In determining if a premarital agreement was voluntarily signed, the court considers whether the party had advice of counsel, misrepresentations made in procuring the agreement, the amount of information provided, and whether any information was withheld.  Additionally, the court may consider evidence of duress or fraud in determining if the agreement was voluntary, but duress and fraud alone are not defenses to a premarital agreement.  A court recently considered whether a Texas premarital agreement was voluntary.

The couple signed a premarital agreement the day before they got married in Las Vegas.  The agreement set out the separate property of each of them and stated community property could not be acquired during the marriage.

The wife filed for divorce after ten years.  The trial court granted a partial summary judgment in favor of the husband on the wife’s claims for a Separate Property Agreement, including reimbursement, maintenance, and her challenge of the premarital agreement.  Following a trial, the court found the only community property accumulated during the marriage was a travel trailer.  It awarded the trailer to the wife.  The wife appealed, arguing the court had erred in granting the partial motion for summary judgment because there was a genuine issue of material fact as to whether she had voluntarily signed the agreement.

Continue reading →

Published on:

In a Texas divorce, the court may award spousal maintenance if the marriage lasted at least 10 years and the spouse seeking maintenance lacks sufficient property to meet his or her minimum reasonable needs and has insufficient earning capability to support herself or himself.  A Texas court recently considered whether spousal maintenance was appropriate when the spouse receiving maintenance had maintained employment with the same organization for over 30 years.

The couple had been married for nearly 40 years when they divorced.  The court ordered the husband to pay $650 per month for five years or until certain specified events occurred.  She was also awarded a 100% interest in the joint and survivor’s annuity of his retirement pension.

The husband appealed, arguing there was insufficient evidence to support the spousal maintenance award.  He argued the wife’s annual salary was more than sufficient to meet her minimum reasonable needs.  He also argued she had requested the marital home and that put her in a worse financial situation.

Continue reading →

Published on:

Texas 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.

Continue reading →

Published on:

When 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.

Continue reading →

Published on:

In 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.

Continue reading →

Published on:

In 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.

Continue reading →