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Property Division in Texas Divorce Must Be Equitable But Not Equal

In a Texas divorce, the court is required to divide the property in a “just and right” manner.  The court is not required to divide the property equally but must divide it equitably.  It may order a disproportionate division if it has a reasonable basis to do so.  There are a number of factors a trial court may consider in dividing the community estate.  Those factors include the nature of the property, income disparity, business opportunities, relative financial conditions and obligations, education, physical condition, age, fault in the break-up, the benefit the innocent spouse would have received if the marriage continued, the size of the separate estates, and a probable need for future support.

The husband in a recent case challenged the disproportionate division of property in favor of the wife.  The wife filed for divorce after finding escort and dating websites on her husband’s phone and home computer.  She ultimately requested a disproportionate division of the property, arguing the husband was at fault in the breakup, wasted community assets, gifted community assets, and committed actual or constructive fraud.

The parties had a variety of financial and investment accounts.  The wife said her husband managed her separate property investment accounts, and she did not have information about them. She also testified that he provided her with a statement purportedly identifying all of the accounts.  That statement included $60,000 in company stock of his former employer.  A 1099 indicated the husband sold 6,000 shares of the stock for $1,200 in September 2015.  He testified he was “given” 6,000 shares when he started working there, but he had to pay $1,200.  He further testified that the company required him to sell the stock back for the purchase price when he left the company.  He said he did not update the information on the statement after selling the stock.

The wife submitted spreadsheets identifying more than $640,000 in unexplained or questionable transactions and expenses that she considered waste of community assets.  She put many of these transactions and expenses into three categories:  gift expenses, travel expenses, and sexual expenses.  She identified payments to an interior decorator to decorate the apartment to which he moved after leaving the marital home and expenses for a trip he took with another woman. She categorized more than $10,000 as sexual expenses, including expenses for massage parlors and an international online dating site.  She listed more than $180,000 in gifts to the husband’s parents and adult children or for their benefit, primarily related to college tuition payments for the children.  The wife testified she had not agreed on gifts to her husband’s family or payment for his children’s tuition. She thought those payments would be made with her husband’s separate property.

The husband admitted to expenses related to his apartment.  He testified the woman who traveled with him was his masseuse and denied having an affair with her.  He admitted using the dating site.  He testified his wife knew he sent money to his children and denied agreeing to pay their tuition with his separate property.

The trial court entered findings of facts and conclusions of law.  The trial court found that the company stock was community property and that the last value the husband had provided to his wife was $60,000.  The trial court further found that he had failed to account for the unexplained transactions and had committed a constructive fraud on the estate that supported a disproportionate division. The trial court also found the husband had committed adultery.

The husband argued there was insufficient evidence regarding the company stock and his alleged waste and fraud on the community.  The appeals court pointed out that the trial court had not found the husband’s testimony credible.  Furthermore, it relied on the statement he had provided to his wife in determining the value of the stock.  The trial court was responsible for weighing the credibility of the witnesses, and therefore the appeals court let the trial court’s credibility determinations stand.

The trial court found the husband either had failed to account for the unexplained transactions or did not dispute them.  The husband argued the evidence was legally and factually insufficient to support the finding of fraud and waste because it consisted of just speculation and conjecture.  The wife testified the husband controlled or managed all of the accounts other than her separate account and the joint account they used for expenses.  The appeals court found it was within the trial court’s discretion to determine he controlled the accounts and therefore had the burden to prove the fairness of the disposition.  The trial court had not found the husband’s testimony credible.

The husband argued the property division was manifestly unjust and unfair and not supported by sufficient evidence.  The trial court had considered the appropriate factors, finding the husband committed adultery and was at fault for the break-up.  The court also found the husband’s income was more than twice that of the wife.  Finally, the court found the husband had wasted community property.

Finding the trial court had based its conclusions upon its determinations of credibility, the appeals court rejected the husband’s argument regarding the insufficiency of the evidence and affirmed the trial court’s judgment.

As this case shows, property does not have to be distributed equally if there is a reasonable basis for the distribution.  The court may consider a number of factors, including fault and adultery.  If you are facing a divorce, an experienced Texas divorce attorney can assist you in pursuing your fair share of the marital assets.  Call McClure Law Group at 214.692.8200 to discuss your case.

More Blog Posts:

Evidence of Adultery in Texas Divorce

Wasting of Community Assets in Texas