Articles Posted in Divorce

Texas divorces that include many assets can be complicated. The State of Texas follows laws that assume all property obtained by a couple in the course of their marriage is “community property” that should be divided equally in the event of a divorce. Many factors can come into play to rebut this presumption of community property. As a result, Texas family courts sometimes divide assets unequally in the interest of fairness. The Texas Court of Appeals recently addressed a claim by a divorced spouse that the family court incorrectly awarded a piece of property to his ex, when it should have been awarded to him as his separate property.

According to the facts discussed in the appellate opinion, the parties in the recently decided case were married in 1997. Each party had significant assets prior to their marriage, and they agreed to a premarital agreement (PMA) before getting married. Under the PMA (colloquially known as a prenup), each party retained an exclusive individual interest in the property they owned before the marriage, as well as their respective incomes earned during the marriage. While married, the couple acquired several pieces of real property, as well as many business interests. Although the PMA was clear about the parties’ individual property and incomes, the parties appeared to commingle their assets in a way that made it difficult to determine what money was used to purchase each property.

In 2012, the parties filed for divorce. As part of the divorce proceedings, the properties and assets of the couple were divided. The family court determined that fourteen pieces of real property, which were deeded in the husband’s name, were actually community property as they were purchased with commingled assets. After the ruling was final, the husband appealed the decision to the Texas Court of Appeals, arguing that the properties should have been determined to be his own individual property based on the PMA and other factors.

The Court of Appeals of Texas reviewed a man’s appeal regarding the property division set out in his final divorce decree. According to the court’s opinion, after 25 years of marriage, the wife filed for divorce and served the man with the process. The wife appeared at court with her attorney; however, the man failed to answer the filing or appear at court. At trial, the judge awarded the wife all of her retirement accounts, half of the husband’s retirement accounts, the parties’ home and all contents, her military identification and identification, and all property in her possession. Five months after the divorce decree and “just and right division” of the parties’ estate, the husband challenged the property division.

Texas family law provides that to prevail on an appeal, the appellant must establish that: they filed the suit within six months of the order, they were party to suit, they did not participate in the hearing that resulted in the judgment, and the error is apparent on the face of the record. In this case, the husband argues that no evidence exists to support a just and right property division of the couples’ estate.

The court reasoned that, generally, if a defendant fails to answer, the failure is taken as an admission of the plaintiff’s factual allegations. However, the rule has limitations in the context of a divorce case. If a divorce defendant fails to answer, the plaintiff must still present evidence to support their demand for property division.

Going through a Texas divorce is a difficult process. Going through a divorce alone, however, without a qualified family law attorney to represent you, can feel insurmountable.

A recent court opinion demonstrates this principle in action. The opinion is an appeal from a divorce decree, a document that makes a divorce legally effective and explains how a couple’s assets and debts will be divided. From the time of filing for divorce, it took this couple five years to obtain the court order that made the divorce legally effective. That meant five years of court filings, appearances, and notices, as well as five years of untold personal anguish for the husband and wife.

Still, the troubles did not end there. The husband, who was not represented by a lawyer at the time the divorce decree was signed, made an appeal. The husband urged the court to put aside the divorce decree, which weighed heavily in favor of the wife. His argument for setting aside the decree was that he did not know about the final hearing, that there was insufficient evidence put forth at that hearing, and that there were obvious errors in the decree that could not stand.

When a couple gets divorced, there are many logistical aspects that need to be handled. For some couples, this may include separating the combined assets and determining custody of the children. And when one, or both, of the spouses has debts at the time of the divorce, this can affect the decision-making process as well. In a recent Texas appellate case, the court was tasked with deciding whether the previous judge misappropriated debt to the husband, affecting the division of the community property of the couple. Ultimately, the court decided that the division of assets was appropriate, regardless of the husband’s argument.

In this case, the couple got married in 2008 and separated in 2018. After a trial, the court awarded the wife one of the couple’s cars, 50% in any joint bank account, 50% community interest in a retirement savings account, and any bank accounts and possessions in her name. She was also ordered to pay all of the debts incurred from her credit cards, along with 50% of her student loan debt. The husband was awarded a different vehicle, 50% in joint bank accounts, 50% community interest in a retirement savings accounts, and bank accounts and possessions in his name. He was also ordered to pay 50% of the debt owed on the student loan account.

On appeal, the husband argued that the court mischaracterized the student loan debt as partially attributable to him. Like assets, debt can be divided amongst the parties during a divorce. Ultimately, the court disagreed with the husband’s argument and ruled the trial court did not abuse its discretion in the way it divided the assets—including debt.

A Texas appeals court recently considered a Texas divorce case in which the trial court had unequally divided the parties’ pensions. In that case, the trial court had granted the divorce and divided the community property. In dividing the community property, the trial court awarded each of the parties 100% of their pensions. The husband appealed, arguing that the trial court abused its discretion in dividing the parties’ retirement accounts by awarding the wife 100% of her FERS pension because her pension was more valuable than the husband’s. The husband argued that as a result, the wife was awarded a disproportionate portion of the community estate. The husband argued the division was unfair because it created an overall division of the estate of 62% to the wife and 38% to the husband.

Division of Community Property Under Texas Law

Under the Texas Family Code, a trial court must divide the estate of a married couple in a way “that the court deems just and right.” However, a trial court does not need to divide a community estate equally. An estate may be divided unequally as long as there is a reasonable basis to do so. A court can consider a number of factors, including the difference in the parties’ incomes and earning capacities, the nature of the property, the parties’ physical condition, the parties’ financial obligations, fault in the dissolution of the marriage, their ages, their business opportunities, the size of their separate estates, and their need for future support.

In the U.S., states can follow one of two methods of distributing property during a divorce; equitable division or community property. Texas is one of nine jurisdictions that follows the community property doctrine. Under this theory, the law presumes that all of the property a couple acquired during the marriage equally belongs to both spouses. Spouses who wish to assert separate ownership over a piece of property must prove sole ownership.

Under Texas Family Code Ann. § 3.0001, separate property is anything one spouse owned before marriage. Further, separate property includes certain property a spouse acquired during the marriage. For example, separate property may include:

• An inheritance one spouse received.
• Property gifted from the husband or wife.
• Compensation for personal injuries.

However, it is essential to note that courts do not consider personal injury damages related to earning capacity loss as separate property. A party contesting community property presumption over an item must prove ownership by a preponderance of the evidence.

Continue Reading ›