Articles Posted in Equitable Reimbursement

As a general rule in Texas, all property that you acquire during marriage is community property.  There are some exceptions in which property can be deemed one spouse’s separate property.  These are pretty basic concepts but the issues arise when property is commingled or wasted by another spouse and how does a court compensate the other spouse for that?  For instance, most people may realize that if you buy a home prior to marriage then that home should be your separate property.  However, if there was still a mortgage on the home and your spouse contributed to the mortgage then the contributing spouse now has a reimbursement claim.  Also, reimbursement arises when one spouse “wastes” or spends money from a community property account.  For example, if the parties have a savings account and one spouse spends money from that account and cannot prove it is for necessary living expenses then the other spouse may be able to recover their portion of the funds.  Equitable reimbursement can be a tricky concept that family lawyers have to deal with because it is not as cut and dry as people think and sometimes, even though the law may seem clear.

The important thing is to know the law and understand whether or not you qualify for an equitable reimbursement claim.   If you are making a claim for reimbursement, then you bear the burden of proving that expenditures were made and that you have a right to be reimbursed for those expenditures.  So the two issues to focus on are (a) either funds of one estate were used to enhance another estate without receiving any benefit (separate property money used to pay off a debt that arose during that marriage; separate money used to put towards the purchase of a community asset) OR (b) the other spouse “wasted” the funds of the community estate.  The latter is proved by stating that the “wasting spouse” has committed constructive fraud—they spent your portion of the estate without your knowledge or consent.  This is not to be confused with actual fraud which requires malice intent.  If you prove this, then your spouse must defend themselves and prove that it was “fair” spending on such things as necessary living expenses.   The spouse defending themselves can always have a claim for an offset which is where they state that they are owed some deduction in the claimant spouse’s total reimbursement because they may have done some other form of reimbursement.  For example, you may have a claim for reimbursement of $50,000.00 but your spouse can claim an offset if they purchased something for you with a portion of those funds (i.e. a car or paid off some debt).

We have several cases involving claims of reimbursement in Kaufman County.  It is a normal occurrence in divorces, especially if people have separate property coming into the marriage or inherit something during the marriage.  If you feel that you are eligible in any way for an equitable reimbursement claim or have questions regarding property division in a divorce in general, please contact Guest & Gray and schedule a consultation.