Property and Asset Division

Division of Marital Assets

Texas law requires trial courts to divide the estate of the parties in a manner that is just and fair having due regard for the rights of each party and any children of the marriage.  Tex. Fam. Code Ann. 7.001.  A disproportionate division must have a reasonable basis.  Smith v. Smith, 143 S.W.3d 206, 214 (Tex. App. – Waco 2004, no pet.).  The trial court has broad discretion in determining the disposition of property in a divorce action.  If there is some evidence of a substantive and probative character to support the division, the trial court does not abuse its discretion if it orders an unequal division of marital estate.  However, the division should not be a punishment for the spouse at fault.  There is a difference between making a just and right division of the property with due regard for the children of the marriage and punishing the errant spouse.  In general, the trial courts in Texas have perceived this distinction. 

Generally, in a fault-based divorce, the court may consider the conduct of the errant spouse in making a disproportionate distribution of the marital estate.  Young v. Young, 609 S.W.2d 758, 761-62 (Tex. 1980).  This does not mean that fault must be considered.

The Texas Family Code sections 3.02 and 3.07 provide six circumstances when a divorce decree may be granted in favor of one spouse.  These include the traditional fault grounds for divorce of cruelty, adultery, and abandonment.  These sections were codified by the Legislature into the Family Code along with section 3.01 which provides for “no-fault” divorce based on insupportability because of discord or conflict of personalities that destroys the legitimate ends of the marriage relationship and prevents any reasonable expectation of reconciliation.

Texas courts have considered the following factors when equitably dividing a community estate: 

  1. fault in breakup of the marriage;
  2. the benefits that the innocent spouse would have derived had the marriage continued;
  3. disparity in the spouses’ income and earning capacities;
  4. each spouse’s business opportunities;
  5. differences in the spouses’ education;
  6. physical health and need for future support;
  7. the relative ages of the parties;
  8. each spouse’s financial condition and obligations;
  9. the size of each spouse’s separate estate and any expected inheritance;
  10. the nature of the spouses’ property;
  11. the rights of the children of the marriage;
  12. waste of community assets or constructive fraud against the community;
  13. gifts by one spouse to the other; and
  14. tax liabilities.

The court need not divide the community estate equally.  Smallwood v. Smallwood, 548 S.W.2d 796, 797 (Tex. Civ. App. – Waco 1977, no writ).  The court has a broad discretion in making a just and right division, and absent a clear abuse of discretion, such decision will not be disturbed.  Murff v. Murff, S.W.2d 696, 698-99 (Tex. 1981); Boyd v. Boyd, 131 S.W. 3d 605, 610 (Tex. App. – Fort Worth 2005, no pet.) 

When there is no evidence or insufficient evidence to support the property division or an award of attorney’s fees, the appellate court must reverse or remand such decision for a new trial.  Sadone v. Miller-Sadone, 116 S.W.3d 204, 208 (Tex. App. – El Paso 2003, no pet). 

A party who seeks to assert the separate character of property must prove that character by clear and convincing evidence.  Clear and convincing evidence is that measure or degree of proof that will produce in the mind of the trier of fact (judge or jury) a firm belief or conviction as to the truth of the allegation. 

In a popular decision Phillips v. Phillips, 75 S.W.3d 564 (Tex. App. – Beaumont 2002, no pet.), Chief Justice Walker opined that because legislature has now authorized “no fault” divorce, fault could no longer be considered in dividing community estate.  However, In Re Brown, 187 S.W.3d 143, 2006 Tex. App. LEXIS 686 (Tex. App. Waco 2006) states that what is “just and right” in dividing the property should not depend on the ground on which the divorce is granted; the just and right division of property is separate from the dissolution issue. If one spouse’s conduct causes the destruction of the financial benefits of a particular marriage, benefits on which the other spouse relied, a trial court should have discretion to consider that factor in dividing the community estate – regardless of the basis for granting the divorce.

To prove a disproportionate division of assets in a divorce case, counsel must put on clear and convincing evidence.  Without such support, there will be no disproportionate division of community estate.  The circumstances of each marriage dictate what factors should be considered in the property division upon divorce.

By Nacol Law Firm | Property and Asset Division
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Divorce: What is separate property and what is community property?

Under the Texas Family Code, a spouses separate property consists of 1) the property owned or claimed by the spouse before marriage; 2) the property acquired by the spouse during marriage by gift, devise, or descent, and 3) the recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage.

The terms “owned and claimed” as used in the Texas Family Code mean that where the right to the property accrued before marriage, the property would be separate.  Inception of title occurs when a party first has a right of claim to the property by virtue of which title is finally vested.  The existence or nonexistence of the marriage at the time of incipiency of the right of which title finally vests determines whether property is community or separate.  Inception of title occurs when a party first has a right of claim to the property. 

Under Texas Constitution, Art. XVI, Section 15, separate property is defined as all property, both real and personal, of a spouse owned or claimed before marriage, and that acquired afterward by gift, devise or descent, shall be the separate property of that spouse; and laws shall be passed more clearly defining the rights of the spouses, in relation to separate  and community property; provided that persons about to marry and spouses, without the intention to defraud pre-existing creditors, may by written instrument from time to time partition between themselves all or part of their property, then existing or to be acquired, or exchange between themselves the community interest of one spouse or future spouse in any property for the community interest of the other spouse or future spouse in other community property then existing or to be acquired, whereupon the portion or interest set aside to each spouse shall be and constitute a part of the separate property and estate of such spouse or future spouse; spouses may also from time to time, by written instrument, agree between themselves that the income or property from all or part of the separate property then owned or which thereafter might be acquired by only one of them, shall be the separate property of that spouse; if one spouse makes a gift of property to the other that gift is presumed to include all income or property which might arise from that gift of property; and spouses may agree in writing that all or part of the separate property owned by either or both of them shall be the spouses’ community property.

In 1917 the Legislature defined and income from separate property to be the separate property of the owner spouse.  In Arnold v. Leonard, 114 Tex. 535,273 S.W. 799 (1925), the Supreme Court held that the Legislature did not have the constitutional authority to characterize the income from separate property as the owner’s separate property.  The court explained that the Legislature’s authority was limited to enacting laws regulating the management and liability of marital property, not its separate or community character.  This decision strengthened the constitutional principal that the Legislature may not define what is community and separate property in a manner inconsistent with Article 16, Section 15 of the Texas Constitution.

There are numerous means by which separate property may be acquired in defiance of Article 16, Section 15, a partial list includes mutations of separate property, increases in value of separate land and personality, recovery for personal injury not measured by loss of earning power, improvements of separate land with an unascertainable amount of community funds, and United States Securities purchased with community funds.

Although such property may undergo changes or mutations, as long as it is traced and properly identified it will remain separate property.

The Texas Family Code defines community property as follows:  “community property consists of the property, other than separate property, acquired by either spouse during marriage.”

Texas Family Code, Section 3.003 states that all property possessed by either spouse during or at the dissolution of the marriage is presumed to be community property and that the degree of proof necessary to establish that property is separate property, rather than community property, is clear and convincing evidence.  Clear and convincing evidence is defined as that measure or degree of proof that will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established.  If property cannot be proved to be separate property, then it is deemed to be community property.

The Texas Family Code, Section 7.002, deals with quasi-community property and requires a court divide property wherever the property is situated, if 1) the property was acquired by either spouse while domiciled in another state and the property would have been community property if the spouse who acquired the property had been domiciled in Texas at the time of acquisition; or 2) property was acquired by either spouse in exchange for real or personal property and that property would have been community property if the spouse who acquired the property so exchanged had been domiciled in Texas at the time of the acquisition.

By Nacol Law Firm | Property and Asset Division
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Behind on Texas Child Support Payments? Possible Trouble Renewing Your Texas Drivers License!

Texas HB 1846: Suspension or denial of issuance or renewal of a license for failure to pay child support

The court or Title IV-D agency may stay an order suspending a license conditioned on the individual’s compliance with:

  1. A reasonable repayment schedule that is incorporated in the order
  2. The requirements of a reissued and delivered subpoena
  3. The requirements of any court order pertaining to the possession of or access to a child

The court or Title IV-D agency may not stay an order unless the individual makes an immediate partial payment in an amount specified by the court or Title IV-D agency. The amount specified may not be less than $200.

A licensing authority that receives the information shall refuse to accept an application for issuance of a license to the obligor or renewal of an existing license of the obligor until the authority is notified by the child support agency that the obligor has:

  1. Paid all child support arrearages
  2. Made an immediate payment of not less than $200 toward child support arrearages owed and established with the agency a satisfactory repayment schedule for the remainder or is in compliance with a court order for payment of the arrearages
  3. Been granted an exemption as part of a court supervised plan to improve the obligor’s earnings and child support payment
  4. Successfully contested the denial of issuance or renewal of license

An order suspending a license rendered before the effective date of this Act is governed by the law in effect on the date the order was rendered.

Texas HB 1846 takes effect September 1, 2013

By Nacol Law Firm | Property and Asset Division
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Feb
16

For Richer or Poorer, Hire Expert Help to Protect Your Interests in Your Texas Divorce

For better or worse,
For richer or poorer,
Until . . . a divorce is filed.

When there are several zeros at the end of your bank balance, as in $500,000.00; $5,000,000.00 or more, the financial aspects of divorce can be high risk.

Texas divorce laws are the same regarding the division of property whether the money and assets in a marital estate are a lot or a little; however, the courts will inevitably encounter and address more complex issues regarding the property division in a divorce case with substantial financial and business assets.

Texas is a community property state. What does that mean, as a practical matter, when divorce occurs?

1. The law presumes that all property owned by either spouse is community property, meaning that both spouses own an undivided one-half interest.
2. The court cannot divest a spouse of his or her separate property in divorce.

In a very simple explanation: Texas community property is everything earned or acquired during the marriage other than inheritances or gifts. Your paycheck is community property, your rental income is community property, the cars you purchase are community property, retirement funds accumulated during marriage are community property.

At the time of the divorce, the court will make a just and right division of the community property. “Just and right” does not mean 50/50. Often the courts will split the community property equally, but many factors may affect this division including:

1. The spouses’ earning abilities and education.
2. The spouses’ actual earnings.
3. Who has care and primary custody of the children.
4. The value of separate property owned by the spouses. If the wife inherited $3,000,000.00, should the husband be awarded more of the community property?
5. Fault in the break up of the marriage, especially if a cheating spouse spent substantial assets dating or cavorting with others.
6. The debts of the spouses.
7. Tax consequences.

The bigger the marital pocketbook, the bigger the risk to assets in play.

Texas Child Support and High Asset Divorces:

The court also has discretion in setting child support when the parents are wealthy. The Texas Family Code provides guidelines and the guidelines are presumably in the best interest of the child.

The law caps the Texas child support amount guidelines to a percentage of the first $7,500.00 of the paying parent’s earnings. However, the cap is not made of steel. The law is a guideline.

The court has the discretion to order child support in excess of the guidelines based on the children’s best interest which includes an examination of the proven needs of the children. In the case of children growing up in a high-income household, do not expect the court to necessarily limit its consideration to basic food and shelter. The court may consider many factors in setting child support, including the children’s current living standards, such as private education, nannies, medical issues, emotional issues, sports and other extracurricular activities and, in the rare case, a body guard.

When setting child support within a wealthy family undergoing divorce, the court has discretion, based on the evidence, to set order child support above the presumptive amount in the guidelines. The court’s determination is subjective and is reversed by higher courts only if the trial court “abused its discretion,” a high threshold indeed.

With so much at stake, you should hire an experienced family law attorney who can present your case clearly, and persuasively.

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Fathers Financial Check List in Preparation for a Texas Divorce

Preparing for a Texas Divorce:  Assets
Preparing for a divorce is painful no matter the circumstance. Before you get into the tangle of the Texas divorce process, you can reduce the expense, stress and conflict many people face by making sure you are prepared. Planning ahead allows you to make sound decisions and start preparing for your life post-divorce, and may also help you avoid post-divorce pitfalls. Below is a list of items you need to gather before counseling with an attorney.

Documents

1. A Listing of all Real Property, address and location, including (include time-shares and vacation properties):
1. Deeds of Trust
2. Notes
3. Legal Description
4. Mortgage Companies (Name, Address, Telephone Number, Account Number, Balance of Note, Monthly Payments)
5. Current fair market value

2. Cash and accounts with financial institutions (checking, savings, commercial bank accounts, credit union funds, IRA’s, CD’s, 401K’s, pension plans and any other form of retirement accounts):
1. Name of institution, address and telephone number
2. Amount in institution on date of marriage
3. Amount in institution currently
4. Account Number
5. Names on Account

3. Retirement Benefits
1. Exact name of plan
2. Address of plan administrator
3. Employer
4. Employee
5. Starting date of contributions
6. Amount in account on date of marriage
7. Amount currently in account
8. Balance of any loan against plan

4. Publicly traded stock, bonds and other securities (include securities not in a brokerage, mutual fund, or retirement account):
1. Number of shares
2. Type of securities
3. Certificate numbers
4. In possession of
5. Name of exchange which listed
6. Pledged as collateral?
7. Date acquired
8. Tax basis
9. Current market value
10. If stock (date option granted, number of shares and value per share)

5. Insurance and Annuities
1. Name of insurance company
2. Policy Number
3. Insured
4. Type of insurance (whole/term/universal)
5. Amount of monthly premiums
6. Date of Issue
7. Face amount
8. Cash surrender value
9. Current surrender value
10. Designated beneficiary

6. Closely held business interests:
1. Name of business
2. Address
3. Type of business
4. % of ownership
5. Number of shares owned if applicable
6. Value of shares
7. Balance of accounts receivables
8. Cash flow reports
9. Balance of liabilities
10. List of company assets

7. Mineral Interests (include any property in which you own the mineral estate, separate and apart from the surface estate, such as oil and gas leases; also include royalty interests, work interests, and producing and non-producing oil and gas wells.
1. Name of mineral interest
2. Type of interest
3. County of location
4. Legal description
5. Name of producer/operator
6. Current market value

8. Motor Vehicles (including mobile homes, boats, trailers, motorcycles, recreational vehicles; exclude company owned)
1. Year
2. Make
3. Model
4. Value
5. Name on title
6. VIN Number
7. Fair Market Value
8. Name of creditor (if any), address and telephone
9. Persons listed on debt
10. Account number
11. Balance of any loan and monthly payment
12. Net Equity in vehicle

9. Money owed by spouse (including any expected federal or state income tax refund but not including receivables connected with any business)

10. Household furniture, furnishings and Fixtures

11. Electronics and computers

12. Antiques, artwork and collectibles (including works of art, paintings, tapestry, rugs, crystal, coin or stamp collections)

13. Miscellaneous sporting goods and firearms

14. Jewelry

15. Animals and livestock

16. Farming equipment

17. Club Memberships

18. Travel Award Benefits (including frequent flyer miles)

19. Safe deposit box items

20. Burial plots

21. Items in any storage facility

22. A listing of separate property (property prior to marriage, family heir looms, property gifted)

23. Listing of all liabilities (including mortgages, credit card debt, personal loans, automobile loans, etc.):
a. Name of entity, address and telephone number
b. Account number
c. Amount owed
d. Monthly payment
e. Property securing payment (if any)
f. Persons listed as liable for debt

By Nacol Law Firm | Property and Asset Division
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Please contact father’s rights Dallas Attorney Mark Nacol, or father’s rights Dallas Attorney Julian Nacol with the Nacol Law Firm P.C., for legal insight to your rights as a father. Both attorney Mark Nacol, and attorney Julian Nacol , provide counsel in the area of family law including divorce, father’s rights, interstate jurisdiction, child support, child custody, visitation, paternity, parent alienation, modifications, property division, asset division and more. Attorney Mark A. Nacol is board certified in Civil Trial Law by the Texas Board of Legal Specialization. Our attorneys at The Nacol Law Firm P.C. serve clients throughout Texas, including Collin, Dallas, Denton, Ellis, Grayson, Kaufman, Rockwall and Tarrant counties and the communities of Addison, Allen, Arlington, Carrollton, Dallas, Fort Worth, Frisco, Garland, Grapevine, Highland Park, McKinney, Mesquite, Plano, Prosper, Richardson, Rowlett and University Park, Murphy,Wylie, Lewisville, Flower Mound, Irving, along with surrounding DFW areas.

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