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 $9,200.00 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.
Recently the news covering the custody battle between Bode Miller and his child’s biological mother Sarah McKenna became a 24-hour news cycle. According to court filings, Ms. McKenna while still pregnant moved to New York from California to attend school. Approximately a month prior to Ms. McKenna’s departure from California, Mr. Miller filed a paternity and custody suit in California State Court. Two days after the child was born, Ms. McKenna filed a custody case in New York State Court. The New York family court decided that the Ms. McKenna had “fled” California with the child in utero; and, while this was not child abduction under the UCCJEA, the Court decided the move was simply to avoid the California Court’s jurisdiction. Further, the Court decided that the prior paternity/custody suit filed in California by Mr. Miller, “trumped” the New York filing as well, giving California statutory authority to decide the custody issue. In On November 14, 2013, the New York Family Court’s decision was overturned on appeal and was remanded back to New York family court for further decision on all issues.
This case has ignited a debate over whether a mother may move an unborn child to a different jurisdiction prior to the birth of the child.
Even if you have not been proven to be the biological father of the child, in Texas, you still have legal rights that may be enforced.
Prior to the birth of the child, you may request a DNA test from the court. If the mother agrees paternity can be determined even before the baby is born. In addition, now there are non-evasive and less risky options for prenatal testing for paternity.
A purported father does have the right to establish paternity. Establishing paternity in Texas can be a process that occurs prior to the birth of the child. There are several forms of pre-natal testing available. Some methods are costly and some methods more invasive than others. In Texas, a man can establish paternity prior to the birth of a child by filing a request for adjudication of parentage and voluntary litigation. If the mother agrees to prenatal testing the Court will accept the DNA test results and make a determination on the record. However, if the mother does not agree, a Court may not force her to have invasive testing on the fetus.
A purported father has a right to a custody determination although this right cannot be determined prior to the birth of the child. In Texas, a court has jurisdiction to decide custody issues if Texas is the “home state” of the child. In the case of a child less than six months of age, “home state” means “the state in which the child lived from birth with a parent. . . .” Tex. Fam. Code Ann §152.102(7); see also Waltenburg v. Waltenburg, 270 S.W.3d 308, 315 (Tex. App.—Dallas 2008, no pet.).