Know what Marital Property is Community or Separate in a Texas Divorce

September 2nd, 2014

In Texas, Community Property Laws apply in determining the Property Distributions to a wife and husband.  This system is employed to divide the property fairly between the divorcing couple.

What is Separate Party?  Texas Family Law Code, FAM 3.001: A spouse’s 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

  3. The recovery for personal injuries sustained by 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 means 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.

What Is Community Property? Texas Family Law Code, FAM 3.002:  Community property consists of the property, other than separate property, acquired by either spouse during the 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 clearly and convincingly 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.

What about Property Acquired during Marriage? Property in which inception of title occurs during marriage is community property unless it is acquired in one of the following manner, in which it becomes separate property of the acquiring spouse:

  1. By gift

  2. By devise or descent

  3. By a partition or exchange agreement or premarital agreement specifying that the asset is separate

  4. As income from separate property made separate as a result of a gift, a premarital agreement or a partition and exchange agreement

  5. By survivorship

  6. In exchange for other separate property

  7. As recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage.

During a divorce, it is important that both parties know what type of property is involved in the divorce and what is separate and community property. This knowledge may determine or influence what each party will receive at the end of the settlement.

Spousal Maintenance Laws in Texas

August 14th, 2014

Texas spousal maintenance can be a useful and effective tool in a divorce. A spouse lacking sufficient property or the means to provide for his/her minimum reasonable needs, may have awarded additional funds from the other spouse during the divorce and after to help rebuild his/her life following their divorce.

In September of 2011, the Texas Legislature revised and modified the requirements for spousal maintenance including the limits on amounts and duration of time allowed.

The eligibility requirements of the Texas spousal maintenance law is still considered one of the more restrictive spousal maintenance laws in the U.S.

To be able to be awarded Spousal Maintenance (statutory term for spousal support or alimony) you must be married and the spouse seeking support must lack sufficient property to provide for the spouse’s “minimum reasonable needs”. Also one of the following is required:

  1. The recipient must be unable to earn sufficient income to provide for his or her minimum reasonable needs because of an incapacitating mental or physical disability.

  2. The marriage lasted for 10 years or longer and the recipient lacks the ability to earn sufficient income to provide for his or her minimum reasonable needs.

  3. The recipient is the custodian of a child of the marriage of any age who requires substantial care and personal supervision because of a physical or mental disability that prevents the spouse from earning sufficient income to provide for the spouse’s minimum reasonable needs.

  4. The person ordered to pay support was convicted of or received deferred jurisdiction for an act of family violence during the pendency of the suit or within two years of the date the suit was filed.

The Maximum Amount of spousal maintenance the courts may award is $5,000 per month, although it is still limited to 20 percent of the Payer’s average Gross Monthly Income.

   The Maximum Duration of Time for spousal maintenance is:

  • Five years if the marriage is 10 years or less and the eligibility for spousal maintenance is established by an act that constitutes family violence.

  • Five years if the length of marriage is at least 10 years but no more than 20 years.

  • Seven years if the marriage length was at least 20 years but no more than 30 years.

  • Ten years if the marriage length lasted 30 years or longer.

In cases where the spousal maintenance is awarded due to the mental or physical disability of the spouse or a child of the marriage, the court may order the maintenance continue as long as the disability continues.

The spousal maintenance awarded by the court is discretionary and may not always eliminate the shortfall of the requesting spouse’s monthly expenses.

What about Termination of Spousal Maintenance? The obligation to pay future maintenance terminates on the death of either party or on the remarriage of the spouse receiving the maintenance.

If the court finds that the receiving spouse cohabits with another person and is in a dating or romantic relationship in a permanent place of abode on a continuing basis, the court shall order the termination of the maintenance obligation.

Termination of the maintenance obligation does not terminate the obligation to pay any maintenance that accrued before the date of termination and this amount will have to be paid or a judgment will be enforced by the court.

If you are thinking about a divorce in Texas and have questions concerning your eligibility for spousal maintenance contact a legal professional to help you through this process.

 

Texas and the Prenuptial Agreement

August 12th, 2014

In Texas, Prenuptial Agreements are becoming a very important tool for prospective spouses in the event of future marital problems.  With the rise in divorce rates and more boomer/senior remarriages, many people with assets are turning to a marital contract to sidestep a potentially difficult and very expense divorce.

A prenuptial agreement allows prospective spouses to, legally in advance, specifically define rights and obligations to each other and further allows spouses to decide their future marital property rights with relativity minimal judicial actions.  A prenuptial agreement, in Texas,  can cover any matter except:

  1. Violate public policy or a statute imposing criminal penalties

  2. Adversely affect a child’s right to support

  3. Defraud a creditor

Texas Family Code 4.003(a)(8), (b),4.106(a).

Among the permissible provisions that parties can list in a prenuptial agreement are the following:

  1. Rights and obligations of any interest, present or future, legal or equitable, vested or contingent, in real or personal property.

  2. Right to manage, control and dispose, by agreement, property upon separation of the married parties, dissolution of the marriage, death of either party, or other agreed event.

  3. Modify or eliminate spousal support.

  4. Specific matters related to prospective spouses, including personal rights and obligations that are not in violation of state laws.

  5. Choice of a state or country law that will govern the prenuptial agreement.

  6. Creation of a Will or Trust.

  7. Disposing of the Estate upon the death of one of the spouses. Also ownership rights and disposition of benefits from a life insurance policy upon the death.

  8. Waive one party’s right to occupy the family homestead after the other party dies.

Serving 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, Richardson, Rowlett and University Park, Murphy,Wylie, Lewisville, Flower Mound, Irving, along with surrounding DFW areas.