Texas Divorce: For Richer or Poorer, Hire Expert Help to Protect Your Interests
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.
Nacol Law Firm P.C.
Dallas Divorce Attorneys
(972) 690-3333
Verbal Contracts and Texas Law
Verbal Contracts do exist and are legally enforceable in Texas, as a matter of law, if they meet necessary legal requirements and specificity. Adequate consideration must be given between the two parties of a verbal contract to make it binding. Adequate consideration is defined in two ways: (1) having a mutual reciprocal exchange [bargained for exchange] or (2) having legal value [an individual must do something that he is not legally obligated to do]. If adequate consideration is given between both parties and all other legal requirements are met, then a verbal contract may be held valid in a court of law.
Verbal contracts are also limited by the Statute of Frauds. The Statute of Frauds requires certain types of contracts to only be in writing purportedly to avoid defrauding citizens.
The following must be in writing:
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(1) Making a will or Trust
(2) A contract to answer for the duty of another (Guarantee/Suretyship)
(3) Marriage (exception common law marriage)
(4) Sale and contracts affecting Land
(5) A contract that lasts longer than 1 year from the time it is made and which cannot be performed in one year
(6) Any sale of goods for a price of $500 or more
(7) Sales of securities
Verbal contracts in Texas have limitations. Let’s say that a contractor wanted to paint the outside of your house. You decide to pay the contractor seven thousand to paint the outside of the house and the job will take approximately 3-8 weeks. If you have a verbal contract with the painter and pay him this could be legally enforceable in a court of law. The verbal contract with the painter is not invalidated by any provision set above in the Statute of fraud. It is a contract for service, under one year, and adequate consideration has been given with the payment of seven thousand dollars.
Here is another example of a verbal contract that will not be upheld in a court of law. An individual buys fifty acres from his neighbor for fifty thousand dollars under a verbal contract. Before the fifty thousand dollars is exchanged, the neighbor decides to pull out of the deal. This verbal contract would not be enforceable in court and the buyer cannot enforce the contract because it deals with real estate (land). This is one of the specific types of contracts that must be in writing because of the Statute of Frauds. The individual may get his money back but the point is he cannot enforce the contract since it is not in writing.
The best course of action in the litigious world we live in is to cover your tracks by securing a written contract in almost all circumstances. Do not rely on the limited options that allow a verbal contract to be enforced because in court you will have to deal with the “He said, she said” testimony and incur significant cost of litigation unnecessarily.
Texas Deceptive Trade Practices Act : Pre-Purchase Protection When Buying a Home in Texas
Purchasing a home can be a daunting yet exhilarating experience depending on the circumstances. Sometimes after a couple has purchased a home they regretfully discover many construction defects that were not disclosed to them by the Seller. Many undisclosed material defects within a home not detected by the buyer’s independent inspector that were misrepresented by the Seller may cause severe hardships in the future.
Legal relief requires an experienced real estate lawyer. A fraudulent misrepresentation made by a Seller when selling a home may give rise to a claim under the Deceptive Trade Practices Act of Texas. Multiple provisions relating to the misrepresentation of property per Tex. Bus. & Comm. Code §§ 17.46(b) are designed to protect a buyer. These misrepresentations if properly proven by the evidence will give rise to certain damages available to Buyers under the Texas DTPA Statute.
If you are the victim of fraudulent misrepresentations your independent inspector did not discover during the house inspection, you may still have relief. If circumstances prove that a misrepresentation was intently made or defect was concealed by the Seller, then under the DTPA you may be eligible to receive Economic Damages. Economic Damages include compensation for any pecuniary loss, including repair or replacement of defect. If the buyer of the home is victorious at trial, attorney’s fees and additional damages may be awarded as well.
If it can be proven that a Seller “knowingly” misrepresented a portion of the home to a buyer such as hiding evidence of termites, hiding foundation defect or old repairs, or electrical problems, then the buyer may be entitled to 3 times the amount of actual economic damages of the suit including attorney’s fees. The DTPA is a consumer based protection statute that ensures normal people are not taken advantage of due to their lack of knowledge.
If you are a buyer that has intentionally been taken advantage of by a Seller through fraud or deceit you should find an experienced attorney. DTPA actions are complex and time sensitive. An experienced attorney will give you the highest probability of success.
The Texas housing market is exploding and there are many out of state individuals moving into the Dallas / Fort Worth area. If you are a native Texan or a family transferring into the Dallas / Fort Worth area and feel you have been fraudulently deceived by a Seller, please call an experienced attorney with a firm hand to obtain the justice you deserve under the DTPA and other Consumer Protection Laws.
Julian Nacol, Attorney
Nacol Law Firm P.C.
Forming a Texas Business Corporation
A corporation is a legal entity that is granted a charter recognizing it as a separate legal entity having its own privileges, and liabilities distinct from those of its shareholders. When it is formed it becomes a separate entity from the people who own the stock of the corporation. For this reason, a corporation’s actions are made by the corporation and not by an individual person. This legal distinction is what separates the liability of the Texas corporation from the individual and is a major consideration in deciding to form a corporation.
Anyone can form a corporation in Texas. A corporation can form another corporation. Once the corporation is formed, the entity formed is responsible for all actions done in the corporate name. The new entity is required to file state and federal taxes and acquire any licenses to do business in the name of the corporation. The corporation can purchase insurance, own real estate and cars and other assets or personal property as if were a natural person. It is responsible for actions both good and bad done in its name. If a corporation fails, shareholders normally only stand to lose their investment, and employees will lose their jobs, but neither will be further liable for debts that remain owing to the corporation’s creditors.
Corporations can exercise human rights against real individuals and the state, and they may be responsible for human rights violations. There are five core characteristics of a business corporation:
•Legal personality
•Limited liability
•Transferable shares
•Centralized management under a board structure
•Shared ownership by contributors of capital
Generally, the corporation files articles of incorporation with the government, laying out the general nature of the corporation, the amount of stock it is authorized to issue, and the names and addresses of directors. Once the articles are approved, the corporation’s directors meet to create bylaws that govern the internal functions of the corporation, such as meeting the procedures and officer positions.
•Some of the advantages of a corporation are as follows:
•Shareholders have limited liability for the corporation’s debts or judgments against the corporation.
•Generally, shareholders can only be held accountable for their investment in stock of the company.
•A Texas corporation may deduct the cost of benefits it provides to officers and employees.
•A corporation pays 15% federal income tax on taxable income up to $50,000; 25% tax on income from $50,001 – $75,000; 34% tax on income from $57,001 – $100,000; 39% tax on income from $100,001 – $335,000; and 34$ tax on income over $335,001
There are some disadvantages to a corporation. The process of incorporating a business in Texas may require more time and money than other forms of organizations and the corporation may be monitored by federal, state and some local agencies and as a result require have more paperwork to properly comply with regulations. Incorporating may also result in higher overall taxes in some circumstances.
For answers to your questions on forming a business corporation in Texas, contact Dallas business attorney Mark Nacol with the Nacol Law Firm, P.C.
NACOL LAW FIRM P.C.
8144 Walnut Hill Lane
Suite 1190
Dallas, Texas 75231
972-690-3333
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Attorney Mark A. Nacol is board certified in Civil Trial Law by the Texas Board of Legal Specialization
