Division of Marital Property Upon Divorce

Question 1

Court-ordered Alimony not valid in TX

Answer 1

TX does not recognize court-order alimony for the support of a spouse after the divorce

An agreement between the parties for contractual alimony is valid and may be incorporated in to the court order

Court may order period future payments for property that is not easily divisible

A alimony judgment from another state is enforceable in TX via the full faith and credit clause

Question 2

*Prerequisites for receiving spousal maintenance

Answer 2

The court may order maintenance for either spouse if the spouse seeking maintenance will lack sufficient property, including the spouse’s SP, on dissolution of the marriage to provide for the spouse’s minimum reasonable needs and:

Four Options:

10+ Year Marriage: The spouses were married for 10 or more years and the spouse seeeking maintenance lacks the ability to earn a sufficient income to meet her minimum reasonable needs. Also, a spouse seeking maintenance under this method must show diligence in seeking employment or obtaining special training.

Family Violence:The spouse ordered to pay maintenance (obligor) was convicted of family violence or deferred adjudication during the marriage or within the past 2 years against the spouse or the spouse’s child.

Spousal Disability: The spouse seeking maintenance is unable to earn a sufficient income to provide for her minimum reasonable needs because of an incapacitating physical or mental disability.

Child Disability:The spouse seeking maintenance is the custodian of a child who requires personal supervision and substa

Question 3

*Spousal Maintenance Amount Limitation

Answer 3

The amount of spousal maintenance may not exceed the lesser of $5,000 per month or 20% of the obligor spouse’s monthly gross income

Question 4

*Factors to be considered in setting maintenance amounts

Answer 4

1. each spouse’s ability to provide for his or her minimum reasonable needs independently
2. education and employment skills of the spouses
3. duration of the marriage
4. age, employment history, earning ability, and physical emotional condition of the spouse seeking maintenance
5. excessive or abnormal expenditures or destruction, concealment or fraudulent disposition of CP
6. the contribution by one spouse to the education, training, or increased earning power of the other spouse
7. the property brought to the marriage by either spouse
8. the contribution of a spouse as a homemaker
9. marital misconduct
10. any history or pattern of family violence

Question 5

*Diligence in earning sufficient income

Answer 5

There is a rebuttable presumption that maintenance is not warranted when spouses have been married for 10+ years unless the spouse seeking maintenance has exercised diligence in earning sufficient income to provide for his or her minimum reasonable needs during the separation

Question 6

*Duration of maintenance order - 5 years

Answer 6

No more than 5 years if:

1. the spouses were married to each other for less than 10 years and eligibility is under family violence requisite; or
2. the spouses were married to each other for at least 10 years but not more than 20 years

Question 7

*Duration of maintenance order - 7 years

Answer 7

No more than 7 years if:

1) the spouses were married to each other for at least 20 years but no more than 30 years

Question 8

*Duration of maintenance order - 10 years

Answer 8

No more than 10 years if: the spouses were married for 30 years or more

Question 9

*Durational General Rule

Answer 9

Courts are usually required to limit the duration of maintenance to the shortest reasonable period that allows the spouse seeking maintenance to earn sufficient income to support their needs

Shortest reasonable time will not apply if 1) spouse has a physical or mental disability, 2) has duties of the custodian of a child, or 3) another compelling impediment to earning (but can still not exceed caps)

generally not allowed for spousal maintenance to be ordered for an indefinite time

Question 10

*Termination of maintenance order

Answer 10

on death of either party, on remarriage of the spouse seeking maintenance, or if the spouse seeking maintenance cohabits with another person who they have a dating or romantic relationship with

Question 11

*Downward Modification of maintenance order

Answer 11

Paying spouse may seek a reduction if there is a material and substantial change in circumstances

Can be decreased but not increased

Question 12

Affirmative Defenses to not paying maintenance

Answer 12

To avoid contempt:

1) payee lacked ability to pay the amount ordered
2) payee lacked property needed to support, raise the funds needed to support
3) payee attempted unsuccessfully to borrow the funds, AND
4) did not know of a source for which the money could have been borrowed or otherwise legally obtained

Question 13

*Just and Right Division of Community Property

Answer 13

upon divorce, court must divide the CP (but not SP obv) as it deems just and right; court has wide discretion to do so subject to rules

This does not mean that the division must be equal

Presumption that trial court properly exercised its discretion. Will only be reversed if finding the it was manifestly unjust

Question 14

*Factors court considers for “Just and Right” division

Answer 14

-Disparity of income and earning capacities,

• relative business opportunities, financial conditions, and obligations
• relative education and abilities
• physical conditions,
• size of each parties SP,
• length of marriage
• whether one party wasted community assets

Question 15

Income during year of divorce is separate property if spouses agree

Answer 15

On written agreement of the spouses, the court may treat income in the year in which the divorce took place as SP, so that the divorcing spouses can file separate tax returns for the entire year

Question 16

No tort cause of action for wasting or depleting community assets

Answer 16

Instead this will be factored into when determine the “Just and Right” division

Question 17

Acceptance of Benefits

Answer 17

Under the acceptance of benefits doctrine, a litigant may be estopped from appealing a judgment after voluntarily accepting its benefits

If party accepts benefits due to financial distress not intent to accept the benefits

Question 18

Quasi Community Property

Answer 18

Is property that is acquired while the couple was domiciled in another state that would have been CP if acquired under the same circumstances in TX

Such property is subject to the “just and right” equitable division power upon divorce under the same rules that apply to CP

Division on divorce- treated as CP
Division at death- treated as SP

Question 19

Property not subject to division

Answer 19

1. good will of professional practice

2. professional degrees

Question 20

Lifetime Gifts

Answer 20

Either spouse has an unrestricted power to make gifts or her separate property without the other spouse’s consent

One spouse can give his one-half CP interest in an asset to the other spouse, making the asset the donee spouse’s SP

One spouse allowed to make “reasonable”gifts of community property without the other spouse’s consent and participation - unless fraud

Question 21

Illusory Trust

Answer 21

If one spouse uses CP to create a revocable trust and also retains the power to control the trustee in selling, encumbering, and investing the trust assets, the trust is illusory and can be set aside by the other spouse

Question 22

Property Acquired during Bigamous marriage

Answer 22

1/2 of the property acquired during a second marriage is the CP of the 1st spouse and the twice-married spouse. The other half of such property belongs to the second spouse, unless the 2nd spouse know of the preexisting marriage, in which case all the property would simply be the CP of the 1st marriage

Question 23

*if asset is a business entity, what can other party show to get a piece of it if it is separate property?

Answer 23

pierce the corporate veil (use the closely held business interests)

Question 24

• Statute of Limitations for Enforcing the Just and Right Division of Property

Answer 24

No SOL for clarify order dividing property

Enforcing judgments: 10 year SOL

when statute calls for payment to be made upon certain conditions being met, SOL begins when each payment is due

2-year SOL applies to enforcing the division of tangible personal property in existence at time of the divorce.

2-year SOL for for enforcing the division of future property from the date the right of property matures.

Question 25

*Temporary Orders Pending Appeal

Answer 25

After notice and hearing, court can make temporary orders while an appeal is pending to protect property and persons

e.g. order support payments give one party exclusive access to residence,

Court can modify its temporary order if the circumstances of one party have materially and substantially changed and the modification is equitable and necessary to protect property or persons.

Question 26

*Revising Divorce Decree (just and right division of property)

Answer 26

A divorce decree is final as far as disposition of property and is not subject
to modification.

Question 27

• Community Property Not Partitioned In Divorce (e.g. parties forgot to include it in their inventories or appraisals so judge could partition)

Answer 27

if community is not properly partitioned in the court proceeding is subject to just and right equitable division in a later proceeding (NOT a revision of the original proceeding)

Action to divide the property must be brought within two years after the other spouse repudiates the community ownership claims.

Question 28

*Presumption of Community Property upon Just and Right Division

Answer 28

on dissolution of marriage, there is a presumption that whatever assets are on hand are community property.

• If party asserts that something is separate property (or separate property to just that person instead of separate property to both spouses; e.g. gift), it must prove that by clear and convincing evidence.
• Generally, for funds in an account, this is done by tracing funds back to amounts held before marriage or received through gift or inheritance.

Question 29

*Can court offset reimbursement claims with child support?

Answer 29

No. Court cannot consider child support in determining what a just and right division of the community property is.