Divorce|Heiman Law Firm

What Is A Texas Marital Property Agreement (“Post-Nup’”)

Sep 23, 2017 | Divorce, Family Law

Folks who marry young often do not own much property beyond personal effects and, perhaps, some furniture and a motor vehicle of some sort. Throw in some idealistic notions about the assured permanency of their marriage, and you typically get a couple having little to no interest in preparing a Prenuptial Agreement to spell out their respective rights when their marriage ends (as all do, either by death or divorce). But, when that couple has been together long enough to have weathered some of life’s storms together, and perhaps accumulated some property, that couple may then want to do some planning for “what if’s.” A specific kind of Texas Marital Property Agreement, called a “Partition or Exchange Agreement,” can be entered into by that married couple, so as to provide certainty as to what will happen to them when their marriage ends (again, either by death or divorce). That is what we will be discussing today.

Agreeing to limit or to do away with Community Property

The Texas Constitution now provides that (along with people “about to marry”) “spouses, without the intention of defrauding preexisting creditors may by written instrument… partition between themselves the community interest of one spouse…for the community interest of the other spouse…in other community property then existing or to be acquired.” Further, “the portion or interest set aside to each spouse” shall be that spouse’s Separate Property. And, the income generated by that property can also be agreed to be Separate Property (instead of Community Property).

The Practical Effect of This Kind of Agreement

What this means is that married people (“spouses”) can decide that they do not want to operate under Texas’ Community Property system. Instead, certain property which they acquire will be one spouse’s Separate Property, and other property which they acquire will be the other spouse’s Separate Property. They may or may not agree to keep some property as Community. Spouses who have children from previous relationships, and those who have significant Separate Estates, often find this to be an attractive option for preserving their estates for themselves and their descendants. Importantly, such agreement is invalid if used in an attempt to defraud pre-existing creditors (such as by trying to move property to an estate which those creditors cannot reach).

Right of Survivorship Agreement

As part of their property agreement(s), spouses might also agree that some or all of their Community Property will become the Separate Property of the surviving spouse, upon the death of a spouse. In this regard, it is like a Testamentary Will, except with the advantages of passing property outside of the Probate process. Upon the death of one spouse, the other one automatically becomes the owner of those assets, without any court action being required.

Agreeing to limit or do away with Separate Property

Our Constitution also allows spouses to limit how much, if any, of their property will remain Separate. In other words, spouses might agree that all of their property will belong to the marital community, rather than to either of them separately. In my practice, this option is not nearly as popular as the option of limiting Community Property, discussed above.

Conclusion

Traditionally, the property acquired by married people in Texas was, with few exceptions, Community Property. Our state Constitution now allows married people to change that arrangement, if they would rather have more Separate Property and less (or no) Community Property.

When is Temporary Spousal Support Awarded in Texas?

Aug 23, 2017 | Divorce, Family Law

As we recently discussed (here), it is only under specific circumstances that a Texas court may award spousal support to a party at the end of a Texas divorce case. If those circumstances do not exist, then the court is unable to make that award. Today, we will look at a related issue: a Texas court’s ability to award Temporary Spousal Support.

What is Temporary Spousal Support? It is financial support that one party to a divorce is ordered to give to his or her spouse during the divorce case. As such, it necessarily terminates at either the conclusion of that divorce case, or earlier, as may be ordered by the court. Its purpose is to protect the welfare of the financially-dependent spouse during the time period for which it is ordered. Temporary Spousal Support is based on the legal duty of each spouse to support the other one during the existence of their marriage to one another; and, even after a divorce case has been filed by one of those spouses, the marriage, and that support obligation, still exist until the divorce is granted.

What types of support might be awarded? Sometimes the temporary support is ordered to be made by one spouse paying money directly to his or her financially-dependent spouse. Other times, the payment of certain expenses, such as rent, mortgage, utilities, or a car note, is ordered as Temporary Spousal Support. In either case, the court can consider that support awarded and paid when dividing the parties’ Community Estate at the end of the divorce case.

So, how does the court determine whether to order temporary spousal support? The easiest way is when the parties have made agreements about it. Without such an agreement, however, the court will need to hold a hearing, and consider the financial evidence that is provided by the parties. Such evidence will necessarily include information as to each party’s earnings and earnings capacities; what bills and other liabilities exist, and the necessity of maintaining those bills and liabilities.

How is it proved to be needed? The party seeking the temporary spousal support has the burden of proving that it is needed in a particular case. Consequently, he or she will need to prepare a Financial Information Statement, and obtain relevant records such as the tax records of the parties. Most other documents, such as bills, are Hearsay, and can only be admitted (over objection from the opposing party) by the laying of proper evidentiary predicate. While the broad, technical, and often complex issues of Courtroom Evidence are way beyond the scope of this writing, suffice it to say that careful thought must be given ahead of time as to which documents are material, relevant, and admissible under our law. The courtroom is not the place to “wing it.”

Whether temporary support is awarded often determines if a party will be able to make it financially though the divorce. Consequently, it should be taken seriously.

When Is “Alimony” Awarded in Texas?

Jun 23, 2017 | Divorce, Family Law

When a divorce seems likely, we often are asked about whether one spouse might be required to make support payments for the other spouse. Although, some folks call such support payments “alimony,” Texas does not have an actual alimony system. Instead, Texas law provides for “Spousal Support.” While all of the differences between alimony and spousal support are beyond the scope of this piece, suffice it to say that spousal support is a considerably more limited support system than is traditional alimony.

First, it is worth noting that sometimes parties will agree to so-called “Contractual Alimony,” perhaps for tax avoidance issues. That subject will be reserved for a later blog post. The same is true for the “Temporary Spousal Support” which a court might Order for just while the divorce case is pending.

A party seeking spousal support in Texas (after the divorce case is over) must first demonstrate that he or she “will lack sufficient property, including the spouse’s separate property, on dissolution of the marriage to provide for the spouse’s minimum reasonable needs and:

(1) the spouse from whom maintenance is requested was convicted of or received deferred adjudication for a criminal offense that also constitutes an act of family violence, as defined by Section 71.004, committed during the marriage against the other spouse or the other spouse’s child and the offense occurred:

(A) within two years before the date on which a suit for dissolution of the marriage is filed; or

(B) while the suit is pending; or

(2) the spouse seeking maintenance:

(A) is unable to earn sufficient income to provide for the spouse’s minimum reasonable needs because of an incapacitating physical or mental disability;

(B) has been married to the other spouse for 10 years or longer and lacks the ability to earn sufficient income to provide for the spouse’s minimum reasonable needs; or

(C) 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.” Tex. Fam. Code, Sec. 8.051.

So, the first step is determining whether the person seeking the support has enough property to meet his or her “reasonable minimum needs.” If the answer to that question is “yes,” then the analysis can stop. Post-divorce Spousal Support cannot be awarded to that person.

If the answer to that first question is “no,” then the analysis will continue: can the person seeking spousal support show that the other party has been involved in ‘family violence” as described above? Is the person wanting support incapacitated by a disability? Can the party seeking spousal support show that this marriage has lasted for ten (10) tears or longer, and that he or she is unable to earn enough to meet that person’s minimum reasonable needs? Or, is that person the care-taker of a disabled child of the marriage, and so, is unable to work enough to provide sufficient support?

If the answer to any of the above questions is “yes,” then the Court may award Spousal Support. Otherwise, the court may not.

For the answers to more frequently asked questions about Texas Family Law, check-out our other blog posts on this sight and our FAQ page.

And, you can sign-up to receive our newest blog posts here.

Do It Yourself Divorce: Does It Make Sense For Me?

May 25, 2017 | Divorce

We live in an age of do-it-yourselfers. Many folks paint their own homes, prepare their own taxes, and, work on their cars; all by themselves. This makes sense when the task or project to be accomplished can be done as competently by a non-professional, as by a professional. Some divorce cases fit that profile, and others do not. Let’s see when it makes sense to do your own divorce, and when it doesn’t.

The first characteristic of a successful DIY divorce is an agreement on all issues with your soon-to-be-ex-spouse. This includes the division of all property and debt, as well as the terms and conditions of child issues: custody; support; possession and access (visitation); and, the allocation of the right to make important decisions for the child or children. There also should be agreement about whether there will be spousal support, and if so, the amount and duration of that support. If there is a disagreement on one or more of those significant issues, then the case needs some professional guidance.

The next trait of a successful DIY divorce is the absence of Family Violence (the use or threat of violence against a family member), and intimidation. If your marriage does not have a safe, peaceful space to discuss issues, then you should not try both deal with your spouse on your own.

Next, both spouses need to have full and complete knowledge of all assets and debts. If there is any doubt about whether you have that degree of knowledge about those things, then a Discovery Plan should be designed and implemented by your lawyer. If you waive discovery, then you may find that you have also waived your right to recover assets for yourself, or to have debt awarded to the other party. This is an important reason for you need to know that you have complete information about the property and debt of both spouses.

If all of those traits are present, then you should also make sure that there are no complicated transfer or tax issues. For example, if done correctly, retirement accounts can be divided without any tax consequences occurring; if not done precisely right, then substantial tax liabilities (and perhaps, penalties) may be realized by one or both spouses.

Finally, you need to have the willingness to spend the time and effort necessary to learn what paperwork needs to be generated, exchanged, filed, and sent to the appropriate entities and agencies, as well as to the court.

If your case does not make it through that maze of qualifications, it may still be possible to resolve the case issues without litigation: Divorce Mediation, done by a lawyer with lots of Family Law experience, may be able to help guide you and your spouse to an agreed resolution, without trial. While Divorce Mediation is not appropriate in all divorces, it may be for yours. To see whether it may be right for you, click here.

Can Divorce Mediation Save You Time & Money?

Feb 25, 2017 | Divorce

Divorce cases have traditionally involved the husband and the wife each getting their own lawyer, filing a lawsuit for divorce, and then, treating the case much like any other civil case: setting hearings on preliminary matters that should be resolved early in the case; sending and responding to written discovery requests; taking depositions of each other, along with any other witnesses who know things that are important to the case; attempting to negotiate a settlement of the issues of the case; and finally, if no agreement has been reached, setting the case for a contested trial. Most Texas Courts also now require the parties and their lawyers in a divorce case to spend a full day in mediation prior to the trial date. These steps make up the Litigation Process. It is time-consuming and costly.

But, there is another way to resolve divorce cases, even when all of the issues are not agreed on by the husband and wife at the start of the case. This process is called Divorce Mediation. This process is usually substantially quicker and less expensive than the Litigation Process described in the paragraph above. Let’s see how the Divorce Mediation Process works.

When the husband and wife decide to use Divorce Mediation, they do not each hire a lawyer and begin fighting the case. Instead, they agree on one Divorce Mediation lawyer to assist them in working towards a resolution of the case. This Divorce Mediation lawyer first learns from them what the contested issues are, gathers information, then leads mediation to try to reach a settlement. If and when a settlement is reached (and, settlements are reached in most cases that use this process), the terms of the settlement are reduced to writing, and signed by the parties. With the difficult part of the case (resolving contested issues) behind them, the parties can, then, choose to finalize the case themselves, or to hire another lawyer to prepare the final divorce paperwork, and present it to the court, in a process known as a Divorce Prove-up.

The Divorce Mediation process will usually go more smoothly and quickly if both parties have full information about bank accounts, retirement accounts, the house payment or rent, the bills, and any other financial matter. And, if they have minor children, then each parent should inform himself or herself about each child’s current situation, such as the child’s medical condition, and any existing academic issues. When the parties have the same information about these matters, the Divorce Mediator can, then, lead a discussion of the issues, develop settlement proposals for the parties, and work towards attempting to have the parties reach agreement on the issues of the case. This process usually yields positive results, if both parties are ready for the divorce to happen, and are willing to work in good faith towards reaching agreements.

Divorce Mediation has advantages over the Litigation Process. When issues are resolved in Divorce Mediation, the process is private. Contrast that with contested cases, where court filings are made that can be seen by anyone in the public who wants to look at those filings. Also, the Divorce Mediation process provides a greater opportunity for the parties to be civil to each other, which is important when they have to co-parent one or more children together. And, it is usually less expensive and quicker.

Divorce Mediation is a relatively new process. The days when divorces had to involve people publicly fighting issues in a court are behind us. While not every case is suitable for Divorce Mediation, most are.

For information on how to get ready for a divorce, please see 8 Steps to Take to Prepare for Divorce.

How Is Community Property Divided in a Texas Divorce?

Feb 23, 2016 | Divorce

Texas is one of just a handful of Community Property states, and as such, divides marital property in divorce cases differently from the other, non-Community Property states. So, just how does Texas make that property division?

The Texas Family Code provides that in a divorce case, the court should make a “just and right” division of the community estate. This means that the court is not required, nor even presumed, to make an equal (“50/50”) division of Community Property. Instead, the court is charged with making a division which the court deems to be fair. Before we look at the factors that the court uses to determine how to divide Community Property, it is important that we get clear on what is, and what is not, Community Property.

Community property is all property acquired by either or both spouses during the marriage, except for items acquired by gift or inheritance. This is true regardless of whose name property is acquired in, and also, regardless of which spouse pays for the property. Your non-community property items are your “Separate Property,” and the court cannot take those items away from you.

While the definitions of Community property and Separate Property may seem clear and straight-forward, sometimes property rights in a particular case become complicated when, e.g., there are transfers of property between spouses, or when funds earned during a marriage are used to pay for the debt on Separate Property (like when one spouse owns a home prior to marriage, and makes mortgage payments on that house during the marriage). Also, there are presumptions which apply to property rights. Accordingly, it is usually a good idea to discuss your Texas marital property with an experienced Texas Family Law Attorney.

Now that we know what property the court can divide (the Community Property), it is time to see how the court decides how to divide the property.

Texas law provides the following as some of the factors for a court to consider when dividing Community Property:

Fault in The Break-up of the Marriage: If the court decides that one spouse is primarily responsible for the failure of the marriage, then the court may decide that the innocent spouse should receive more of the Community Property;

Benefits The Innocent Spouse Would Have Received by Continuation of the Marriage: One spouse may lose more from the break-up of the marriage than the other one will, such as loss of health insurance coverage, club memberships, networking or business opportunities. The court may consider those losses, particularly if that spouse is also the innocent spouse.
Disparity of Earning Capacities: This is related to the loss of benefits often suffered by one spouse in a divorce. The court can consider how the loss of the other spouse’s income will likely affect a spouse.
The Length of the Marriage: If the spouses have built a life together over a considerable time span, then the court can consider the loss of the marriage to be more costly—the innocent spouse may be required to walk away from a well-established life and start a new one.
The Relative Health of the Spouses: If one spouse is walking away from a sick or injured spouse, then the court may consider the loss to be larger and more impactful for the unhealthy spouse.
The Size of the Separate Estates: If one spouse has a much larger Separate Estate then the other one has, then the court may decide that more Community Property should awarded to the spouse having less Separate Property.
The Right to Reimbursement: Claims for reimbursement are factors that can be considered in dividing the community property. The approach involves the financial interrelationship between the separate estates and the community estate. Reimbursement rights can be complicated, and so, should be discussed with an experienced Texas Family Lawyer.
Tax Considerations: Tax liabilities, or tax losses, on property can be considered by the court when awarding that property in a divorce.
Improper Use/Waste of Community Assets: If one spouse intentionally reduces the value of Community property (perhaps, out of spite), or gives property to a paramour, then the court can alter the award to take that waste into consideration.
Attorney’s Fees & Costs of Litigation: If the divorce cost more than it should have, due to the actions of one spouse, then the court can consider that fact when making its division.

Those are some of the factors which a court may consider when dividing the Community Estate. Case law provides others that may, also, apply to your individual case. We would be glad to discuss your situation with you.

Also, we welcome any questions that you may have about the award of marital property in a Texas divorce.