What Your Role Is In Dividing And Confirming Marital Property
The court ultimately decides who gets what marital property when divorcing spouses cannot agree, but that is not to suggest each spouse is taken completely out of the equation. The court welcomes valid evidence or claims a spouse has that could affect division and confirmation.
This article outlines the spouses’ role in characterizing and valuing assets and liabilities, the two types of claims spouses can assert, and real-world examples of each.
ESTABLISHING CLAIMS
Let’s first discuss what establishing a claim means. When a spouse believes the court should be aware of any extenuating circumstances involving a particular piece of property – a house, land, retirement accounts, or even supposed separate property – they can submit to the court any valid evidence that supports that claim. When a spouse asserts a claim, that spouse is essentially telling the court, “You should consider this in your decision to divide and confirm said property.”
There are two claims a spouse can assert that would affect the court’s division and confirmation:
Claim for reimbursement
A claim for reimbursement arises when one marital estate (community or separate) contributes benefits to another estate and the contributing estate wants to be reimbursed for those contributions. Contributions that are reimbursable include when:
- One spouse uses their own money to pay off the other spouse’s credit card debt.
- A community estate pays the mortgage on separate property.
- A separate estate uses cash to buy a pool to be placed on community property.
- A community estate receives inadequate compensation for one spouse’s time, toil, talent, and effort used in a business under that spouse’s direction and control.
Per the Texas Family Code, if a spouse adequately establishes a claim for reimbursement, the amount awarded could be an asset either of the community estate or of one spouse’s separate estate, depending on which estate was the contributing estate. If the award is an asset of the community estate, the court must divide it in a just and right manner. If the award is an asset of one spouse’s separate estate, the award must be confirmed to that spouse’s separate estate.
Claim for fraud on the community
This is when one spouse is accused of unfairly or improperly disposing of community property. There are two types of fraud on the community: constructive fraud and actual fraud.
Constructive fraud is when there is a breach of fiduciary duty or waste. Here are a few examples:
- One spouse designates ex-spouse as beneficiary of life insurance policy he acquired while married to second spouse.
- Spouse dispersed $28,000 of community assets, three days after separating from spouse.
- Spouse used community funds to pay for extramarital affairs (trips, meals, gifts, etc.).
Actual fraud is much like common-law fraud in that there is intentional deception by one spouse against another. To prove actual fraud, the spouse asserting the claim must show the other spouse transferred community property or spent community funds for the primary purpose of depriving the other spouse of said property with dishonesty or an intent to deceive.
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