Monday, April 30, 2007

Dividing Marital Property In a Texas Divorce- Club Memberships

Courts cannot divest a spouse from membership in an organization such as country clubs and other groups and award it to the other spouse. Cluck v. Cluck, 647 SW2d 338:

“Since the membership stock has a contingent redeemable value of $1,000.00, the trial court could and did take into consideration this as an asset of the community in dividing the community estate of the parties. However, we are of the opinion that the trial court had no authority to divest the appellee of membership in the club. We view the stock certificate as merely an indicia of the right to membership analogous to a membership card in any voluntary association, and personal only to the appellant. Courts have been reluctant to interfere with the internal management of a voluntary association.”

However, the courts can value the memberships and reapportion the division of the estate to take the value of memberships into account.

Friday, April 27, 2007

Staying Married for the Sake of The Children

If staying married for the sake of the children is the only thing keeping your marriage together, you should consider divorce. The children are affected by the bad feelings between you and your spouse. A “cold war” truce that produces a loveless household is no atmosphere to raise your children in.

However, there may be other reasons you want to continue to live together such as social and economic. Some couples live separate lives under the same roof and get a divorce only after all the children are out of the house.

If you have not already done so, you should seek professional help such as a marriage counselor. Sometimes people think they have done everything they can to save a marriage. But a professional may be able to point you to new solutions you have not thought of.

If you have truly tried every avenue to keep your relationship alive, and there really is no hope for a happy marriage, then you should confront this situation squarely and deal with it. Life is too short to be living in a joyless house. Divorce is not a pleasant process, but it is often a healing one. The divorce will be difficult for the children, but social studies have borne out the fact that most kids do adjust and wind up doing just fine.

Monday, April 23, 2007

Texas House Bill 180 on "Covenant Marriage"

House Bill 180 by Rep. Bill Zedler (Arlington), the “covenant marriage” bill, is scheduled for debate by the full House of Representatives on Tuesday, April 24th.

The bill is extremely poorly drafted and does not address numerous issues that must be addressed to successfully implement a new kind of marriage.

Please call your Texas House member’s office Monday or before noon on Tuesday. Ask for the aide who works on family law issues, specify the bill and state your views.

Click here to find out who represents you and their contact information.

Sunday, April 22, 2007

Dividing Marital Property In a Texas Divorce- Separate Property

It is well established that the court cannot divest a party of their separate property- see Cameron v. Cameron, 641 SW2d 210; and Eggemeyer v. Eggemeyer, 554 SW2d 137.

However, the court may award the use of separate property to the non-owner spouse for a limited time and for a defined purpose, see Gerami v. Gerami, 666 SW2d 241.

A husband’s separate property which was the parties’ homestead can be set aside to the wife for the use and benefit of the children while they are minors.

In Smith v. Rabago, 672 SW2d 38, the court held that a husband’s separate property homestead may be awarded to the wife for her use and occupancy.

The court cannot order separate property sold except in very narrow circumstances such as when the community has a lien on the separate property to secure a claim for reimbursement. In Halamaka v. Halamaka, 799 SW2d351, it was held that where a husband and wife each owned a ½ undivided separate property interest in real property, the divorce court would have authority to consider a partition suit with the divorce suit and order a partition and sale where the property could not be divided in kind.

Saturday, April 21, 2007

Frozen Embryo Custody- The Man's Perspective

Here is a story from The Daily Mail (UK) which presents the often unheard perspective in the frozen embryo custody debate- the sperm donor and his struggle for his right to not become a biological father.

Howard Johnston’s relief is palpable. For five years he has been on tenterhooks, nervously waiting for the final ruling on whether his former fiancee should be allowed to make him an unwilling father in order to fulfil her dream of becoming a mother.

This week, his wait finally came to an end as 35-year-old Natallie Evans was told she could not use the six fertilised embryos she and Howard had had frozen in 2001 shortly before the cancer treatment that left her infertile.

The Grand Chamber of the European Court of Human Rights, her last legal option, ruled unanimously that she could not use the embryos without Howard’s consent – which he had withdrawn when they split up in 2002.

For Howard, 30, the ruling means that he can put the trauma of being publicly branded a baby killer behind him and move on with his life.

But he insists that the implications of the decision reach far beyond his personal rights – and go right to the heart of what it means to be a father in today’s society.

In his first newspaper interview since the historic judgment, Howard, a successful IT consultant, says: “Had the European Court of Human Rights supported Natallie’s claim that she has the right to motherhood whether I consented or not, it would have effectively cut men out of the process altogether.

“I believe very strongly that men should not be used as sperm donors to father children without their permission. The idea that men may one day become virtually irrelevant in the creation of life – as some suggest they could and even should – is abhorrent to me.

“A father has as important a part to play in a child’s life as a mother so his rights should be the same. That the law was upheld gives me hope that the importance of a man’s consent in conception will be safeguarded in the future.’

Since he withdrew his consent for the embryos to be used, Howard, from Cheltenham, Gloucestershire, has been vilified in some quarters for heartlessly denying his former fiancee her last chance to become a mother.

But he insists that his unwavering refusal to give in to her repeated pleas was borne of his strong sense of what the role of a father should involve and that the scenario Natallie was proposing would betray those principles.

“I have attracted negative comments because I have fought for what I believe in. Just yesterday, a woman called me at home and told me that what I had failed to understand was that those six embryos were human beings that had been offered the chance of life but I had destroyed it. It was very disturbing.

“I’ve had to live with going through this in public and it has been incredibly stressful. I’ve tried to put it to the back of my mind but every day I’ve thought about it and worried that eventually Natallie might have been allowed to go ahead and bring a child of mine into the world against all my wishes.

“But my stance has always been about the welfare of the child. To me the bedrock of any decision over whether to go through the process of using embryos to try to have a baby should be two people who are united. The law requires both partners’ consent and to me that makes absolute sense.

“Natallie wanted to have my child and bring it up with her new partner without any involvement from me but I have never been able to contemplate that.

“I would have known he was mine and constantly thought about him. That child would have known he wasn’t wanted by his father, and what impact would that have had on his life?
“And it would have been my name on the birth certificate so what would have stopped Natallie approaching me ten years down the line for financial help?”

Howard is an intelligent and fiercely rational man and it has been all too easy for him to be portrayed as cold. He says this is far from the truth.

“The friends I’ve had for many years know me as a very sociable, positive guy who loves going out and writing music.

But they also know that although I’ve tried not to change as a result of the court case, it has been very hard at times for me to carry on my life as normal.

“Whenever I meet new people, I’m always worried about what their reaction to me will be: will they think I’m a callous person?

Everyone has seen my ex-girlfriend on TV, pleading with me in extremely emotional terms and I know it must have affected people’s views of me. I’ve had very difficult times but my friends and family have been very supportive.’

Natallie has found love with new partner Dave Richardson, a cable jointer, but Howard has not had a serious girlfriend since their relationship ended.

He says: “I haven’t met anyone I have wanted to become serious with. I hope that if I met someone I really liked I wouldn’t be held back by the past.”

He hopes to be a father one day and envisages himself giving his children the kind of stable upbringing his parents Andy and Fiona gave him and his older sister.

“There’s so much more to being a father than just the biological or financial aspect. I see myself being involved in every aspect of the child’s upbringing – teaching him to read, shaping his life. I want to be a real father or not at all.”

Ironically it was not so long ago that Howard envisaged creating such a happy, stable family with Natallie.

They met in 1999 when they were working in a call centre for Virgin Mobile in Melksham, Wiltshire.

They fell in love and moved in together, despite their different backgrounds – Howard, then 22, was the Sherborne educated, university graduate son of a retired Merchant Navy officer while Natallie, five years his senior, was twice divorced and had grown up on a council estate.

In June 2001, Howard proposed to Natallie under the Eiffel Tower – with a diamond solitaire ring.

Natallie has claimed that at this stage they were trying for a baby. When she failed to conceive the couple were referred to the Bath Centre for Assisted Reproduction.

Howard says: “I thought we were there to get to the bottom of whether something was the matter with Natallie, not to help us have a baby. I was in my twenties and had no intention of becoming a father then. It was a question of Natallie’s health to me.”

In October 2001, the couple were told that pre-cancerous tumours discovered on Natallie’s ovaries would have to be removed.

It was then that they decided to freeze the embryos, though Howard says: “I wasn’t really thinking about babies at that point – just that the woman I loved might not survive.”

But after the operation, Howard says, Natallie fell into depression and became very difficult to live with.

“She kept telling me she didn’t feel like a real woman any more. She became incredibly possessive and, in the end, I couldn’t handle it any more and left.”

A month after they split, the clinic told both parties that since Howard had withdrawn consent, the embryos would be destroyed.

Howard says Natallie sent him a text message saying: “You are going to pay for this. Your name is going to be all over the papers.”

Since then the case has been heard by the High Court, the UK Court of Appeal and the European Court of Human Rights. Now Howard hopes both he and Natallie can move on.

“I hope Natallie does go on to become a mother because it is what she has always dreamed of. We talked about other options such as adoption or having a baby from donor eggs. She told me she could love any child as her own.

“I don’t hate her – part of me feels sorry for her. Now I just want it all to be over so I can get on with my life.”

Dividing Marital Property In a Texas Divorce- The General Rule and Tax Affection

Texas Family Code 7.001 details the way that community property is divided in Texas. It will be divided in a “just and right manner, having due regard for the rights of each party and any children of the marriage.”

Many people assume that because the community property is owned equally, then it will be divided equally upon divorce. However, 7.001 expressly provides that this is not the case. Unequal shares are often awarded by the courts based on factors that have been developed over time by case law.

In 2005, a new section was added to the Texas Family code which provides that in dividing the marital assets the courts can specifically consider the effect taxes will have on the division.
7.008 Consideration of Taxes
In ordering the division of the estate of the parties to a suite for dissolution of a marriage, the court may consider:
(1) whether a specific asset will be subject to taxation; andif the asset will be subject to taxation, when the tax will be required to be paid.

Thursday, April 19, 2007

Dividing Property In a Texas Divorce- Intrinsic Value

"Intrinsic value" is what the property or business is worth to the owner. In cases in which the particular property has little marketabilty, or if the owner has special knowledge that is hard to replace by a buyer, Texas law does permit the consideration of what the property or business is worth to the owner. Inman v. Parr, 311 SW2d 658; Howell v. Bowden, 368 SW2d 842; and Beavers v. Beavers, 675 SW2d 296.

The use of interinsic value is usually restricted to situations in which the court is trying to determine the value of a professional services business which has little to value in the way of tangible assets, but has "intrinsic value" to the owner.

One method used to determine "intrinisic value" is to calculate how much a buyer would have to invest to produce the same income as the current owner.

Wednesday, April 18, 2007

Valuing Property In a Texas Divorce

Although appraisers and valuation experts may be used to determine how much property is worth, spouses are generally qualified to testify about the value of property in which they have an ownership interest. Barstow v. Jackson, 429 SW2d 537.

Property is valued at the "fair market" value. This is defined as the price a willing buyer, would pay for the property in it's current condition at the time of trial. I often refer to this as the "yard sale" value- that is, what could you get for a particular piece of property if you put it on your front lawn with a "for sale" sign on it.

Some assets are very difficult for a non-expert to value such as:
  • present value of future interests (such as annuities or pension plans);

  • small family businesses and closely held businesses;
  • goodwill

Coming up with a dollar figure for these type of intangibles can be very difficult, and often times experts themselves value these very differently. In these cases, there is often a "battle of the experts" that is waged and the judge must judge the weight of the evidence based on the credibility of the experts.

Tuesday, April 10, 2007

Texas Covenant Marriages and Crisis Marriage Education Courses- Two Stinkbomb Family Law Bills from Austin

There is bad air coming from Austin in the form of two stink bomb family law bills.

HB 180 is before the Texas legislature to create something called a "covenant marriage". Parties who enter into this special uber-marriage can not file for a divorce unless they first go to counseling.

Sounds innocuous enough, but here is the kicker: either the counselor or one spouse could forever keep the other spouse from EVER filing for a divorce. All they have to say is that the marriage is "salvageable" (whatever that means). This is simple blackmail. To say nothing of the increased costs of getting a divorce this counseling would create, think of the nightmare scenario of an abusive spouse having complete veto power over an abuse victim's ability to even file for divorce simply by saying he thinks the marriage is "salvageable". Sure, the counselor could give permission to file for divorce, but under this bill, the counseling is without any time limit, and as long as they are getting paid, why would a counselor end steady work?

And what kind of person would ever voluntarily enter into a "coventant marriage" with such negative consequences? The same type who enter into garden variety bad marriages everyday - those who thought it was a good idea at the time.

Another lousy bill up for consideration is HB 2684 which would require parties to wait two years (TWO YEARS!) after filing before they can finalize a divorce. Under this bill, there would only be three ways to avoid being committed to this bleak divorce limbo/hell. One would be to attend a ten hour "crisis marriage education course". The cost of such a course could easily be in the thousands and would likely not be available in all counties.

Another would be to file divorce "for cause" such as adultery. What will happen as a result? We will be taking a step backwards into the bad old days before no-fault divorce when people lied in court about fake cruelty or adultery just so they can get a divorce. Naturally the other party will have to hire a lawyer to protect themselves and mitigate the possibility that these lies will result in a judge awarding more property to the other, or perhaps taking their children away. The net result of the bill is not only that the pain and cost of divorce will be increased, but also that one or both parties are unfairly going to get their reputation dragged through the mud on public record or even possibly face criminal charges because of these "necessary lies". In addition, it will be harder for victims of domestic violence to get out of bad marriages.

The final way would be if one party obtained a protective order. Already there are some unscrupulous parties who will file false protective orders to gain an advantage in a divorce. No doubt you will see a ten-fold increase of false statements of domestic abuse to avoid the bureaucratic red tape put up if this bill passes. Not only would this be devastating to innocent parties falsely accused, but such "cry wolf" tactics could desensitize family law judges to the point where they might turn down protective orders when they are really justified.

For a good article by The Texas Observer on HB 180, click HERE.

These bills represent wrong-brained thinking about the source of the problem of increased divorce in this country and an artless solution that totally misses the mark. The bill may go to vote this week or next. All readers are encourage to call their representative in the Texas Legislature and tell them to vote against this bad bill before it becomes bad law.

Saturday, April 07, 2007

Finding Property

The first step in any property division is first locating the property that might be out there.
Remember that in Texas property is either characterized as separate or community. If it is community, it is subject to division of the court and therefore should be identified so the court can divide it. If it is separate it will still need to be identified so that the court can formally declare it as separate property. Without a separate property finding by the court, the particular item- be it your dear departed aunt Sally's china or the stocks your purchased prior to marriage could be still at risk of being awarded to your former spouse. This is because most decrees of divorce contain a clause that any property not disclosed will be subject to future division of the court.
At the beginning of a case in which it looks like lot of property issues will be involved, it is a good idea to start a property file. it will contain cover sheets of financial statements, health insurance, insurance policies, deeds, employee benefits, 401(k) statements, brokerage accounts, etc. This will provide a good start in drafting a preliminary spreadsheet of what property exists and where to begin digging deeper.
It is generally a bad move to try to conceal property during a divorce. If there is a doubt that one of the parties are not being voluntarily forthcoming in disclosing all the property that exists, any divorce lawyer worth his or her money will use pre-trial discovery to uncover the truth of what exists. This can include reviewing of all financial records including bank deposits, tax returns, accounting books, deposit slips etc. In addition, parties generally must exchange Inventories and Appraisements, which are sworn statements that detail all property of the parties whether they are of a community or a separate nature. If it later turns out that one of the parties was intentionally not being truthful, the judge or jury can punish that party by rendering awards of property that grant most of the property to the innocent party. This is in addition to the possibility of being charged for perjury and false swearing.