MANAGEMENT OF COMMUNITY PROPERTY

In my last few blogs I’ve been discussing the differences between community property and separate property.  The next question spouses often ask is what control do they have individually over property that they own together with their spouse.   Like most legal question the answer is “it depends”.

Under Texas law there are two types of community property: sole-management community property and joint management community property.  Sole-management community property is property that one spouse has the exclusive right to manage, control, and dispose of without the other spouse’s knowledge or consent.  The limits on a spouse’s use of sole management community property are that the spouse cannot fraudulently dispose of the other spouse’s one-half interest and the spouse owes the other a duty as a fiduciary to manage the property with the utmost good faith and fairness.  Generally, sole-management property is the community property that would have been that spouse’s separate property if it had been acquired while the spouse was single. Some common examples of sole-management community property are wages and employment benefits, revenue from separate property, and some types of damages recovered for personal injury suits.

Joint-management community property is property that both spouses must manage cooperatively with equal management rights.  Generally speaking, joint-management community property requires both spouses to give their consent to any transactions involving the transfer or encumbrance of joint management community property. However, spouses can give one spouse the power to unilaterally dispose of joint-management community property if done by written agreement or granting a power of attorney. Some common examples of joint-management community property are property purchased during the marriage with community property or community credit, community property held in the name of both spouses, and income and debts generated from community property.

If the spouses mix sole-management community property with joint-management community property, by using a common bank account for instance, the property becomes joint-management community property.  If one spouse takes on the role of independently running a piece of joint-management community property, like a community owned business, that property still remains joint-management community property.

While the issue of joint-management versus sole-management community property rarely comes up during a marriage, it can become an important issue if the spouses have separated or are in the process of getting a divorce.  If you are going through a separation or a divorce the status of management of the community property will be important in determining what you can and cannot do with the community property and what resources each spouse will have available to them while the divorce is pending.

 

WHAT IS SEPARATE PROPERTY?

When two people are married all the property the couple owns will be either community property or separate property.  In my last blog I gave an overview of what constitutes community property, so for this blog I wanted to complete the picture and provide some basic information on what is considered separate property.

Generally, speaking separate property is property that is wholly owned by only one member of the marriage.  Separate property can either be property that one spouse owned before they got married or it can be property one spouse received during the marriage by way of gift, devise (by will), or decent (by inheritance without a will).  Property is classified as either separate or community property at the moment it becomes the property of one of the spouses.  This is called the inception of title rule.  This straightforward rule can produce some confusing results.  For instance, income that is earned from a spouse’s separate property, like rental income for a house the spouse owned before marriage, is community property.  This is because that income was acquired by the couple during the marriage and thus meets the law’s definition of community property.

Once a piece of property is classified it will remain either separate or community property until the couple either divides the property through a post-nuptial agreement, a Court divides the property through a divorce, or a spouse makes a gift to the other spouse.  Under Texas law, all the property of both spouses is presumed to be community property.  That means if one spouse owns separate property, that spouse bears the burden of proving that the property is their sole separate property.  Proving that a particular piece of property is one spouse’s separate property often requires clear records for that property that go back to the time the property was acquired.  If you believe you own significant separate property and you are contemplating a divorce, it will be important for you seek the assistance of legal counsel to help you prove that your property is, and more importantly has remained, your separate property.

WHAT IS COMMUNITY PROPERTY?

Texas is known as a “community property” state.  Many people that come into my office and are thinking about divorce, have heard the term community property but don’t know what community property really means.

Generally speaking, community property is property that each member of the marriage owns an undivided interest in.  Both the wife and the husband have an equal ownership interest in a marriage. At the time a divorce is entered, this property must be divided between the parties and becomes each of the parties separate property.  Often times, couples believe that if they have separate bank accounts they still have separate property.  This however, is not the case.  This can be confusing because Texas law allows for a husband and a wife to exercise sole control of community property even though both spouses technically own the property.

Under Texas law, all property acquired during marriage is presumed to be community property.  Separate property is made up of the parties property they owned before the marriage or property they received during the marriage through gift, devise, or decent.  Thus, all property the couple owns is either separate or community property.  Additionally, community property can be solely controlled by either the husband or the wife, but this does not define if it is separate or community property.  What defines the properties statues is how and when the property was acquired.  For example if the husband, while married, takes the wages from his job and deposits them into a bank account solely in his name, that property is subject to his sole control.  However because that property was acquired during marriage and was not acquired by gift, decent, or devise it is considered community property that both the husband and wife hold an undivided ownership interest in. Even though the property came from the husband’s job, and it is kept in a bank account solely in the husband’s name, the property belongs to both the husband and his spouse as community property.

UNDERSTANDING COMMON VISITATION SCHEDULES FOR CHILDREN IN A DIVORCE

Many of my clients’ biggest concerns when contemplating divorce is what access to their children will be after the marriage ends.  The first thing I tell my clients is to not worry: provided there are no issues related to the children’s safety, the State of Texas wants a divorced parent to have enough access and be an involved parent.  If you want to be an involved parent, the law will support you and your ex-spouse, most likely, will not be able to prevent you from seeing your kids.  But how exactly does the law divide up the time with the Children?

In many cases the parties can come to an agreement on a specific schedule that works with their family and circumstances.  Texas Courts generally accept and approve a schedule of visitation that the parents create by agreement.  In cases where the parents cannot agree, the most common visitation schedule for the non-custodial parent is called the Standard Possession Order. It grants the non-custodial parent time with the child every Thursday evening during the school year, and the every first, third, and fifth weekend of each month beginning at 6:00 p.m. on Friday and ending at 6:00 p.m. on the following Sunday. In addition to these times, the non-custodial parent also has the children 30 days in the summer, a week during Christmas break, and alternating spring breaks and Thanksgivings.

For non-custodial parents that would like even more time with the children they can request the Court put them on Expanded Standard Possession Schedule. If awarded, the Expanded Standard Possession Schedule, the non custodial parent can elect to keep the children over night on Thursday and their weekend possession can be extended to the time school resumes Monday morning.  Expanded Standard also increases the time available for holidays.

Furthermore, if the non-custodial parent believes that even the Expanded Standard Possession schedule is not enough time with the children, that parent can negotiate an agreement for more time with the other parent or ask the Court for a schedule that divides the time with the children 50/50.  At the end of the day, it is important to understand that when choosing to get a divorce, it does not mean giving up a parents ability to have meaningful time with their children.

Calculating Child Support in Texas

Great Online Tool for Parents with Questions about Child Support

One of the most common issues I am contacted about is child support.  The question I am often asked is  “how much child support  will I have to pay?” or “how much child support will I receive?”.  Generally, speaking the amount of child support a Court will award follows a statutory formula.   The formula is based on the monthly net resources of the parent that will be paying child support,  the number of children that will be subject to the order for child support, and the number of other children the obligor has a duty to support.

The Texas Attorney General’s office has a useful online calculator where you can enter your specific earning information and family situation and it will estimate the amount of the monthly child support obligation.  It is a great tool to see if it might be time to ask for a modification of a current child support order or to have more information if you are thinking about asking for child support.

The Texas Attorney General’s office has a useful online calculator where you can enter your specific earning information and family situation and it will estimate the amount of the monthly child support obligation.  It is a great tool to see if it might be time to ask for a modification of a current child support order or to have more information if you are thinking about asking for child support.

Here is the link:

https://www.texasattorneygeneral.gov/cs/calculator/

 

How much will my divorce cost?

A common question from people considering divorce is how much getting divorce costs. The answer depends on several variables. Aside from attorney’s fees, there are court costs and filing fees to file an initial petition for divorce and other pleadings. Also, there’s a cost for using a process server to give notice to the responding spouse. Other fees may include court-ordered services such as parenting classes, mediator fees, or social-study fees.

Attorney’s fees are usually more than court costs and filing fees. Because most attorneys charge by the hour, the cost of the divorce depends on how much time and work the attorney has to spend on the case. In highly contested and disputed cases, attorney’s fees are typically very high because the attorney has to spend lots of time advocating for the client. On the other hand, if the parties work mainly by agreement with little work required from the attorney, the cost is much lower. Essentially the cost of attorney’s fees for your divorce will depend on how much you and your spouse want to fight with the assistance of legal counsel.

Medical Directives in Texas

A Medical Directive in Texas is a document that helps you communicate your end-of-life wishes while you are still competent and able to make such decisions.  During my practice, many individuals have stated that while they were comfortable making medical decisions for their loved ones under the loved one’s medical power of attorney, they were very thankful that when the time came to make decisions about whether or not to allow their loved one to live the rest of their life with artificial measures, such decision had already been made by their loved one via their Texas Medical Directive document.

When completing a Medical Directive in Texas, you are given certain scenarios wherein you are to decide if you want life sustaining treatment withheld and to be left to die peacefully or if you want life sustaining treatment administered.  The Texas legislature has provided certain definitions of which you need to be aware in order for you to make informed decisions about your end-of-life wishes.  Generally, it is a good idea to speak with an estate planning attorney about such language and definitions before signing such documentation as you want to make sure that your decisions are ones that are based upon your full knowledge and understanding of the medical terms used in such documents.

A Medical Directive in Texas is not only signed by you, but is also required to be notarized and signed before two witnesses that are not in anyway employed or connected to your treating physician or hospital facility.

Having a Medical Directive is not only wise in that you are being able to make sure that your end-of-life wishes are being carried out when you are unable to communicate such wishes yourself, it gives your loved ones peace of mind that they were not the ones that had to make such a gut-wrenching decision on your behalf.

How do Texas courts decide child custody issues?

The Best Interest of the Child, Not Moms versus Dads

One of the most common misconceptions which I encounter as a family law attorney in Texas is the idea that the law favors mothers over fathers in issues of child custody. Often, both mothers and fathers expect that Texas courts will automatically give a mother primary possession of children.  This belief, however, is misplaced.  In fact, Texas law forbids courts from considering the gender of the parents in deciding who will be awarded primary custody of a child.  See Tex. Fam. Code Sec. 153.003.

So, how do Texas courts decide child custody issues?  In determining which parent will be the child’s primary joint-managing conservator or sole-managing conservator, Texas courts will determine what would be in the “best interest of the child.”  See Tex. Fam. Code Sec. 153.002.  Of course, both parents often feel that it is in the child’s best interest that he or she be named the primary joint-conservator or the sole managing conservator.  For help in deciding which parent to choose, Texas courts will look at the facts of each case, and weigh what are known as the Holley factors—that is, (1) the desires of the child; (2) the emotional and physical needs of the child, now and in the future; (3) the emotional and physical danger to the child, now and in the future; (4) the parental abilities of the individuals seeking custody; (5) the programs available to assist those individuals; (6) the plans for the child by the parent and the individual seeking custody; (7) the stability of the home; (8) the parents’ acts or omissions which indicate that the existing parent-child relationship is not a proper one; and (9) any excuse for the parents’ acts or omissions.    See Holley v. Adams, 544 S.W.2d 367, 372 (Tex. 1976).

Importantly, how the Holley factors will stack up in any particular case is not determined by simply being either a mother or a father, but instead on the individual circumstances of the case.

Spousal Maintenance

When Jill wants Jack to financially support her after the divorce…

It’s a common tale. Jack and Jill went up the hill to fetch a pail of water. After the tumble down the hillside, they moved to Texas, fell in love, and got married. Ten years and many more spills later, Jack and Jill decide to divorce. Jill wants spousal maintenance. Jack wants to understand what it is and why he should pay it. Both need education on the topic before they break their crowns in frustration.

In a Texas divorce suit, the Court may order spousal maintenance to financially provide for a spouse who can’t sufficiently provide for herself. Under certain statutory provisions, either spouse can petition for spousal maintenance. Spousal maintenance is periodic payments from the future income of one spouse for the support of the other spouse (Texas Family Code § 8.001(1)). It is intended to provide limited support to spouses like Jill during the period of uncertainty and transition after the divorce. Although spousal maintenance was originally designed to protect long-term homemakers who had little or no income, it now also protects disabled spouses, spouses who care for disabled children, and spouses affected by family violence.

To be eligible to receive spousal maintenance, Jill must prove that she (1) is a spouse, (2) lacks sufficient property to provide for her minimum reasonable needs, and (3) has met one of the four statutory bases for spousal maintenance (i.e., ten-year marriage, family violence, disabled spouse, or disabled child) (Texas Family Code § 8.051).

In our tale, Jill easily meets two of these three elements: she is a spouse and was married to Jack for at least ten years. The final element is harder: Jill must prove that after the divorce she will lack sufficient property, including separate property, to provide for her minimum reasonable needs. The term “minimum reasonable needs” is not defined in the Texas Family Code, so the Court must use case-specific facts to determine those needs. The result varies couple to couple. Consequently, there is no correct way to present Jill’s minimum reasonable needs. It’s ultimately up to the Court’s discretion.

Some factors that the Court may consider in determining “minimum reasonable needs” include Jill’s list of monthly expenses, Jill’s education level and employment history, Jill’s employability and anticipated future income levels, Jill’s efforts to secure employment, and Jill’s need for medical or mental-health services and the associated costs.

Even if Jill gets a minimum-wage job or is well educated, she may still qualify for spousal maintenance. Also, the Court may consider the characteristics of Jill’s awarded community property and separate property when determining spousal maintenance. For instance, Jill may still qualify for spousal maintenance if she is awarded property in the divorce that is not easily liquidated, like a home, or has heavy tax implications and penalties to liquidate, like a retirement account.

The Court may also consider many other factors in determining maintenance. For example, the Court may consider Jill’s contribution as a homemaker. Additionally, marital misconduct is another possible factor. For instance, if Jack’s fling with Little Miss Muffet was a contributing factor in the breakup of Jack and Jill’s marriage, the Court may take that evidence into consideration too.

The duration of the spousal-maintenance payments typically is based on the number of years of the marriage. For couples who have been married for 10 to 19 years, like Jack & Jill, spousal maintenance is awarded for no more than five years. For couples who have been married for 20 to 29 years, spousal maintenance is awarded for no more than seven years. For couples who have been married for 30 years or longer, spousal maintenance is awarded for no more than ten years. There are exceptions to these time limits, including family violence issues and disability of either the spouse or a child of the marriage.

The amount of spousal maintenance ordered to be paid is statutorily capped. A Court may not order maintenance payments from Jack that equal more than 20% of his average monthly gross income. Monthly maintenance payments may not exceed $5,000.

Ultimately, Jill will have to prove to the Court why she needs spousal maintenance. In opposition, Jack will present arguments why Jill doesn’t need financial support. It will probably be a contentious hearing, and Jack & Jill will likely lament the day that they met tumbling down that faithful hill a decade prior.

If you find yourself in a spousal-maintenance dispute, don’t attempt this seemingly uphill battle alone. Have an experienced family-law advocate at your side who can help you present the best argument to Court that helps to protect your interests. Don’t fall down. Don’t break your crown. Be prepared.

 

What is a Durable Power of Attorney in Texas?

This question is one that is frequently asked in estate planning.  A durable power of attorney in Texas is a signed paper that allows you to give your right to make business and final decisions, either temporarily or permanently, for yourself, to another person if you are unable to make such decisions at that time either due to illness, disability or some sort of incapacity.  Such document will include, among other things, the name of the individual whom you are appointing as your agent, an alternate for such position, as well as a listing of what powers you are wanting to give your agent.  The durable power of attorney document requires your signature before a notary or someone else who is lawfully authorized to administer oaths.

One of the most important decisions when executing a durable power of attorney is determining whether or not the power of attorney is going to be effective immediately when executed or if the power of attorney is going to become effective on your disability or incapacity. In most instances in which someone picks the latter, a doctor of physician would have to certify you as disabled or incapacitated before your power of attorney could be used on your behalf.

Another important decision when executing your durable power of attorney is determining how broad or narrow the powers that are given to your agent should be.  Generally, giving broad powers is preferable as you never know what issues the power of attorney may have to deal with once they are working as your agent. However, should you give broad powers to your agent, you need to make sure that you have designated someone that you genuinely trust will make decisions in your best interest.  In my practice, I have encountered several individuals who mistakenly believe that because they have their mother or father’s durable power of attorney, thereby giving them access to their parents’ bank accounts, they can use such funds in the accounts for their own benefit.  Such beliefs are inaccurate and can subject the agent to potential criminal charges for such behavior in certain circumstances.

Once you have chosen your power of attorney and executed your Texas durable power of attorney document, it is a good idea to review your documents from time-to-time to make sure that you still believe that the person or persons you have chosen for such role(s) is still the best person for the job.  Durable powers of attorney should always be a part of an effective and well thought out estate plan.