Dallas Divorce Law Blog by The May Firm

In a July 31, 2009 opinion by the Dallas Court of Appeals, it was confirmed that Federal law trumps Texas law when it comes to income tax issues.  In In re S.L.M., the mother brought child custody proceedings against father.  The district court appointed mother and father as joint managing conservators and awarded mother the right to claim the children as exemptions on her federal income tax return. On appeal, father contended the district court erred in awarding mother the right to claim the two children as tax exemptions.  In re S.L.M., ___ S.W.3d ___, No. 05-08-01277-CV, 2009 WL 2343264 (Tex. App. – Dallas July 31, 2009, no pet. h.).

The Dallas Court of Appeals held the district court erred in awarding mother the exemption rights and examined tax exemptions under the United States Internal Revenue Code.  In computing taxable income, a taxpayer is permitted to claim dependents as exemptions and the exemption is awarded to the custodial parent as the parent having custody of the child for the greater portion of the calendar year.  Id. at Sect. 152(e)(4).

When applying the pertinent provisions of the tax code to the facts, the court determined that father had greater periods of possession that mother and as such, should have the right to count the children as exemptions on his tax return.  As a Dallas divorce lawyer it is important to stay on top of not only family law developments but developments in other areas that impact family law.

Well, we survived another tax year.  Hopefully everyone got their returns in on time and the process was relatively painless.   For our readers who were recently divorced, its important to ensure the name on your tax return matches the name registered with the Social Security Administration (“SSA”).

After a divorce, it is important for the taxpayer to contact the SSA to change their last name.  Although standing in line at the SSA is never a pleasant experience, you can reduce your time in line by downloading and completing the appropriate form to change your last name here.  Once the taxpayer turns in the form, the SSA it takes about two weeks for the the change to be completed.  If a taxpayer submits a return with a name that does not match the SSA records, the return will be rejected.

For a good overview of divorce tax tips, check out Sharon Drew and Gregg Herman’s Ten Divorce Tax Tips.

Finally, check out Cary & Lipponcott’s blog post on tax issues presented on spousal maintenance ordered by a Texas court.

A growing number of Tarrant County residents are choosing to see their divorces through without the aid of an attorney, the Fort Worth Star Telegram reports. According to the newspaper, the number of pro se filers in divorce cases is up eight percent from 2004 to 2008. Attorneys say that while do-it-yourself litigants may cost them some business initially, they often make up the difference in correcting faulty pro se forms.  Steve Campbell, Ft. Worth Star Telegram  04/20/2009

The Texas Supreme Court reversed a contempt finding in a Denton County divorce recently.  In In re Coppock, the parties entered into an agreed divorce decree that prohibited using coarse or offensive language in communicating with the opposing spouse.  This provision was contained in some general provisions of the decree, but did not include any injunctive language.

The ex-wife was found to have violated that provision 84 times by sending caustic emails to her ex-husband where she made fun of his weight, belittles his finances, mocked his ability in bed, and dismissed his new wife as “trailer trash”.  Former Judge Vickie Issacks found the ex-wife in contempt and sentenced her to jail.  The sentence required three consecutive 180-day terms, which would be waived if she reported for 4 nights in jail and paid the ex-husband’s attorneys fees.

The Texas Supreme Court held that the contempt order is void because the underlying order did not directly command action sufficient to be enforced by contempt.  Further, the Court held the provision of the decree did not clearly state it was an order of the court instead of an agreement of the parties because it did not contain “decretal” language (e.g., “IT IS ORDERED…”) and was not in the injunction section of the decree.  As such, the Court found it to be an agreement of the parties and therefore only enforceable as a contract.

Interestingly, the Texas Supreme Court cites to In re Dupree, a case I won on writ of habeas corpus out of the Dallas court of appeals.  It is unusual for the Texas Supreme Court to cite to a case as authoritative out of the court of appeals level.  This means that the Texas Supreme Court has accepted the Dupree case as authoritative. 

The ex-wife also asserted certain First Amendment challenges that the provisions of the decree unlawfully restrained her right of free speech.  However, since she did not make those challenges in the trial court, the ex-husband argued those were waived.  The Court did not reach the constitutional arguments because it held the contempt order void for other reasons.

So the writ of habeas corpus was granted and the ex-wife was released from confinement.

Note, Texas divorce lawyers utilize similar orders, called the Standing Order in most counties, in virtually every pending divorce in Texas.  (Click for Denton County Standing Order, Collin County Standing Order or Dallas County Standing Order.) This case may lessen the enforceability of those provisions, even though the Coppock case dealt with a final order and those frequently are found in temporary orders. 

The State Bar of Texas Family Law section plans to ask lawmakers to repeal a portion of the Texas Family Code governing reimbursement to a spouse for community property spent on the separate real property of the other spouse.  Critics of the law say it leaves too little discretion to trial judges to decide redistribution of assets in divorces.  Most agree that the 2002 law was a good idea that proved too difficult in practice.

Divorce has become the most recent victim of plummeting home values, says the New York Times in its article Breaking Up Is Harder To Do After Housing Fall.  Nearly 20% of homes are now worth less than the mortgages owed on them. Where couples once fought over who would keep the house, they now bicker over who will continue to pay for it.  As a result, divorce has become more complicated and often more expensive with lower prospects for a money outcome.  Some divorce lawyers say that some clients are electing to stay together because there are few assets left to help them start over.

In a normal economy, couples typically build equity in their homes, then divide that equity in a divorce, either after selling the house or with one partner buying out the other partner’s share.  But now, more couples own houses that neither spouse can afford to maintain and they cannot sell for what they owe. 

In the Dallas Texas divorce arena, we have been spared the worst of the housing bust, but our house values are, by most accounts, remaining stagnant.  That still creates the problems mentioned in the article in that houses are not the major cash-cow asset they once were.

It’s all over the news today (here and here and here) about a New York surgeon who’s getting a divorce from his wife and asking for the kidney back that he donated to her.  He gave her a kidney in 2001 and 18 months later, the husband claims, she’s taking his kidney out with another man.  Divorce ensues.  Custody issues abound… regarding their three kids.  Then Husband sues to get his kidney back… oh, or he’ll take $1.5 Million in lieu of the kidney.

Divorce lawyers in Dallas as well as nationally agree that he’ll probably be unsuccessful in his efforts.  “The kidney is a gift, which, under Texas law, would be the wife’s separate property,” says 17-year family law specialist Michelle May O’Neil.  “The affair certainly entitles the Husband to a divorce, and he may get an unequal division of the property in his favor because the Wife is a bad actor in the relationship, but he won’t win the lottery as a result.”  Husband should have thought about that possibilty before he parted with the organ.

Even so, it makes for good fodder for news media coverage.

January is the top month for divorce according to a Scripps Howard News Service report.  Dallas and Collin county divorce lawyer Michelle May O’Neil reports the same trend locally that lawyers report nationally. Potential reasons behind the beginning-of-the-year rise in the number of divorces vary from a desire to maintain the family stability through the holidays to a desire among some couples to start fresh in the new year. While some may consider divorce a chance at a new beginning, the report notes that significant feelings of loss are common among divorcing couples and their children.  Trying to find the right time for the hefty decision is a difficult challenge and there may never be a perfect moment.

Corpus Christi Caller Times, January is Top Month For Divorce

For high net worth clients, now may be an optimum time to get a divorce, especially in the Dallas Texas area.  A down economy and devalued assets benefits the monied-spouse in a divorce.  The decline in house values means that the ratio of equity to debt is lower and the asset division is lower as well.  The same goes with division of retirement or brokerage accounts that hold stock or bonds.   The overall value of those accounts is lower, resulting in a smaller overall division of the estate.  Where once a monied spouse might offer the other spouse a cash buyout, more frequently Dallas divorce attorneys are seeing divisions in-kind, where the spouses share equally in the losses.

On the other hand, now may not be so good to get divorced if you are the non-monied spouse.  Frequently the non-monied spouse will suffer a decrease in overall economic stability as a result of a divorce, even in a good economy.  Now, in this bad economy, keeping the marriage together until the economy recovers might be a good financial plan.

Dallas Divorce Lawyers note a similar trend to that in a recent Newsweek article.  Newsweek point to a trend nationally where divorcing couples are sharing equal time with their children as well as joint decision making.  The “standard” orders in a Dallas divorce involves parents making shared decisions regarding their children (such as what school they will attend or when to get braces) but the children live primarily with one parent and spend time with the other parent according to the Texas Standard Possession Schedule (current version 2008).  Increasingly, divorcing parents who are able to get along and co-parent their children are turning to a more equal possession schedule, such as a week-on/week-off type arrangement.  These arrangements work well as long as parents live close together, preferably in the same school district, and get along well enough to collaborate on homework, activities, and such things.  Parents who argue or cannot communicate do not do well with this type of arrangement.