Dallas Divorce Law Blog by Michelle O'Neil

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.

There seems to be an increase recently in Dallas divorces involving elderly people.  As an attorney, I’ve seen a couple of cases recently where elderly folks are getting divorced and their children get involved in the divorce.  These situations are sad, particularly when one of the spouses is suffering from dementia or other disorders that inhibits his or her ability to make decisions for him or herself.  Frequently the adult children will get involved in the divorce and take sides.  Money is often the main source of disagreement involving the adult children.

See this article from the Dallas Morning News about a couple in Ellis County, Texas.  There, the adult children asked the Ellis County divorce judge to allow them to have custody of their elderly father and sue his new wife for divorce.  The Judge found that the elderly man, although he had the beginnings of dementia, seemed to have a good grasp on what was going on.  The man said he loved his new wife and didn’t want a divorce, and he didn’t mind her spending habits.  The adult children were concerned because the size of his estate had been depleted significantly.  The case remains pending and the Judge has ordered an evaluation of the elderly man’s ability to comprehend the proceedings.

Another question I get frequently from potential clients:  What is the difference between a contested divorce and an uncontested divorce?

Answer:  The difference between a “contested” and “uncontested” divorce is generally a matter of how much time your attorney will have to spend analyzing the issues and contemplating the fairness of the settlement.

Before the wedding, the couple may make a pre-marital agreement (commonly known as a “prenuptial agreement” or an “antenuptial agreement”) that spells out who owns specific property in the event of a death or divorce.

The spouses may also create a post-marital agreement any time during the course of the marriage, as long as the agreement was not created in an attempt to defraud current creditors. A post-marital agreement might also change the status of property acquired in the future.

Both pre- and post-marital agreements must be in writing and signed willingly by both spouses. It is difficult to change the terms of these agreements when enforced at the time of divorce.

PROVING SEPARATE PROPERTY

If a spouse wants to keep certain property after the divorce, it must be proven in court that it should be considered separate property. That determination (also referred to as the “inception of title” rule) is usually made according to when the item was purchased. The simplest way to prove this is to produce a title or receipt that shows the purchase date was prior to the marriage.

Also, if clear and convincing evidence is presented, assets purchased during the marriage using separate property funds can also be considered as separate property. The courts refer to this as “tracing.”

Don’t just take for granted that your spouse “knows” that such-and-such was your’s before the marriage.  If you do not prove the separate property nature of the asset, it will be presumed to be community property and subject to division in the divorce.  This is where a document trail is very valuable.  Show, for example, where your house was purchased before the marriage using deed record.  Or, provide a will and transfer documents to prove that a bank account holds only money received as inheritance when your mother died.  If you got a piece of jewelry as a Christmas gift, show a picture of opening the gift Christmas morning.

More than likely, each spouse entered into the marriage with personal assets. Just as likely, once married, the spouses accumulated joint assets including money, real estate, personal property such as cars and investments, and even debt. How to properly and fairly divide this property can turn even the most amicable divorce into a bitter battle.

Texas, along with California, Louisiana and a handful of other states, use a “community property” system of property division, which was derived from Spanish law. Other states follow an English law tradition.

So what does it mean when we say Texas is a community property state? It means that a court can divide the community property between the spouses, but cannot divide separate property.

Separate property is something one person (1) owned before the marriage; (2) individually received during the marriage by gift or inheritance; or (3) in some circumstances, money received in a personal injuries lawsuit during the marriage (except for lost earning capacity.) Community property is everything other than separate property.

There is a presumption that all property owned at the time of divorce is community property. If either spouse insists that certain property is separate property, it is up to that person to prove their claim in court.

However, not every case has to go before a judge for asset division. After filing for divorce, the spouses are free to agree to divide their assets any way they see fit. They can even split their personal property or agree to pay alimony on their own.

After a decision is reached, whether by settlement or trial, a divorce decree is entered. This is the court order the judge signs finalizing the divorce.  It is usually a lengthy document that formalizes and finalizes all of the provisions of the divorce – including issues of property division and child custody. The decree must be drafted very carefully, because, once entered, this agreement will become the rules by which you must live.  It is hard to forsee in the future every issue that may arise based on wording in the decree.  But, careful consideration must be given to the specific wording of the provisions in the decree to avoid future problems.

TRIAL OR SETTLEMENT

Not all divorce cases go to trial. First, after pretrial discovery is over, the spouses will probably be order to go into mediation. Mediation is a procedure where the parties and their attorneys meet with a neutral third-party (usually an experienced family lawyer) to try and negotiate a settlement. The vast majority of all family law cases are settled prior to trial.

If settlement is not possible, the case will go to a judge or jury. Either party has the right to request a jury trial.

Texas is the only state that continues to allow jury trials to determine child custody. A jury trial may also be held on other issues like character and value of marital property. If a jury is not requested or allowed, then the judge decides the contested issues.