Maximizing your rights in the context of a divorce is the key to your success. When we are talking about the financial parts of a divorce it is especially critical to your success that you pay attention to the details of your case. These details may seem small but during the rest of your life, they can be quite significant. Today’s blog post from the Law Office of Bryan Fagan relates to maximizing your rights and how to handle reimbursement claims in your Texas divorce.
With any complex subject, it is normal to have questions about how to proceed. If you have any questions heading into your divorce, please do not hesitate to contact the Law Office of Bryan Fagan. Our attorneys understand the essential parts of a divorce and how to best guide you and your family during this process. We approach cases with the heart of a teacher and do not take for granted the responsibility entrusted to us.
A consultation with one of our attorneys can go a long way to helping you develop a winning strategy in your divorce. As the attorneys with the Law Office of Bryan Fagan will tell you: it is possible to wander into a divorce, but it is impossible to wander out of one. Either you will develop a strategy during the divorce, or you will take the time to have one as you begin the process. This can help you a great deal when it comes to motivation in preparing for your case. The effects of a reimbursement claim with the new divorce can be felt for years to come.
Property division and reimbursement claims in a Texas divorce
Texas is a community property state. This means that the state of Texas adheres to principles that treat marital property as community-owned. Community owned property essentially means that income or property acquired during the marriage is owned equally by you and your spouse. There is no distinction drawn between which one of you purchases the property or earned the income. For example, income earned at your work counts just as much in your spouse’s favor as it does in your own.
For many people going into a divorce this can be quite the shock. The presumption for most people is that the money you earn during the divorce is technically yours. Different states treat marital property differently. In Texas property is treated in what can be called an equitable manner. Simply put, do not expect any distinctions to be drawn during the divorce between your income and that of your spouse. The same thing goes for property and debts.
What does this mean regarding the subject of reimbursement? For one, it is possible in a divorce scenario to find yourself looking at a reimbursement claim. This can occur if a separate estate provides a benefit to the community estate. Or the community estate may be the one to benefit your or your spouse’s separate estates. As we are about to see diligent record-keeping is an important part of this process. The more thorough you can be when it comes to keeping track of your expenditures during the marriage the better off you will be.
When couples divorce a key consideration is the division of property
One of the two main areas of a divorce, along with child custody, is marital property division. Depending upon your specific circumstances the division of property in your case can be a huge factor for you to plan for. Many spouses enter marriage with relatively little property. In situations like that, most of your property would then be community property. Thus, it would be eligible for division in your divorce.
On the other hand, depending upon the timing of your marriage you may have entered the marriage with a significant amount of separate property. Being able to distinguish between separate and community property is essential for your success. When spouses can work together in these circumstances it often results in better outcomes for all parties involved. One of the great misnomers of the divorce process is that a family court judge will ultimately determine how your property is divided. This is not the case in most divorces.
Rather, spouses like yourself have ample opportunity to negotiate their way through a divorce. These negotiations occur both informally and formally. Informal divorce negotiations occur between you and your spouse. Attorneys may be used to assist in this process. However, these informal negotiations are an incredibly important part of your divorce. The other type of settlement negotiation has to do with formal negotiations within mediation.
What happens when one spouse uses separate property to benefit the community?
Let’s consider a hypothetical situation to illustrate an overarching point regarding reimbursement and divorce. Suppose that you came into your marriage with a substantial amount of separate property. You did not get married until your late 30s. Therefore, you had amassed a sizeable separate property this date with which you were quite generous with. To that end, you used your separate property to help build up your marital residence. That marital residence was purchased during the marriage and is Community property.
Unfortunately, you and your spouse are now getting a divorce. Since you have no children the focus of your case has been on the division of your property. In working with your attorney at the Law Office of Bryan Fagan you understand that designating property as community or separately owned is a major part of your case. You have spent a lot of time trying to organize your property in a way that allows you to negotiate well.
Fortunately for you, you took the time to organize your reimbursement expenses during the marriage. Therefore, you know that certain payments made to your community estate came from your separate property account. You can trace these payments quite easily. As a result, when it comes time now to assert your reimbursement rights you have the evidence to do so.
How to file a reimbursement claim
A reimbursement claim can be asserted in your petition for divorce. When you file for divorce, you would need to ask the court to reimburse you for any community funds used to benefit the separate property of your spouse. Or reimbursement can be sought for any of your separate property that was used to benefit the community estate. Using our example from earlier in this blog post you can look at your separate funds which were used to benefit the community estate.
Your marital residence is not just a home. Rather, you have a home and acreage which you have used to grow crops and lease out to farmers. As a result, there is a substantial amount of income producing property near to your home. Because so much benefit has occurred in the communities state you want to make sure that your separate estate receives reimbursement for all that positive financial development. Ensuring that you have all the information you need to present a reimbursement claim is essential for your success.
Likewise, if you are involved in a divorce but did not file the petition then you may file a counter petition which includes a reimbursement claim. A counter-petition has the same effect as a petition. The only difference is that it is the responding party who files the counter-petition. Talk with your attorney at the Law Office of Bryan Fagan to discover the benefits of filing a counter-petition. Without a counter petition having been filed, you are not able to make any request for relief independent of what your spouse has filed for.
Evidence necessary to assert a reimbursement claim
As you begin to prepare for your divorce it is important that you think through the issues of your case. When it comes to a potential reimbursement there is an increased need for you to have evidence that can substantiate your claim. With sizable separate and community estates, it is likely that there is some degree of reimbursement in your situation. However, you need to be prepared to back up those claims with evidence.
Direct evidence of reimbursement opportunities is not necessarily difficult to identify. In most cases, you can do so by tracing the funds used. For example, if you are alleging that your separate estate was utilized to benefit the community then you would need to show the source of those funds utilized. It may be that you set up an account to hold money that you received through an inheritance after your father died. Since inherited money is separate property in Texas you could use evidence of this to prove your reimbursement claim.
Finding the evidence is only half of the battle. The other half involves introducing, offering, and admitting into evidence during a trial. For this, having an experienced family law attorney is advisable. The last thing you want to encounter is a situation where you went through all the effort to collect evidence only to not be able to use it. Think of it like getting all dressed up and having no place to go. When you prepare your case diligently you want to reap the rewards of your preparation. For this, consider hiring an experienced family law attorney to take your case to the next level.
Spouse must prove that the contributions enhanced separate property value
Suppose that you believe that you have a reimbursement claim against your spouse in the divorce. Specifically, you are arguing that community property was utilized to benefit the separate property of your spouse. In this case, the separate property we are talking about is a classic car owned by your spouse. Since the vehicle was purchased prior to your marriage it counts as separate property. However, your spouse has always talked about how valuable the vehicle is. You also know that he used income earned during the marriage to fix the vehicle up and make modifications.
The question that you and your spouse need to ask yourselves is to what extent the vehicle is now more valuable than it was prior to your marriage. Much like real estate, the market for classic cars is not difficult to discern. There is certainly a market for buying and selling classic vehicles. You and your attorney would first need to determine the value of the vehicle at the time of your marriage. Let’s say that the value of the vehicle was $50,000 at the time you and your spouse married. It would follow, then, that the vehicle’s value must have increased beyond $50,000 for you to have a reimbursement claim.
Unfortunately, you and your attorney investigated the situation and determined that the vehicle increased in value only by $5000. Even more unfortunately for you, the community property put into the vehicle was more than that. What this means is that you do not have a claim for reimbursement. This is because the value of the vehicle went up only a negligible amount. Yes, you can assert a reimbursement claim based on an increasing value. However, you must be able to argue that the community funds used caused the negligible increase in the value.
How to collect evidence used to prove reimbursement
Collecting evidence in a reimbursement case is critical. Without evidence, you are not able to make successful claims for reimbursement. This is not to say that without evidence there are no reimbursable costs in your divorce. However, because the court requires evidence you must provide them with that. Attempting to do so on the morning of a trial is not a great idea. Not only does the opposing party need to have an opportunity to review your evidence but you need to make sure that the evidence you are submitting is thorough and complete.
For this reason, having an experienced family law attorney to help guide you during the case is critical to your success. Indeed, attorneys excel in circumstances where organization and attention to detail matter. This is not to say that you wouldn’t be able to necessarily come up with a plan to handle this circumstance on your own. However, part of the benefit of having an attorney is being able to rely upon that attorney for advice and perspective. Certainly, attorneys, such as those with the Law Office of Bryan Fagan, have the type of experience you need in difficult divorce scenarios.
Fortunately, in 2024, most of the evidence you would need to prove a reimbursement claim can be accessed digitally. While paper or documentary evidence is still relevant it is less so now than in decades before. Collecting evidence means going through accounts and looking out for a digital paper trail. The more accurate the records there are the more likely you are to have success in claiming reimbursement. Experienced family law attorneys know what they are looking for. This means that you have someone with experience guiding you and knowing what to look out for as you begin to build your reimbursement case.
Reimbursement claims are complex- finding help does not have to be
When it comes to reimbursement claims in Texas you have a range of options to consider. The more prepared you are to present evidence the more likely you are to be successful in making a reimbursement claim. Many people who get divorced do so without a plan. This is to their great detriment. The simple truth is that winning a reimbursement claim does not have to be complex. However, the more diligently you prepare the more likely you are to be successful.
The trouble with reimbursement claims is that they can oftentimes get caught up in the details of the other areas of your case. Specifically, if a spouse encounters problems in other areas of their case the reimbursement claim may be swept under the rug. Considering how substantial your reimbursement claim may be this is not good for your long-term future. You deserve to have all your potential claims explored in full during the divorce. Having an experienced family law attorney to help guide you can potentially be a major advantage for you.
Thank you for joining us today on the blog for the Law Office of Bryan Fagan. Our experienced family law attorneys post unique and informative content about the world of Texas family law seven days a week. If you have questions about the material that you have read today, please do not hesitate to reach out to us. Our attorneys know what it takes to help you win in your family law case. We take pride in serving our clients and do so for their benefit and that of their families.
Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan
The attorneys with the Law Office of Bryan Fagan offer free of charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas family law. Before signing a document or negotiating on a subject you do not know well, contact our office. We look forward to the opportunity of serving you during an important part of your life. The Law Office of Bryan Fagan is on your side.