Reimbursement Claims in Texas
What happens if a wife in a Houston divorce case owns a house for several years prior to the marriage with the deed in only her name and, during the marriage, mortgage payments continued to be made on the house? Perhaps her husband performed significant work on the house himself without receiving compensation for the work. If this marriage ends in divorce, how are these complex issues sorted out in terms of marital property division?
The Texas Family Code provides for a party, the husband in this example, to potentially bring a Texas reimbursement claim in situations such as this. In this situation, encountered often by divorce lawyers in Houston, the community property estate would have a reimbursement claim against the wife’s separate property estate.
If you want to explore your legal options regarding marital property and possible Texas reimbursement claims, call our Houston divorce lawyers today at (713) 221-9088 for a free case evaluation.
How Reimbursement Claims Work in a Texas Divorce
One of the most common claims in divorce cases is a Texas reimbursement claim by the community estate against a spouse’s separate estate. Other Texas reimbursement claims that can be made include: when the community benefits from one of the spouse’s separate property; when one spouse’s separate property benefits the other spouse’s separate property; or when one spouse’s separate property benefits the community.
In the example above, the wife’s house is most likely her separate property because she owned the house in fee simple before the marriage. The mere act of getting married generally does not change a separate property asset to a community property asset. (Although there are many actions that a party can take after marriage that can convert an asset from separate property to community, the act of getting married itself does not convert the asset).
The payments that were made on the house during the marriage are likely, but not necessarily, community property assets, if the funds were earned by either spouse during the marriage. Therefore, the couple’s community property estate could have a Texas reimbursement claim against the wife’s separate property estate for the value of the total mortgage payments made during the marriage.
If there is valid Texas reimbursement claim to the community, this money does not go directly to the husband, however. Rather, the money goes back to the community property estate, which is subject to a “just and right equitable division” by a Texas family law court.
A similar analysis would apply to the example with the value of the husband’s uncompensated work on the house. The Texas Family Code provides that the value of the time, toil, talent and effort (TTT&E) of a spouse belongs not to that spouse’s separate property estate, but rather the couple’s community property estate. The TTT&E spent by a spouse can be the basis of a claim for reimbursement by the community estate if:
· the spouse’s TTT&E is uncompensated or inadequately compensated; and
· the property is under the “control and direction” of the other spouse.
As this simple example of reimbursement shows, these issues can quickly lead to a high degree of complexity.