5 Important Rules About Separate Property in Texas
February 13, 2020
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One of the common issues that arise in a divorce in Texas is the characterization of property. Most people know that Texas is a community property state. Many people also assume that all community property has to be divided equally in the event of a divorce. However, property can be community, separate, quasi-community or mixed character, depending on when and how it was acquired. The name in which an asset is titled does not, by itself, determine whether that asset, or liability, is community or separate.
For example, I have people all the time say, “that’s his car because he put it in his name.” We always have to go back and ask the client to explain when, and how, it was acquired. Texas follows an inception of title rule. This says that if a piece of property is acquired during the marriage, it is presumed to be community property regardless of how it’s titled.
It is presumed that any property on hand at the time of divorce is community property. The spouse who is claiming an asset as his/her separate property has the burden of proving that claim by clear and convincing evidence.
If one of spouses is claiming that an asset is separate or mixed character property, they have the burden of showing that the source of funds used to purchase that asset were from some source that would be deemed separate property. This could be an inheritance, or a gift, or monies that they had prior to marriage.
It is the burden of the person claiming it as separate property to prove that the asset actually should be considered separate property. They must present clear and convincing evidence. This is somewhere in between a reasonable doubt and a preponderance of the evidence. It’s a little bit higher burden than we typically have in civil cases.
Even if you owned the property beforehand, unless you are able to prove that you owned it and that no community funds have gone into it, there is a significant likelihood that it will be deemed to be community property.
This happens when people have a bank account. They keep the same bank account during the marriage, and then they add their paychecks to it. It can become so commingled that you can no longer prove the portion that’s your separate property.
A piece of real estate that is acquired prior to the marriage is pretty easy to prove as separate property. You simply show when you got the title. If it was prior to marriage, it’s your separate property. Although there might be reimbursement claims if community funds were spent on that property during the marriage, the character of the property will be separate under the inception of title doctrine. Just be careful if you refinance that property during the marriage. Putting your spouse’s name on the property during the marriage could give your spouse a 50% interest in that real estate if your spouse argues it was a gift to them.
Sometimes I see situations where people bought a house during their marriage. For some reason, they only have it in one spouse’s name. That by itself does not make it that spouse’s separate property. If it was bought during the marriage, it is presumed to be community property. This is regardless of how the title is held, because it was acquired during the marriage. If the spouse whose name it’s in says, “well you know I used the $100,000 I inherited from Grandma to buy that,” it is their burden to show proof of what portion of that property is their separate property.
Proving separate property claims during a divorce requires good record keeping. The challenge for many couples is that they had not planned to get a divorce and they have commingled their estate and assets so that everything is community property. Which takes us back to Rule # 1 that all property is presumed to be community property… unless proven otherwise.
The Child Centered Divorce: What Divorcing Parents Need to Know
February 13, 2020
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When divorce is imminent and two parents want to legally divide their lives, the children are still the legacy of that union, and the children will go on even though the marriage will end.
Money, property, and even spouses can come and go, but all parents want healthy, loving relationships with our children. Post-divorce, children keep spouses connected; the relationship is not severed but changed.
By maintaining focus on the children throughout the divorce process, parents can learn how to grow and evolve into successful co-parents. Successful co-parents have children who know without a doubt that mom and dad will both show up at the college graduation, the wedding, or the birth of the grandchild. That’s the best gift you can give each other and give your children despite the dissolution of the marriage.
The Advantages of A Child Centered Divorce
Even if two people cannot agree on anything else, it is almost always possible that two parents can agree that they want what is best for the children. A child-centered divorce retains the focus on that really important thing, so every other decision about the legal division of marriage can be based on that. Parents focusing on their children are less likely to:
Allow disagreements to get completely derailed
Make decisions based on their own negative emotions
Have difficulties finding resolutions to common problems
On the most basic level, a child-centered divorce is advantageous for the children involved, but in totality, this kind of focus translates to easier resolutions on everything else that is involved. For example, two parents who may otherwise battle about who gets to keep the house will decide who gets to keep the house based on what will work best for the children involved.
The Collaborative Divorce Enables a Child Centered Focus
Collaborative Divorce processes support the child-centered focus because of how they are designed. From the initial joint meeting, both parties of the divorce share their goals.
As a family law attorney, I have yet to have a case involving minor children where the parties did not have a shared goal of making sure their children got through this process with the least amount of change and trauma. From the very beginning, you can tell that is a common goal among both parties, which helps them get to a resolution.
Crafting a logical and healthy parenting schedule and handling children’s expenses fairly are naturally part of the process. The children’s ages and needs and the parenting philosophies are examined to develop new plans for family life that still benefits the children the most. Even couples with children over the age of 18 can keep their children their center focus with a collaborative divorce. It’s not uncommon for parents to determine things like how a future marriage of the child will be funded or how the two co-parents will cover the child’s college expenses.
The Collaborative Divorce process is an excellent way to manage a divorce and plan for the children’s future. After all both parents will always be the parents of their children.
Seila Law LLC v. Consumer Financial Protection Bureau: A Question of Constitutionality
February 7, 2020
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The Supreme Court has decided to hear a case challenging the constitutionality of the structure of the Consumer Financial Protection Bureau (“CFPB”). The CFPB was created in 2010 under the Dodd-Frank Act, which provided that the director of the CFPB could be removed by the president for good cause. The petitioner in Seila Law, a debt resolution law firm, objected to a demand from the CFPB for documents and information regarding the firm, on the grounds that the CFPB’s structure is unconstitutional. The case made its way from the Central District of California through the Ninth Circuit Court of Appeals, which found that the CFPB’s structure is constitutionally permissible. Consumer Financial Protection Bureau v. Seila Law LLC, 923 F.3d 680, 682-84 (9th Cir. 2019). The petition for writ of certiorari was granted in October of 2019.
Interestingly, the CFPB took the position in its brief on the petition for writ of certiorari that its single-director structure is, in fact, unconstitutional. CFPB Director Kathleen Kraninger outlined this position in a letter to Senate Majority Leader Mitch McConnell, arguing that the unconstitutionality of the for-cause removal provision does not affect the statutory responsibilities of the CFPB or its ability to remain fully operative. In taking up this issue, the Supreme Court will consider whether the structure of the CFPB violates the separation of powers, and if so, whether 12 U.S.C. § 5491(c)(3), establishing the CFPB, can be severed from the Dodd-Frank Act.
Attorneys Beware – The FCRA is a Consumer Protection Statute, Not a Mechanism for Greed
February 7, 2020
PRACTICE AREA -
Denise Miller v. Trident Asset Mgmt., LLC., et al.; No. 1:18-cv-02538-ADC (Dec. 4, 2019) (Order Granting Defendant’s Motion for Sanctions)
In a scathing opinion, the District of Maryland recently awarded attorneys’ fees and costs to Defendant Trident Asset Management for having to defend what it characterized as “Plaintiff’s fraud upon this Court.” Denise Miller v. Trident Asset Mgmt., LLC., et al.; No. ADC-18-2538, Dkt. 168 at *3. In Miller, a consumer alleged a Verizon account was opened without her authorization or knowledge. Id. at *1. The Verizon account ultimately was charged off, with the outstanding $190 balance sent to Trident for collection, who thereafter began reporting the account on Plaintiff’s credit files. Id. Plaintiff disputed the reporting with the national consumer reporting agencies, repeatedly claiming the account was the product of fraud. Id.
In its Order, the Court vehemently rebuked Plaintiff’s actions, her paralegal’s actions, and her attorney’s actions. Id. at *3. “It would also be imprudent to ignore the role of counsel in this case, who even after being faced with his client’s admission of the debt, the false reporting of identity theft, and her lack of knowledge of whether the reporting was accurate, continued to press the litigation.” Id. at *4. Equally as concerning was the court’s emphasis on the behavior of Miller’s paralegal, Thomas Alston, whom also happens to be Ms. Miller’s landlord. Id. at *3. “‘[T]he Alston family is engaged in, and profiting from, an enterprise of [FCRA] litigation.’” Id. at *4 (quoting Alston v. Branch Banking & Trust Co., 1:15-cv-3100-GLH, 2016 WL 4521651, at *1 n.1 (D. Md. Aug. 26, 2016) (internal citation omitted).
The Miller decision serves as an important reminder ─ the Fair Credit Reporting Act, while an important vehicle to correct actual errors in consumers’ credit reports, is not to be used as a mechanism for greed by bringing frivolous, fraudulent lawsuits.
QSLWM welcomes Susan Rankin
August 29, 2017
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Susan Rankin’s practice of family law is augmented by her Masters in Clinical Psychology and her years of practice in the mental health field. At QSLWM, Susan will serve the community and her clients by using her expertise as a family law litigator, mediator, arbitrator, collaborative lawyer, private judge, amicus and expert witness. Susan has been a coauthor, speaker or panelist on family law and litigation topics on 48 occasions and will practice in any county in Texas.
- 12 Years Presiding Judge – 301st and 254th Family District Courts
- 2 1/2 Years Associate Judge – 301st Family District Court
- Appointed by two sitting Governors of the State of Texas
- Board Certified in Family Law
- 29 Years Practicing in the Family Law area
- Voted to D Magazine’s Top Women Lawyers in North Texas (2010)
- Member of Texas Academy of Family Specialists