Texas Divorce: Reimbursements and Offsets
After about a decade of marriage to an "economic contribution" statute, the Texas legislature officially filed for divorce in 2009 and reinstated a "reimbursement" statute. The new reimbursement statute expands the number of situations when reimbursement can be used to recover for monies or talents spent by one marital estate for the benefit of another.
The Economic Contribution Statute.
In a marriage, there are three separate estates:
The community estate
The wife's separate estate
The husband's separate estate
If one estate contributed to the benefit or enhancement of another (typically these claims involved real estate), an economic contribution claim could be made by one spouse during a divorce, requesting that the spouse who received the benefit repay or reimburse the contributing estate. Economic contribution was a complicated doctrine involving complex formulas to determine the amount to be reimbursed by using appraisals, offsets, and determining exact amounts owed on property at different periods of the marriage.
The New Reimbursement Statute
The new reimbursement statute, Texas Family Code § 3.402, codifies nine different types of reimbursement, but it does not specifically limit reimbursement claims to those types listed. The reimbursement statute is equitable in nature and does not require that specific dollar for dollar values to be used. Often, reimbursement claims will be for the value of the enhancement to the property and not the specific amount contributed.
A reimbursement claim can be "offset," however. This means that the claim can be reduced by the amount that the party making the claim "benefited" from the use and enjoyment of the property. Examples of benefits are tax deductions and the value of living expenses avoided due to the separate property, including rent.
The new statute also recognizes "time, toil and talent" as a reimbursement claim. This is the recognition of a claim for contributions that are not purely monetary, but rather for efforts on behalf of the estate that go beyond what is necessary for regular upkeep and preservation of the property, assuming those efforts have not already been fairly compensated.
The division of property can be one of the most complex aspects of a divorce, and just determining what property belongs to which estate is often contentious. Matters may become more complex when both spouses enter the marriage with large separate estates. For questions about the new Texas reimbursement statute and how it may apply to your divorce, speak with an experienced family law attorney.
ABOUT THE AUTHOR: Rick Bell
Rick is a distinguished member of the Fort Bend County Bar Association, serving as the organization’s President in 2003. Rick is also an active member of the Texas Criminal Defense Lawyers Association, National Criminal Defense Lawyers Association, and Fort Bend County Criminal Defense Lawyers Association. He believes his commitment to these organizations makes him a better lawyer. Rick is continually attending legal courses to keep himself abreast of all the changes in the law. As a result of his attendance in these courses, Rick was awarded membership in the State Bar College, a certification awarded by the State Bar of Texas to those attorneys who exceed expectations for participation in continuing legal education programs.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.