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Military Divorce

Monday, October 20, 2014

Reimbursement Claims-Part 2: Offsets

This is the second post in a three-part series on "reimbursement claims" in divorce.  In Part 1, wife established a reimbursement claim on behalf of the community estate for the reduction in the principal amount of debt on husband's separate property home that accrued during 10 years of marriage.  In Part 1, we determined that the mortgage principal had been reduced by $60,000.  Here, we'll examine the effect of the husband's "offsetting" reimbursement claim for the benefit his separate property home conferred on the community.

For simplicity, let's assume that husband and wife filed a joint Federal income tax return during each year of marriage.  An examination of those tax returns revealed that the community's tax liability had been reduced by $40,000 by virtue of claiming the mortgage interest and property tax paid on husband's separate property home among the couple's itemized deductions.  Thus, husband's separate property estate (i.e. his home) conferred a benefit on the community estate (i.e. reduction in the spouses' tax liability).  Does husband's offsetting claim automatically reduce wife's reimbursement claim on behalf of the community to $20,000?  Not necessarily.

Courts are not required to offset reimbursement claims on a dollar-for-dollar basis.  As the court in Pennick said, evaluating equitable claims for reimbursement "is not merely a balancing of the ledgers" between the spouses' separate and community estates.  As in all "equitable" matters, courts have wide discretion to effect a "just and right" division based on all the factors at play in each parties' divorce.

Author Jim Cramp is the founder and principal attorney at the Cramp Law Firm.  The Cramp Law Firm provides a spectrum of family-related legal services in the greater San Antonio Region.  This blog cites Penick v. Penick, 783 S.W.2d 194 (Tex. 1988).


Friday, October 10, 2014

Reimbursement Claims-Part 1: The Basic Concept

This is the first post in a three-part series on "reimbursement claims" in divorce.  In fashioning a property settlement in divorce, claims for "reimbursement" are a common factor faced by the parties and courts.  In simple terms, a reimbursement claim requests "payback" for the benefit one marital estate conferred on another marital estate, such as when the community estate conferred a benefit on one spouse's separate property estate.  An example will help explain how this might work.

Husband bought a house prior to marriage.  Husband marries wife and they live together in husband's house for 10 years prior to wife filing for divorce.  In her divorce petition, wife asks the court to reimburse the community estate for the benefit it conferred on husband's separate property estate by way of the community's payment of the mortgage during 10 years of marriage.  How does this claim arise?  Well, each spouse's income, which was used to pay the mortgage, is community property.  The claim for reimbursement would hold even if husband was the only wage earner during the marriage because his income is community property.  A plea that "I used 'my' income to pay the mortgage on 'my' house" would ring hollow.

How much is the reimbursement claim?  Let's say the mortgage payment is $1,000 per month, which includes principal, interest, taxes and insurance.  Simple math might suggest that wife's reimbursement claim should be $120,000 ($12K/year for 10 years).  Is that the right amount?  You might think so, but the answer is, "no." 

Texas Family Code Section 3.402 defines reimbursement claims.  For our example (one spouse's separate property home, which is a secured debt), the Code limits the claim to the reduction in principal on the secured debt.  For simplicity, let's say that a comparison of the mortgage statement immediately prior to marriage with the statement immediately prior to divorce revealed that the mortgage principal had been reduced by $60,000.  Thus, the community estate that the court will divide in divorce should be increased in value by $60,000.

Reimbursement is not a "right."  Reimbursements are equitable claims that the court may, but is not required, to consider and grant based upon all the factors at play in specific case before the court.

Author Jim Cramp is the founder and principal attorney at the Cramp Law Firm.  The Cramp Law Firm provides a spectrum of family-related legal services in the greater San Antonio Region.


Tuesday, September 30, 2014

Income Security After Divorce: Collecting Social Security On Your Ex's Earnings Record

Sometimes a survivor's annuity, such as the Survivor Benefit Plan (SBP) or Former Spouse Survivor Annuity (FSSA), isn't available in military or Federal civil service divorce because a the benefit was awarded in its entirety in an earlier divorce.  All hope for income security might not be lost for the newly divorced spouse.  As a divorced spouse, you can collect Social Security on your ex-spouse's earnings record if:

  • Your marriage lasted at least 10 years;
  • You have not not remarried;
  • You are at least 62 years of age;
  • Your Social Security entitlement based on your own earnings record is less than the entitlement based on your ex-spouse's record; and,
  • Your ex-spouse is eligible to receive Social Security retirement or disability benefits--and, if your ex-spouse is eligible for but not yet receiving benefits, then you have been divorced at least 2 years.

Once qualified and receiving benefits, your payments will continue even after your ex-spouse dies.  Visit the Social Security Administration's website for more information as other conditions and restrictions sometimes apply.

Author Jim Cramp is the founder and principal attorney at the Cramp Law Firm.  Jim retired from the U.S. Air Force in the grade of colonel after 29 1/2 years active duty service.  The Cramp Law Firm provides a spectrum of family-related legal services in the greater San Antonio Region.


Monday, June 30, 2014

Social Study's Role in Child Custody Disputes

A "social study" is a common tool court's use to help determine the outcome of child custody disputes.  Texas Family Code Section 107.0511 specifies the minimum qualifications that a social study evaluator must meet.  In general, the evaluator must be a licensed social worker, counsel, family therapist or psychologist who meets the certain education and experience requirements.  Basic elements of a social study are specified in Section 107.0514 as follows:

  1. an interview, conducted in a developmentally appropriate manner, of each child at issue in the suit who is at least four years of age;
  2. observation of each child at issue in the suit, regardless of the age of the child;
  3. the obtaining of information from relevant collateral sources (e.g. school teachers);
  4. evaluation of the home environment of each party seeking custody of a child at issue in the suit or visitation with the child, unless the condition of the home environment is identified as not being in dispute in the court order requiring the social study;
  5. for each individual residing in a residence subject to the social study, consideration of any criminal history information and any contact with the Department of Family and Protective Services or a law enforcement agency regarding abuse or neglect; and
  6. assessment of the relationship between each child at issue in the suit and each party seeking custody of or visitation with the child.

When a court orders a social study, its cost is usually split by the parties.  In Bexar and surrounding counties, the typical cost is between $1,000 to $2,500 depending on the evaluator's qualifications and the complexities of the situation.  Upon completion, the social study is filed with the court and becomes part of the case record.  It can be used at trial and is subject to the customary rules of evidence.

Author Jim Cramp is the founder and principal attorney at the Cramp Law Firm.  The Cramp Law Firm provides a spectrum of family-related legal services in the greater San Antonio Region.


Saturday, May 10, 2014

Military Couples and Overseas Divorce

Military couples should be wary before filing for divorce in a foreign country simply because it might be quicker of cheaper than obtaining a divorce in the U.S.  A divorce decree from a foreign country generally won't be recognized in the U.S. unless one of the spouses was domiciled in the foreign country at time of divorce (i.e. resided there with intent that the foreign country be their "permanent home"). 

The U.S. Supreme Court established that a State court must have jurisdiction over the parties for a divorce to be valid.  Jurisdiction is based on one of the parties being domiciled in the State in which the divorce court is located.

One place this issue absolutely will bite a former spouse is when he or she files to obtain their court-ordered share of the member's military retired pay.  The Defense Finance & Accounting Service (DFAS) will not honor a divorce decree from a foreign country.  Per the Uniform Services Former Spouse Protection Act (USFSPA), DFAS can only honor divorce orders from courts of "competent jurisdiction," which according to the USFSPA does not include courts of foreign countries.  Check out DFAS' frequently asked questions, or FAQs.

Author Jim Cramp is an attorney and retired active duty colonel.  He provides a spectrum of family-related legal services in the greater San Antonio region.


Sunday, April 20, 2014

Indemnity - What It Takes to Collect

Indemnity clauses are common in divorce decrees to protect one spouse against the other spouse's court-assigned responsibility for paying a joint debt.  "Indemnify" means to hold harmless for loss.  A short scenario will help explain the concept:

Husband and Wife have a credit card in both names with a $5K balance.  In their divorce decree, the credit card debt is assigned to Husband and Wife is indemnified against any loss from Husband's failure to pay the credit card debt.  Pretty simple so far.

Now here's where it gets interesting.  Husband quits paying the bill when the balance is $3K.  The credit card company seeks payment from Wife.  She refuses to pay because the "it's not her debt" (which is a wrong belief since a decree only allocates responsibility "as between the spouses" but does not affect the creditor's rights).  Still, Wife is outraged and sues Husband for $3K since, after all, she was indemnified against Husband's failure to pay.  The court denies Wife's request for indemnity.  What went wrong?

Indemnity is not a right to personal enrichment.  It is a right to be made whole from loss.  Wife was not entitled to indemnity until she proved she actually paid the bill assigned to Husband in the divorce (i.e. suffered harm or loss).  Wife cannot merely collect money from Husband based solely on his failure (and hers) to pay.

For attorneys, a good case to review is Shumate v. Shumate, 310 S.W.3d 149 (Tex. App.—Amarillo 2010, no pet.)

Author Jim Cramp is the founder and principal attorney at the Cramp Law Firm.  The Cramp Law Firm provides a spectrum of family-related legal services in the greater San Antonio Region.

Thursday, April 10, 2014

Thumbtack - New Way to Locate Professionals

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Monday, March 10, 2014

Civil Protective Orders: Impact on Military Careers

Here's the scenario.  An active duty servicemember commits family violence against the spouse.  The spouse obtains a Protective Order through the civil court system that restrains the servicemember from commiting further acts of family violence.  What's the impact to the servicemember's career?  Well, there are four possible answers.

  1. The Uniform Code of Military Justice (UCMJ) permits the servicemember's commander to take appropriate action based on the underlying conduct (i.e. spousal abuse) whether or not the civil court system takes any action.  Military commanders have wide discretion in how they use their authority under the UCMJ.  Never forget that fact. 
  2. Federal law prohibits the servicemember from possessing or transporting a firearm or ammunition in his or her "civilian capacity."  This prohibition is established in Federal criminal statutues at 18 U.S.C. § 922(g)(8).  Should the servicemember have a second job as a State "peace officer," as defined in Texas Penal Code § 107, then an exemption exists in Federal law that permits possession and use of a weapon and ammunition when performing duty as a State peace officer.  The Federal exemption is found in 18 U.S.C. § 925(a)(1).
  3. The same Federal exemption found in 18 U.S.C. § 925(a)(1) permits the servicemember to possess a weapon and ammunition for official Federal Department or Agency duties, such as military training and deployment.  In short, a military member will not become "instantly non-deployable" because he or she is restrained by a civil Protective Order.
  4. Should the servicemember violate the Protective Order and be convicted after notice and hearing of a felony or misdemeanor criminal act of family violence, then the servicemember's career is in serious jeopardy.  Department of Defense instructions establish what counts as a "qualifying conviction."  A servicemember with a qualifying conviction is unable to possess a weapon and ammunition in both his civilian and military capacities.  The servicemember now is instantly non-deployable.  Unless the servicemember can be used or retrained into a non-deployable career field, he or she may be subject to discharge. 

In the end, while being restrained by a civil Protective Order isn't necessarily fatal to the servicemember's career, violating the order and being found guilty of a qualifying conviction tends to be fatal to a military career. 

Author Jim Cramp is the founder and principal attorney at the Cramp Law Firm. Jim was a three-time commander and retired from the U.S. Air Force in the grade of colonel after having served 29 1/2 years active duty.  The Cramp Law Firm provides a spectrum of family-related legal services in the greater San Antonio Region.


Friday, February 28, 2014

Dreaded "Due-on-Sale" Clause

Anyone who has actually read their Deed of Trust (commonly called "the mortgage") noticed the dreaded "due-on-sale" clause.  Due-on-sale clauses are intended to stack the deck in favor of lenders. In simple terms, a due on sale clause gives lenders the right to accelerate or "call" the note and demand full payment of the debt any time the homeowner/debtor transfers his or her interest in the home.  If nothing else, these clauses facilitate lenders in collecting another set of handsome fees whenever they approve loan assumptions (but that's another story).  Awareness of the due on sale clause's effect causes many people to fear what might occur in three common situations:

  1. when the homeowner transfers the home into his or her own living trust;
  2. when the homeowner/spouse transfers his or her interest to the other spouse in divorce as part of a court-ordered division of property; and,
  3. when the homeowner/decedent transfers his or her interest to a relative after death either through a Will, Trust, or by the laws of intestate distribution for those who die without a Will or Trust. 

Despite lenders' efforts to stack the deck in their own favor, all is not lost.  U.S. laws affecting banks and banking contain a specific list of transactions in which lenders are prohibited from exercising their rights under  due-on-sale clauses.  The list is set for in 12 U.S.C. § 1701J-3(d).  Our three common situations noted above are among that list.  So, lenders cannot exercise a due-on-sale clause when a homeowner transfers the home into his or her own inter vivos (living) trust.  Next, lenders cannot exercise a due-on-sale clause when one spouse transfers his or her interest to the other spouse in divorce as part of a court-ordered division of property.  Finally, lenders cannot exercise a due-on-sale clause when the owner/decedent transfers his or her interest to a relative after death either through a Will, Trust, or by the laws of intestate distribution for those who die without a Will or Trust.  That's good news for the homeowner/debtor.  The banks and other lenders don't hold all the cards.  By the way, if you weren't aware of due-on-sale clauses because you've never read your Deed of Trust, now would be a good time to do so.  

Author Jim Cramp is the founder and principal attorney at the Cramp Law Firm.  The Cramp Law Firm provides a spectrum of family-related legal services in the greater San Antonio Region.


Monday, January 20, 2014

Visitation When The Non-Custodial Military Parent Deploys

This blog post looks at an issue affecting military parents who don't have custody of their children.  Specifically, it answers the question of who can exercise visitation on behalf of a non-custodial military parent when they deploy--assuming Texas has jurisdiction to decide the matter.  Before diving into the subject, I'll quickly mention that this topic complements my blog post of January 10, 2014, entitled "Temporary Custody During Military Deployment."  Read both for a fuller understanding of the subject matter. Now, let's dive in.

In Texas, section 153.705 of the Family Code provides that a non-custodial military parent can designate a person of their own choosing to exercise visitation while the parent is deployed.  In response, a court "may" issue temporary orders that give the designated person some or all of the visitation rights that the non-custodial military parent normally enjoys.  "May" means that a Texas court is not bound to honor the request if the court finds the proposed arrangement not to be in the child's best interest.  Section 153.002 of the Family Code establishes the "best interest of the child" as one of the über-principles of Texas family law.  In that light, it's advisable for the non-custodial military person to designate only a person of good character and with whom the child has an existing, healthy relationship.

Finally, and as mentioned in the previous blog post, temporary orders terminate automatically when the non-custodial military parent returns from deployment.  There is no need or requirement to go back to court in order to hit the reset button.

Author Jim Cramp is the founder and principal attorney at the Cramp Law Firm. Jim retired from the U.S. Air Force in the grade of colonel after having served 29 1/2 years active duty.  The Cramp Law Firm provides a spectrum of family-related legal services in the greater San Antonio Region.


Friday, January 10, 2014

Temporary Custody During Military Deployment

A question that comes up quite often among unmarried and remarried military parents is this: who gets custody of your child when the military parent is ordered to deploy?  Is it the new spouse who is the child's stepparent?  Is it the other parent?  Is it someone else?  The answer contains three key components.  Let's briefly discuss all three.

First, know that your military Family Care Plan only satisfies your obligation to the Department of Defense.  Any temporary custody designation in your Family Care Plan does not trump State law.  In other words, if the other parent brings legal action to get temporary custody during your deployment, the fact that your Family Care Plan designates your new spouse as custodian will have no influence on the court proceeding.

Second, the State that has jurisdiction over the issues of custody, visitation and support for your child matters.  If an existing court order was rendered in a State other than Texas, then the laws of that State may drive the answer.  It all depends on the facts of your situation.  A qualified attorney can answer the question of which State has jurisdiction only after discussing the facts of your situation with you.

Third, if Texas has jurisdiction, then the answer is driven by section 153.703 of the Texas Family Code.  The hierarchy of preference for who gets custody during your deployment goes like this:

  1. The other parent will get custody under temporary court orders.
  2. If appointing the other parent is not in the child's best interest, then a person designated by the deploying military parent will get custody under temporary court orders.
  3. If neither of the above options prove to be in the child's best interest, then some other person chosen by the court will get custody under temporary court orders.

A court's temporary orders terminate automatically when the military parent returns from deployment.  There is no need to return to court to "reset" things. 

The Texas Attorney General's Office published a handbook entitled "Military Parents: Paternity, Child Support, Custody & Parenting Time" that provides a brief discussion of this and other related issues.  While the law itself often is more nuanced than the handbook presents, the handbook's discussion remains a useful resource and starting point for military and other parents. 

My next blog post will discuss one of those related issues laid out in the handbook.  When a military parent without custody is ordered to deploy, who can exercise visitation during that parent's absence?  Stay tuned.

Author Jim Cramp is the founder and principal attorney at the Cramp Law Firm. Jim retired from the U.S. Air Force in the grade of colonel after having served 29 1/2 years active duty.  The Cramp Law Firm provides a spectrum of family-related legal services in the greater San Antonio Region.


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