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Federal Civil Service Divorce

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.


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

I'm a proud member of Thumbtack, an internet based marketplace that helps consumers with specific needs find qualified and affordable professionals.  To sign up as a consumer, simply visit Thumbtack's website.  To view my profile on Thumbtack, click here.  My profile, of course, includes a link to my website where prospective clients can find an abundance of information about me and my legal service areas.

I find Thumbtack to be a convenient way for both parties to communicate.  I get to convey a tailored message that speaks directly to the prospective client's need.  Prospective clients have the option of comparing perspectives and costs among a handful of attorneys.  Check it out.

Tuesday, February 11, 2014

Federal Retirement Annuity and Thrift Savings Plan Estimator

Estimating the value of a Federal retirement annuity and Thrift Saving Plan (TSP) benefits is important to both Federal employees and spouses facing retirement or divorce.  The Office of Personnel Management (OPM) provides an online tool called the Federal Ballpark Estimator (FBE) that helps answer these questions.

The FBE's stated purpose is to help an employee estimate how much needs to be saved to meet retirement savings and income goals (i.e. retirement planning).  The flip side is that it also helps estimate what the percentage of an employee's retirement annuity awarded to a spouse in divorce should be worth (i.e. divorce planning).  As with any "estimator," the FBE works on a set of assumptions

As OPM explains, the FBE is a useful tool for employees covered by the Civil Service Retirement System (CSRS), CSRS-Offset, or the Federal Employees Retirement System (FERS) who plan to retired under the voluntary age and service rules.  Check it out.

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, January 30, 2014

Federal Employment-Related Benefits in Divorce

Divorce is stressful.  Much of the stress is tied to uncertainty about what "life after divorce" might look like.  For Federal employees and spouses, questions linger about what employment-related benefits can be impacted by a court order.  Our firm's website provides a wealth of information about how a Texas divorce decree can impact benefits of both Civil Service Retirement System (CSRS) and Federal Employee Retirement System (FERS) employees. 

Some people benefit from reviewing information from multiple sources.  In that vein, we're pleased to mention that the Office of Personnel Management (OPM) published a booklet entitled Court-Ordered Benefits for Former Spouses that briefly explains a few of the topics covered in our website's section on Federal Civil Service Divorce.  Download a copy of OPM's booklet today.  It never hurts to have an additional source for important information.

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. 


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