Texas Divorce Statistics January 2015

This from the Office of Court Administration, divorce filings in Texas account for 89% of all cases filed in the District Courts. In the fiscal year 2014, there were 111,409 divorces filed in Texas district courts out of a total of 125,588. Overall, the divorce rate per 1,000 people was 4.7 (meaning 4 or 5 people out of 1,000 got divorced in 2014). This statistic is down 30% over 1995 statistics, which showed 6.7 out of 1,000 people got divorced.

The Office of Court Administration is doing some good work with the memes on various court-related statistics.  See more at their website.

Texas divorce statistics 2014

Same Sex Marriage in Texas… Yes, Then No

Last week was a crazy time in Texas for proponents of same sex marriage.  Here’s a timeline of the events that occurred last week:

  • On Tuesday morning, a probate judge in Travis County declared the Texas definition of marriage unconstitutional in a private probate proceeding.

probate court order

So, as of now, two ladies in a same sex got legally married in Travis County. The LGBT advocates rejoiced. AG Paxton filed to invalidate their marriage. The Texas Supreme Court pushed the pause button and said WHOA wait a minute here… let’s sort this out. And, everyone remains in limbo. STAY TUNED!

Michelle O’Neil authority on Texas’ same sex marriage rulings

I participated in several media interviews pertaining to the events between Tuesday Feburary 17 and Thursday February 19, 2015 on Texas first legal same sex marriage between a lesbian couple in Travis County, Texas. Here are the links to my interviews that aired on Tuesday, Thursday and Friday:

Channel 11 Probate Judge Rules Texas Ban On Same-Sex Marriage Unconstitutional. (Tuesday February 17, 2015)

Fox 4 News interview with Steve Eagar and Michelle O’Neil regarding Texas first same sex marriage: Attorney talks state’s first legal same-sex marriage (Thursday February 19, 2015)

Channel 8 WFAA’s Attorney speaks about first legal gay marriage in Texas. (Thursday February 19, 2015)

Channel 11 North Texans React To 1st Legal Gay Marriage In The State (Thursday February 19, 2015)

KCEN TV in Waco Texas AG Says Travis County Same-Sex Marriage Void (Thursday February 19, 2015)

KRLD Interview regard Texas Same Sex Marriage Rulings (Friday February 20, 2015)

 

 

Travis County Rules Same Sex Marriage Ban Unconsitutional, Part 2

I reported yesterday on the Travis County Probate Judge’s ruling that Texas’ ban on same sex marriage is unconstitutional.  See Travis County Probate Judge Declares Same Sex Marriage Ban Unconstitutional.  Andrea Lucia @CBS11Andrea interviewed me regarding the ruling as part of her report on KTVT CBS 11.  See the video of the report here.  Let me know what you think is the effect of the ruling? Do you have a guess as to when the 5th Circuit’s ruling may come down?

 

 

Travis County Probate Judge Declares Same Sex Marriage Ban Unconstitutional

Today Judge Guy Herman of Travis County Probate Court Number 1 ruled that Texas ban on same sex marriage is unconstitutional. See the Order here. This ruling comes from a probate matter pending after one same sex spouse, Stella Powell, passed away from colon cancer without a will.  Her spouse, Sonemaly Phrasavath, sought to have their relationship recognized as a common law or informal marriage under the laws of the State of Texas.  On the other side, Powell’s siblings sought to inherit Powell’s property because they allege that Powell and Phrasavath were not legally married in Texas.

orderTexas Family Code section 2.401 provides that an informal marriage between a man and a woman may be proven by evidence that the man and woman:

  • agreed to be married;
  • after the agreement, lived together in Texas as husband and wife; and,
  • represented to others that they were married.

The Travis County Probate Judge declared those portions regarding man and woman and husband and wife of the Texas Family Code unconstitutional.

The battle of the siblings versus the surviving spouse comes before the probate court because Powell died without leaving a will.  If she had left a will, she herself could have determined who was to inherit her property.  But, without a will, Texas Estate Code section 201.001 dictates who inherits her property. If there is a legally recognized marriage between Powell and Phrasavath, then Phrasavath as the surviving spouse, would inherit all of Powell’s belongings.  If the marriage is not recognized as legal, then the siblings would be in line to inherit.

Ultimately, the ruling is very important to the spouse fighting to keep the property of her wife.  However, it has little effect on the legality of same sex marriage statewide.  The reason for this is because the Travis County Judge’s ruling merely declared the Texas law unconstitutional.  The federal ban on same sex marriage recognition stands.  So, Texas is not in the clear yet to grant same sex marriage applications based solely on this ruling.

The federal 5th Circuit Court of Appeals, which covers the State of Texas, is expected to issue a ruling any day on the appeal out of the San Antonio federal court which declared the federal and state laws banning same sex marriage.  ARgument was heard in January on the appeals pending before the 5th Circuit from federal courts in Texas, Louisiana, and Mississippi on the constitutionality of same sex marriage.  See Gay Marriage Bans To Be Heard In Federal Court. When that ruling is handed down, Texas will have more clear definition on whether same sex marriages can begin to go forward.

Substituted Service Through Facebook

service by social media

Service by Social Media

When a new lawsuit is filed, whether it is a divorce in Dallas County, Texas or any other type of suit, the responding or defending party has a right under the Constitution to be personally service with citation. Also called “service of process”, this means that the party who filed for divorce must request the clerk of the court to issue citation upon the responding party and it must be served by an authorized neutral third party (such as a constable or process server). If a temporary hearing is scheduled, notice of hearing must also be served on the responding party.

But, what happens if the responding party dodges service or for some reason cannot be served easily? Under that scenario, the filing party must file a motion and obtain an order authorizing substituted service. This substituted service must be authorized in a manner that is likely to actually give the responding party notice of the lawsuit. Most often this involves posting the citation on the front door of his or her house. In the day and age of electronic communication, folks are starting to request service by electronic means. Maybe the responding party is travelling but always checks email. The Court might authorize service via email.

One issue that has arisen lately is whether it is permissible to serve someone through social media channels. Zachary Ludens with Carlton Fields Jorden and Burt in Miami Florida wrote a blog post called “Where is the ‘Serve’ Button?” about this topic. Ludens points to some recent federal and state court decisions that have opened the door to service of process via Facebook and LinkedIn messaging. This began as a method of serving foreign individuals under the federal rules of civil procedure, Ludens expects it could expand to cover folks living in the United States.

“Between March 2013 and February 2014, two federal courts allowed foreign defendants to be served via social media. In both cases, the courts initially determined whether the defendant’s resident nation had affirmatively disallowed service via social media in an agreement with the United States. When that question was answered negatively, the courts—the Southern District of New York in FTC v. PCCare247 Inc. and the Eastern District of Virginia in Whoshere, Inc. v. Orun—examined whether service via social media was “reasonably calculated under the circumstances” to provide notice, in accordance with due process standards. In both cases, the courts allowed service via social media—but required that it be supplemented with service via email.

“Then, in September 2014, a family court in Staten Island, New York, allowed a defendant to be served via Facebook when the traditional methods of service proved inadequate. Determining that the defendant had been actively using her Facebook account, the court concluded that Facebook provided “the best chance of the [defendant] getting actual notice of these proceedings.” Nevertheless, the court also required mailing of service to the defendant’s last known address.”

These cases indicate a willingness among some judges to permit social media service, when coupled with other means of notifying the responding party. This means we are one step away from social media service being the only method of substituted service when personal service isn’t available.

But, what happens if the message via Facebook goes to the person’s “other” inbox. Some don’t know that the “other” inbox exists much less how to access it. What if the person gets a notification from LinkedIn that he or she has a message but doesn’t check it? (I know I don’t check my LinkedIn messages all that often.) Or, what if the person thinks the Twitter pm was a scam or junk and ignores it? This is likely the reason for the secondary method of coupling the social media notice with email. When personal service is not available, other methods of service are imperfect, but should be designed to reasonable give the responding party actual notice of the suit.

And, who does the service via social media come from? A process server unknown to the party but still a “neutral”? Or someone known to the party?

How do you know that you served the right person when there are multiple parties registered to the same name and maybe even in the same location when the name is common?

Process servers use all sorts of means to locate a party, including social media resources. But, even process servers are injecting discontent with the idea of service by social media. See “Getting Serious About Service of Process by Social Media” by Stephanie Irvine. That article points to a survey of over 300 process servers that says less than 2% have served documents through social media. One of the main problems as reported by the process servers seems to be getting a verification of receipt.

What do you think about social media service? Is it a good idea? Have you had experience with using it? Let us know!

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Stop Fighting! Especially in front of the child.

Parents Fight, Son SuffersParents who are not together any more or who are divorcing argue. Sometimes that arguing spills over in front of the child. But, it’s not okay to argue in front of the child. It’s not okay to call the other parent names in front of the child.

But, even when parents fight where the kids can’t hear, it can affect the parent’s rights to the child.

The Texas Family Code presumes that parents are going to be named joint conservators of their children. But, when parents cannot co-parent, reach shared decisions, or generally put the children’s interests first, a judge can refuse to appoint the parents as joint conservators.

Texas Family Code section 153.134 says that a court must consider the following factors in deciding to apply the presumption in favor of joint conservatorship:

(1)  whether the physical, psychological, or emotional needs and development of the child will benefit from the appointment of joint managing conservators;

(2)  the ability of the parents to give first priority to the welfare of the child and reach shared decisions in the child’s best interest;

(3)  whether each parent can encourage and accept a positive relationship between the child and the other parent;

(4)  whether both parents participated in child rearing before the filing of the suit;

(5)  the geographical proximity of the parents’ residences;                

(6)  if the child is 12 years of age or older, the child’s preference, if any, regarding the person to have the exclusive right to designate the primary residence of the child; and,

(7)  any other relevant factor.      

So, even if the arguing is such that it prevents two parents from effectively co-parenting, it is grounds to justify sole custody in favor of one parent.

Consider this when you are arguing about dental treatment, or medical treatment, or sharing prescriptions, or whatever else parents argue about. 

How is My Retirement Divided After a Divorce in Dallas, Texas?

Wretirementhen going through a divorce in Dallas, Texas, it is important to gather all the information you can regarding your retirement accounts such as the start date, the most recent statement and the plan administrator’s contact information. Any retirement acquired during the marriage is community property and is thus divisible by the Court.

When it comes to dividing a retirement account such as a 401K or a pension, extra steps are required in addition to the final divorce decree dividing such accounts. In order to divide a 401k or Pension, an additional order called a Qualified Domestic Relations Order needs to be signed by the Court. The Qualified Domestic Relations Order is referred to as a QDRO.

Once the QDRO has been signed by the Judge, it is then sent to the retirement plan administrator for processing. Many plan administrators are not located within Texas and most have their own QDRO that they prefer for participants to use. Some QDROs can be rather complicated and it is recommended that the proposed QDRO be submitted to the plan administrator for approval prior to having the Judge sign the QDRO.

The QDRO essentially divides a retirement account into two separate accounts. The QDRO will state the division of the retirement account shall occur upon a date certain. This means that the retirement account will be divided as of the date of divorce or another date as stated in the QDRO. The QDRO will also assign either a percentage or dollar amount for each spouse being awarded an interest in the retirement as of the date certain stated in the QDRO. If a spouse has taken a loan from their retirement account, the spouse that is to assume responsibility of that loan will need to be specifically stated in the QDRO.

 

Real estate in a Texas divorce – What do you need to know?

This is a reprisal of a blog post I wrote two years ago about real estate valuation and division in a Texas divorce.  The points here still ring true today. Hat tip to Jeff Landers’  (@bedrock_divorce) Personal Finance Column on Forbes.com for his article about real estate in divorce. He had seven points that he believes divorcing women need to know about real estate and real estate appraisals. I actually think that his point is relevant whether you are a man or a woman – anyone going through divorce that has real estate needs to be aware of how real estate is handled, especially in Texas since the rules in Texas are a little different than most other states.

In Texas any asset purchased during the marriage is considered community property and is divisible in the final divorce. (Any property purchased before marriage or received through gift or inheritance is separate property. For a discussion on Texas characterization and division in divorce, click How to Divide Marital Property in a Dallas, Texas Divorce.) In reaching a fair division of the marital estate, first the values of the assets must be determines. For real estate, it is always best to get an appraiser to give an opinion of value under the current market conditions.

Landers’ points are:

  • Most real estate appraisals are based on comparable sales.

A real estate appraiser evaluates a property based on the recent sales of comparable properties in the area, considering whether the features of the real estate in question make it more valuable or less valuable than the other properties considered. Some people try to use the tax appraisal value in divorce, but that value may or may not be related to the actual fair market value of a house.

  • Unique features may be evaluated differently by different appraisers.

How the unique features of a property are valued is a subjective standard that can differ from one appraiser to another. Appraisers won’t consider the extravagant window treatments or fancy paint on the walls. Features that effect value include a swimming pool or a 4-car garage. If one side of the divorce gets an appraisal and the other side disagrees, then a second appraiser can be hired. If there is a substantial difference in the two opinions, then a third appraiser can be appointed by a judge to “break the tie”.

  • One woman’s peaceful Zen garden may be another woman’s backyard eyesore.

Like appraisers view things differently, so may buyers. The seller may be really into fruit trees and think the orchard is of great value to the property. A buyer, on the other hand, may find the falling rotting fruit to be an annoyance that attracts critters to the yard. So, a seller’s viewpoint of the value of costly improvements they performed on the house may not be indicative of the value that an appraiser or a buyer may find.

  • Make sure you use an appraiser who’s knowledgable in the local market.

Realtors like to say, “all real estate is local” – that holds true in valuing real estate in a divorce. The local market conditions drive the prices of real estate. An appraiser in Dallas may not be familiar with the under currents of the housing market in Houston to give a fair assessment of value.

  • Real estate values change over time.

Over the past few years we have seen with great emphasis how the real estate market can change over time. Economic factors – like the availability of mortgages, how high or low mortgage interest rates are, or whether the job market is shrinking or growing – affect housing prices. Just because a house was worth something when it was purchased does not necessarily carry over to the present value. Likewise, some cases need to have a historical value to show what the property was worth in the past.

  • Fair market value is only part of the story.

In considering a division of property in a divorce in Texas , finding the fair market value of the property only provides part of the information needed. The mortgage balance is also important to know, which then provides the equity position in the property.

  • Equity in the property is not the same as money in the bank.

Obviously, you can’t spend home equity at the grocery store or use it to pay the electric bill. So, different spouses may have different priorities in achieving a fair division of property. One spouse may have more interest in spendable cash; where another spouse may be more interested in the long-term equity of the real property. But, even if the house gets sold for more than was paid on it, there are tax considerations to take into account. If the house appreciated in value since it was purchased, there may be capital gains taxes to pay. This will decrease the cash available to spend.

Photo Credit: © Remygerega | Stock Free Images & Dreamstime Stock Photos

Divorce in the New Year Protecting Your Business

new year shutterstock_62795851January is the month of renewal – closing the door on the negativity of the prior year and planning for the challenges of the new year. Many commit to weight loss, exercise, or stopping smoking at the start of a new year as an opportunity to make improvements in their lives. On the other hand, some people use the beginning of a new year to make new personal beginnings, such as ending their marriage.

Planning for a divorce and new life may seem daunting. Not knowing what to expect can be scary and frustrating. In a Texas divorce, specific requirements must be met before someone will even be allowed to file for divorce. For example, a spouse must live in Texas for 6 months and in a particular county for 90 days to qualify to file for divorce in Texas and in that county.

When going through the divorce, marital assets and debts will need to be divided between the parties. Some people enter into a premarital agreement when they get married to ease the divorce process and define the division of assets and debts in the event of divorce. But, some spouses are unable to agree in advance as to the division of marital property upon divorce in Texas, which can lead to contested litigation. Also, some parents are unable to agree regarding each parent’s role with their children after divorce. Child custody issues can become expensive and time-consuming.

For those spouses who own a business as a marital asset, getting divorced and reaching a fair division of the marital estate can be even more complicated. A business entity is a separate marital asset – the individual assets and debts owned by the business are not part of the marital estate, only the entity as a collective whole. The first step in dividing a marital estate that contains a business entity involves establishing when the business was started. If it was formed prior to the marriage, it may not be community property under Texas marital property law. However, any changes to the organization, such as the entity type or owners may alter the initial characterization of the business as separate or community property.

After determining that the business is community property under Texas marital property law, the second step is to figure the business’s monetary value to the community estate. A CPA or business valuation expert will evaluate and establish the value of the business for property division purposes. It is recommended that the CPA be certified by the American Institute of CPAs in Business Valuations. The value will depend on many different factors, including the amount of assets the business has, properties that the business own, current customers, intangible goodwill, as well as other financial information.

Practically speaking, while the divorce works through the process, the business will need to continue to operate. Owner spouses need to know what to do to protect their investments while the divorce process is ongoing. This becomes even more important if both spouses work at the company and agreements need to be in place regarding each spouse’s rights, duties and responsibilities regarding running the business.

Once there is evidence of the assets and debts contained within the community estate as well as the value of each asset and debt, the parties by agreement, or the judge after a trial, will work to achieve a fair division of the assets and debts between the parties. The division does not have to involve a split of each asset and debt, but will contemplate an overall fair division. One spouse will receive certain assets, the other spouse will receive other assets, each spouse will be allocated certain joint debts, and each party will be assessed the debts in their name only.

If you are considering a divorce or have been served with divorce papers, contact an experienced divorce attorney, especially if you own a business. The decisions you make during this process could impact not only your personal financial freedom but also your business’s bottom line. You need to know what will be considered in the final split of the marital assets and debts. 

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