I want my Money Back! Reimbursement Claims During Divorce
“I want my money back!” His wife, soon to be ex-wife, shouted.
Under section 3.402 of the Texas Family Code, a claim of reimbursement includes:
- Payment by one marital estate of the unsecured liabilities of another marital estate;
- Inadequate compensation for the time, toil, talent, and effort of a spouse by a business entity under the control and direction; and
- the recovery for personal injuries sustained by the spouse during marriage. This recovery does not include any recovery for loss of earning capacity during marriage.
Presumption
There is a presumption that the properties that either spouse owns when they dissolve their marriage is community property.
Therefore, you (contending spouse) must proof by clear and convincing evidence that a particular property is your separate property.
Wait… Let’s Define the Words.
Community properties (or estate) are properties that both spouses acquired during marriage.
Separate properties (or estate) are properties that you owned before marriage. This includes a house, car, or inheritance.
How to Get Your Money Back in a Divorce Action.
First you can file a reimbursement claim and tell the court whether:
- Separate funds:
- This is one of the most challenging parts of getting your money back. Why? Because it requires tracing and making an argument before the court. One of the tools you can use for tracing is bank statements and deed. If you can show that you where the money came from and how you contributed to the community properties, then that may work.
- For example (hypothetical scenario), during your marriage, you took money out of your separate bank account; this account has never mixed with the family’s account. Then you used the $10,000 from your account to buy your husband a cab so he can work. He told you once the business (cab/transportation) starts earning money, he will give it back to you. Well, you never received your money back. In your divorce suit, you can ask that your separate estate be reimbursed for this money. You had contributed to the community estate.
- Community funds:
- This is where the family account needs to be reimbursed for money it gave to husband or wife to improve himself or herself. The purpose or use of the funds should be for one person’s benefit but it must come from a joint account or community funds.
- For example (hypothetical scenario), a couple decides to use joint funds to pay for wife’s student loans which she incurred prior to marriage. The community estate may be reimbursed; however, you may run into the question or issue of how the family (and the person requesting the reimbursement has benefited). In this same scenario, if wife used the student loans to get a nursing degree. Husband would have to prove to the court that husband and the family (community estate) did not benefit from the income that she earned as a nurse.
Some case law samples of reimbursement rule in Texas is:
Vallone v. Vallone, (Tex. 1992). The court ruled that the party claiming the right of reimbursement has the burden of pleading and proving that he or she made the expenditures and improvements. Also, this same party has the burden of proving that these expenses are reimbursable.
Grossnickle v. Grossnickle (Tex. 1988) – The court ruled that reimbursement for expenditures (i.e. expenses) can be offset by benefits used and enjoyed by the person who paid them. For example, if Wife bought a family van with her own money – see example 2. But, she uses the same car for work and her own personal errands. In fact, the kids know the van as Mom’s car, then her request for offset can be reduced by her use of same van.
Jensen v. Jensen (the infamous case that explains the Reimbursement Theory). In this 1984 case, the Court ruled that the community estate will be reimbursed for the value of time and effort expended by either or both spouses to enhance either party’s separate estate. A common example is a housewife married to a CEO or business man. Although Housewife has no income, she can claim reimbursement for her toil and effort in raising the children and managing a house while Husband traveled. This is a claim against the community estate. If she contributed her expertise as a stylist to cut or fix Husband’s hair every two weeks – so he doesn’t have to go to a barber; then, she can claim reimbursement towards her own separate estate. In Jensen, the court showed that the time, toil, and effort of one party to enhance another party’s separate estate.
Overall, reimbursement involves a lot of mathematics and tracing. It can become complex, tedious, and confusing for a person who wants to prove his/her claim. That is why you need an experienced family attorney to assist you. Give us a call. (832) 529-155 or send us an email at office@aminulaw.com.
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