Christmas Gifts: What happens to them if a divorce comes along?

The holidays are a time for gift-giving. For those going through a divorce at this time of year, the consideration of gifts is especially important.

That’s because, in Texas, all property owned at the time of divorce, including any gifts, must be classified as either separate or community property.

Community property is jointly owned by the married couple and divisible by the judge at the time of divorce. Separate property, however, is not. The court cannot take away separate property in a divorce.

  1. Gifts do not fall under the community presumption.

The general rule is that all property received during a marriage is community property. Gifts, however, are one of the few exceptions. Unlike most property received, gifts are classified as separate property.

  1. The community estate cannot receive a gift.

A gift cannot be given to the community. If the gift is to one spouse or the other, it is the separate property of that spouse. If the gift is made to a married couple, the property is one-half the separate property of each spouse.

  1. Income from a gift belongs to the community estate – usually.

If a gift is received that generates income, even though the gift is separate property, the income generated from the gift is community property. So although a divorce court cannot take away the gift, it can divide and take away some or all of the income. Income includes interest, dividends, and rental income.

  1. A gift from one spouse to the other includes the income – probably

The rule stated above in #3 does change a little bit when it is one spouse giving something to the other. According to the Texas Family Code, Section 3.005, “If one spouse makes a gift of property to the other spouse, the gift is presumed to include all the income and property that may arise from that property.” The presumption can be challenged, however, so if you are giving something to your spouse that you want to not follow the presumption, you need to make sure that you have some written evidence of your actual intent.

To discuss your case with the attorneys of the Beal Law Firm, call us at 817.261.4333 or 214.414.0418, or write us at lawyers@dfwdivorce.com. You can find us on the web at www.dfwdivorce.com.

Custody: Airline Pilot Possession Schedule

Pilots and Crew Members often need unique possession schedules, if they are going to spend quality time with their children.

Parents who are not together often have court orders detailing the times during which they each have possession of their children. These orders arise in Divorce and Custody cases.

Texas has a Standard Possession Schedule, an Expanded Standard Possession Schedule, and rules regarding what type of schedule a court should give for children under the age of three. All of these are laid out in the Texas Family Code, Chapter 153.

But, these standard concepts are not the only schedules available for the court or parties to choose from. When one or both parents have a job that does not allow for set possession times, the parties can agree to use an alternate schedule that is tailored for the lifestyle associated with the job. If the parties cannot agree to use such a schedule, one of the parties can ask the court to order a flexible schedule.

One such schedule is that used by Airline Pilots and members of Airline Flight Crews.

A typical Airline Pilots schedule or Air Crew schedule may include language that includes a “finding” by the Judge that the pilot/crew member is “unable to exercise predictable periods of possession occurring on the same days of each month” because of his or her “work and flight schedule.”

The order may go on to describe how and when the Pilot or other Crew Member receives his or her schedule and what the schedule contains.

In order to have a system that allows for consistent possession of the children by the parent with the inconsistent schedule, the Judge can order the airline-employed parent to deliver a copy of his or her schedule to the non-airline employed parent within a reasonable amount of time after receiving it, and to elect which weekends and weekdays the Pilot or Crew Member will be exercising. Although there may be a designated method that the parties are supposed to use to try to resolve any conflicts, since the Airline parent’s schedule is likely less flexible, an order would typically give the Airline parent’s choice priority.

If an Airline or Pilot’s Schedule is used, it is typical to include language that the unique terms will only apply “until such time as” the Airline parent “is no longer employed as an airline pilot [or crew member].” The order can then include terms for possession that will begin at that time, whether a Standard Possession Schedule or otherwise.

One thing to keep in mind, however, is that there is no requirement that a Trial Judge give an Airline Parent a unique Airline Possession Schedule that meets all of his or her needs. In fact, in one Texas case several years ago, a Fort Worth Judge awarded a pilot a Standard Possession Schedule, despite evidence that the pilot would not be able to effectively exercise the schedule and would thus be denied the ability to frequently and consistently see his children. Fortunately for the pilot, the case was reversed by an Appellate Court on other grounds.

To discuss the unique needs of your situation with the lawyers of the Beal Law Firm, please call us at 817.261.4333 or 214.414.0418, or write us at lawyers@dfwdivorce.com. You can find us on the web at www.dfwdivorce.com.

Custody: Electronic Access to your child

Court Orders for phone Calls, emails, and video-chat with your child

Spending time with your child is important. Everyone knows that. But when parents are not “together,” courts often have to get involved to tell each parent when they are allowed to exercise their possession time. If the parents can agree on a schedule, courts will usually approve it.

Sometimes the non-primary parent gets a standard possession schedule, as described here, and sometimes the non-primary parent gets an “expanded” standard possession schedule, as described here. Sometimes parents get something altogether different, like a week-on/week-off schedule or other 50-50 arrangement.

But, in addition to all of that, one other option that parents have to maintain a relationship with their children is through electronic communication.

In 2007, the Texas Family Code added Section 153.015, entitled Electronic Communication with Child by Conservator. The term “conservator” is used for virtually all parents of minor children that go through the court system, whether in a divorce or custody case.

The code defines electronic communication as “any communication facilitated by the use of any wired or wireless technology via the Internet or any other electronic media…[including] communication facilitated by the use of a telephone, electronic mail, instant messaging, videoconferencing, or webcam.”

Unfortunately for parents that can’t agree on the terms of the custody order and have to get the court to decide the terms for possession and access, the statute does not provide much guidance.

Per the code, if a parent is seeking Electronic Communication access, the Judge must allow evidence to be introduced concerning:

  1. Whether electronic communication is in the best interest of the child; and
  2. Whether equipment necessary to facilitate the electronic communication is reasonably available to all parties subject to the order.

The Code goes on to state that any court order for Electronic Access shall require both parents to:

  1. Provide the other conservator with the e-mail address and other electronic communication access information of the child; and
  1. Notify the other conservator of any change in the e-mail address or other electronic communication access information not later than 24 hours after the date the change   takes effect.

Perhaps most interesting in the statute, the Code provides that in virtually any Electronic Access order the Judge must require the parties to:

accommodate electronic communication with the child, with the same privacy, respect, and dignity accorded all other forms of access, at a reasonable time and for a reasonable duration subject to any limitation provided by the court in the court’s order.

What exactly does that mean? It probably means whatever the judge hearing the case thinks that it means, since there is no case law defining the terms used.

So what should you do if you are in a divorce or custody case and want Electronic Access with your child?

  1. Ask for it;
  2. Be ready to put on evidence of why the access you seek is in the Best Interest of your child;
  3. Be ready to put on evidence of the availability of the specific type of access you seek.

If you would like to discuss this or any other custody issues with the attorneys of the Beal Law Firm, please call us at 817.261.4333 or 214.414.0418, or write us at lawyers@dfwdivorce.com. You can find us on the web at www.dfwdivorce.com.

Divorce: How are stock options and restricted stock handled?

According to Texas law, at the time of divorce, all community property is divisible. Moreover, all property owned by the parties in a divorce is presumed community until and unless proven to be separate property.

The court has no jurisdiction to divest either party of his or her separate property. Jurisdiction means power. Divest means take. So the court has no power to take anyone’s separate property from them.

Employer Provided Stock Options and Employer Provided Restricted Stock that are owned at the time of divorce are divisible, just like any other property. The community portion is divisible, the separate portion is not.

So, in order to determine how much of the Options or Stock is divisible, you must first determine how much of it is separate and how much of it is community.

The Texas Family Code explains how to perform the calculations to find out what is separate and what is community.

Pursuant to Section 3.007 of the Code:

A spouse who is a participant in an employer-provided stock option plan or an employer-provided restricted stock plan has a separate property interest in the options or restricted stock granted to the spouse under the plan as follows:

if the option or stock was granted to the spouse before marriage but required continued employment during marriage before the grant could be exercised or the restriction removed, the spouse’s separate property interest is equal to the fraction of the option or restricted stock in which:

the numerator is the sum of

the period from the date the option or stock was granted until the date of marriage; and

if the option or stock also required continued employment following the date of dissolution of the marriage before the grant could be exercised or the restriction removed, the period from the date of dissolution of the marriage until the date the grant could be exercised or the restriction removed;

and

the denominator is the period from the date the option or stock was granted until the date the grant could be exercised or the restriction removed; and

if the option or stock was granted to the spouse during the marriage but required continued employment following the date of dissolution of the marriage before the grant could be exercised or the restriction removed, the spouse’s separate property interest is equal to the fraction of the option or restricted stock in which

the numerator is the period from the date of dissolution of the marriage until the date the grant could be exercised or the restriction removed; and

the denominator is the period from the date the option or stock was granted until the date the grant could be exercised or the restriction removed.

The Code also provides that the computation must be done separately “for each component of the benefit requiring varying periods of employment before the grant could be exercised or the restriction removed.”

So basically, the value of the Options or Stock that is attributable to the period before marriage or after marriage is separate property. The amount attributable to the time that a person is married is community. These concepts are completely consistent with the analysis done for all property to determine whether its character is separate or community.

If you would like to discuss your situation with the attorneys at the Beal Law Firm, please call us at 817.261.4333 or 214.414.0418 or write us at lawyers@dfwdivorce.com. You can find us on the web at www.dfwdivorce.com.

Divorce: Breaking it down to its parts

A divorce is a lawsuit. It is a strange kind of lawsuit, but it’s a lawsuit. Every divorce, whether labeled Uncontested, Contested, Amicable, Collaborative, Mediated or other must go through the court system.

Divorces can be broken up into a number of parts. There are procedural parts and substantive parts. This post is to discuss the procedural parts.

Every divorce must have at least three parts:

1. Petition

This is the beginning document that is filed with the court. It can be aggressive, nonaggressive, or somewhere in between. This is the document that begins the minimum 60 day waiting period for all cases other than those few that have an exception.

2. Decree

This is the ending document in every case. A few decades ago, Texas divorce decrees were relatively short. In many states they still are. In Texas, if the parties have children together and any significant property, the decree is likely to be 50-65 pages or more.

3. Proof of Notice to the Spouse

In theory, with rare exceptions, no one should be divorced without knowing about it. Typically, this notice takes place with either service of the petition on the spouse by a process server or with the spouse signing a Waiver of Service.

As long as the case has these three parts, it has everything that it is required to have. A “simple” divorce may have no more than these three parts. A complicated or contentious divorce is likely to have many more pieces.

A complicated or contentious divorce can have all of the parts that any other complicated or contentious civil lawsuit has, plus it can have a number of parts that few other cases have. So, in a very real sense, a complicated or contentious divorce may be one of the most procedurally complex types of civil litigation that our system has.

A complex divorce can have:

1. A Temporary Retraining Order

A Temporary Restraining Order (“TRO”) is not the same thing as a protective order. It does not criminalize conduct. In a divorce, it is much easier to get a TRO than in other civil cases, so they are much more common. A TRO is a court order that typically does not order anyone to do anything, but rather sets forth rules for what cannot be done. There are, however, TROs with “Extraordinary Relief” that do order parties to do things.

2. Temporary Orders

Temporary Orders are what a Temporary Injunction is called in Family Law. These orders are court orders that typically include all of the rules that were in the TRO, plus a number of rules requiring affirmative action, such as Temporary Child Support or Temporary Spousal Support. Additionally, the Temporary Orders are typically where one party or the other will be ordered to leave the home, if that happens.

3. Written Discovery

Written discovery typically includes Interrogatories, Requests for Disclosure, Requests for Admission, and Requests for Production. Think of it as a lot of homework that both parties can compel the other to complete.

4. Oral Depositions

A deposition is where a party is required to show up and answer questions under oath. The only right to remain silent is on questions involving criminal conduct. So, if asked a question about anything that does not arise to the level of a crime, for example adultery, the party must answer. Refusing to answer can lead to a jail sentence, and lying can lead to a charge of perjury — which can also lead to jail.

5. Multiple Motions for Additional Temporary Orders

Most civil cases do not have Temporary Injunctions (or Temporary Orders). In divorce, not only are Temporary Orders common, but Motions for Additional Temporary Orders happen routinely. That means that the fighting is not over just because a favorable result was obtained at the initial Temporary Orders hearing. Either side can ask the court again and again and again for new orders.

6. Multiple Other Motions

A divorce can have many other types of motions, in addition to the above. Some are typical of civil litigation — for example, Motions to Compel Discovery — and some are fairly unique to divorce — such as an order for Appointment of Receiver to Sell the Home.

Divorces can be complex. Attempting to handle a contested or complicated divorce alone may be a recipe for disaster.

To discuss any of this with the attorneys at the Beal Law Firm, please write us at lawyers@dfwdivorce.com or call 817.261.4333 or 214.414.0418. Our web address is www.dfwdivorce.com.

Collaborative Divorce: Fast Five Questions and Answers

There are lots of things about Collaborative Divorce that are misunderstood. These Five Questions and Answers should clear up some of the more common misconceptions:

1. Can my spouse and I do a Collaborative Divorce without lawyers?

No. The term Collaborative Divorce does not mean the same thing as Amicable Divorce, Agreed Divorce, or Uncontested Divorce. A Collaborative Divorce may in fact be amicable. If it ends with an Agreed Decree, then it is an agreed divorce. And a Collaborative Divorce may be more or less uncontested – for more on that see this earlier Blog post.

But, a Collaborative Divorce in Texas is by definition a case that is conducted pursuant to the Collaborative Family Law Act, which is Title 1A of the Texas Family Code. Section 15.052 of Title 1A states that a Collaborative Divorce is one “in which parties: (A) sign a collaborative family law participation agreement; and (B) are represented by collaborative family law lawyers.”

So, when a potential client comes to an attorney and says, “I have been doing a Collaborative Divorce with my husband/wife and his/her lawyer, but now I think I need to get a lawyer,” the potential client is at best mistaken as to what is going on, and at worst being defrauded.

2. Do we have to use Neutrals in our Collaborative law case?

The traditional Texas model for Collaborative Divorce is two lawyers, plus two neutrals – a Financial Professional and a Mental Health Professional.

The Financial Professional is tasked with gathering and assembling the financial information of the parties, helping the parties work on budgeting, and offering expertise on various financial matters.

The Mental Health Professional is not a part of the process to psychoanalyze the parties. His or her job is to help the parties develop a parenting plan, if there are children involved, conduct the meetings that are a part of the Collaborative Process, and offer suggestions for matters that will help meet the parties’ personal goals, e.g. closure with step-children.

But, there is no requirement that neutrals be used. Or that both neutrals be used. If the parties and the attorneys agree, a Collaborative Divorce can proceed without one or both of the traditional neutrals.

3. Do I have to use an attorney from the list that my spouse gave me?

No. Although many Collaborative Divorce attorneys are members of “Practice Groups,” not all are. Moreover, there is no requirement that a husband or wife choose a Collaborative attorney from the list provided by his or her spouse.

There is no requirement to choose an attorney from any Practice Group and the choice of an attorney is completely up to the party.

4. Will a Collaborative case be faster than a non-collaborative case?

There is no way of knowing. A collaborative divorce may be faster than a litigation case, but it may also take more time. A non-collaborative divorce must last for at least 60 days, unless a waiver is obtained based upon family violence. How much longer a case lasts depends upon whether the parties are able to settle and when. For more on the stages of a divorce, see this prior blog post.

It is unlikely that a Collaborative Divorce will take less than 60 days, but many Collaborative cases end far earlier than many hotly contested divorces.

5. Will a Collaborative Divorce be less expensive than a non-collaborative divorce?

Once again, there is no way of knowing. Collaborative Divorces involve a series of meetings with at least two attorneys, and probably two neutrals billing at hourly rates.

Prior to each meeting, there may be some telephone calls between the attorneys and their clients and between the Team of attorneys and neutrals – all billed at hourly rates. There may be pre-meetings of the Team before the Joint meetings of everyone, and there is typically a Team debriefing period after the meeting – all billed at hourly rates.

Given that it is unlikely that a Collaborative Divorce would be wrapped up without at least three or four lengthy meetings, it’s not hard to see that there may be considerable cost to a Collaborative Case.

But, given that a non-collaborative case can involve lengthy hearings with a considerable number of hours spent in preparation by both sides, and can sometimes involve both parties hiring financial and/or mental health experts, it’s easy to see that in some cases Collaborative Divorce is much less expensive than non-collaborative divorce.

Bonus Question:

6. Is Collaborative Divorce only appropriate if there is no conflict?

No. Collaborative cases can have much of the same angst that traditional cases have – sometimes more. A Collaborative Divorce has many benefits that traditional cases do not, and they can be successfully completed even where the parties have serious disagreements and issues.

To discuss your case and whether it would be a good candidate to handle in the Collaborative Model, call us at 817.261.4333 or 214.414.0418. You can also write us at lawyers@dfwdivorce.com or find us on our website www.dfwdivorce.com. We are Beal Law Firm, PLLC.

Is Collaborative Divorce the Same Thing as Uncontested Divorce?

Recently, we conducted a very unscientific poll on the @BealLawFirm twitter account. The question asked was, “Do you know the difference between a Collaborative Divorce and an Uncontested Divorce?” The choices were: “1) Yes, 2) No, and 3) Aren’t they the same?” Fewer than 6 in 10 people even claimed to understand the difference between the two – and a huge percentage of the account followers are lawyers, law firms, etc.

So, with more than 4 in 10 people possibly not understanding the difference between the two – or even if there is one, it seems that Collaborative Divorce bears some explaining.

Collaborative Divorce is an alternative to traditional divorce. Traditional divorce is conducted in the litigation model, whereas Collaborative Divorce is an entirely different model.

In the Litigation Model, divorces typically move through several stages until the case is either settled or makes it to trial. The stages are:

  1. Negotiation between the parties;
  2. Negotiation between the attorneys;
  3. Mediation;
  4. Post-mediation negotiation; and
  5. Trial.

Throughout all of these stages, the parties can engage in formal discovery – including written interrogatories, requests for production, requests for admission, requests for disclosure, written depositions, and oral depositions – and/or ask the court to grant various requests in countless motions and hearings.

In a Collaborative Divorce, the parties agree that they will suspend their rights to engage in anything other than formal meetings between themselves and the rest of the collaborative team, which typically includes their attorneys and two neutral professionals. One of the neutrals is known as the Financial Professional (FP) – usually a CPA, CFP, or CDFA – and the other is the Mental Health Professional (MHP). Although the MHP is likely to be a psychologist or licensed clinical social worker, the role of the MHP is not to counsel or analyze any of the participants. Rather, the MHP’s job is to run the meetings and help the parties arrive at an agreement on parenting issues. The FP’s job is to gather the parties’ financial information and help construct current and proposed budgets.

So, with all that being said, what is a Collaborative Divorce? It is a series of meetings in which the parties attempt to arrive at an agreement on all issues in their case. Because the meetings and everything discussed at the meetings are confidential, should the process break down, the parties are free to re-enter the Litigation Model, but both of the Collaborative Attorneys MUST withdraw from representation at that point.

What is an Uncontested Divorce? It is an ill-defined term that everyone uses to describe a case in which the parties to a divorce argue to a lesser degree than the arguing that takes place in a divorce that is referred to as a Contested Divorce.

The terms do not mean the same thing, because typically when an attorney speaks of an Uncontested Divorce, he or she is talking about a case in which the parties are in the Litigation Model, but able to arrive at an agreement fairly early in the process. The term Collaborative Divorce is reserved for divorces that are being conducted in the Collaborative Model and under the rules for Collaborative Divorce promulgated in the Texas Family Code.

If you would like to discuss your needs with respect to a Collaborative Divorce, Uncontested Divorce, or Contested Divorce, please contact us at lawyers@dfwdivorce.com or find us at www.dfwdivorce.com.