Monday, December 29, 2008

What is a Qualified Domestic Relations Order, or QDRO?

A Qualified Domestic Relations Order (Acronym - QDRO and pronounced "Quad-Row") is a Court Order that splits up various types of retirement accounts. Federal law (ERISA) generally does not permit state court judges to require that the person who administers a retirement account (the "Plan Administrator") immediately pay retirement benefits out to a divorcing spouse, even though the accumulated benefits may be community property (in a community property state such as Texas). For this reason, the alternate payee is said to receive the benefits "if, as, and when" the retiree or employee receives the benefits. As a result, the QDRO will assign to an "alternate payee" (who is usually the divorcing spouse) the right to receive all or a portion of retirement plan benefits payable to a "participant" (or the employee). A QDRO can also sometimes be used to collect child support or spousal maintenance.

Saturday, December 13, 2008

Texas Waiting Period for New Marriage After Divorce

Sometimes we are asked the question: “How long do I have to wait before I can remarry?” Despite the obvious question – “Why are you trying to remarry so soon after you just divorced?” Nevertheless, if you are not dissuaded by a recent divorce, (say, for example, your adulterous relationship has produced a child) here’s how it works: After your divorce, you are not permitted to remarry another person before the 31st day after the date the divorce was “decreed” (usually meaning the day the Decree was signed). The only proviso is that when “good cause” is shown (again perhaps the child example above) the court can waive the prohibition against remarriage if a record of the proceedings is made (in open court with a court reporter) or with “written findings of fact” prepared and signed by the Judge. The only exception is that the former spouses can remarry at any time.

Divorce Name Change in Texas

At the time a divorce is granted (or annulment or suit to declare a marriage void) the court shall grant a name change to a name used prior to the divorce, unless the court states in the decree a reason for denying the change of name. The court cannot deny a change of name solely to
keep last names of family members the same. You should also be aware that you can apply for a “Change of Name” certificate from the clerk of the Court.

FAQ: Can I get Alimony in Texas?

No. There is no “Alimony” per se under Texas law. However, the Court can grant “spousal maintenance” in certain limited circumstances, such as when: (1) there has been a conviction (or a grant of “deferred adjudication”) for an act involving family violence within two years of the filing for divorce, or during the pendency of the divorce, (2) the parties have been married for at least ten years and the spouse seeking the maintenance “lacks sufficient property” . . . “to provide for the spouse's minimum reasonable needs” and when any one of the following [a, b, or c] exist: (a) the spouse seeking the maintenance is unable to support him or herself through “appropriate employment because of an incapacitating physical or mental disability,” (b) the spouse seeking the maintenance is the custodian of a child of the marriage (of any age) who requires substantial care and personal supervision because of a physical or mental disability, or (c) the spouse seeking the maintenance “clearly lacks earning ability in the labor market adequate to provide support for the spouse’s minimum reasonable needs.”

Saturday, November 22, 2008

Real Property Division in Divorce

One of the more difficult assets to divide during a divorce is that of real property, such as the marital homestead. The reasons for the difficulties include: (1) the fact that both of the parties reside in the home, (2) it can accumulate a substantial amount of equity, and (3) there is usually secured debt upon the residence (mortgage, home improvement loans, or home equity financing). As a result, most personal property, stocks, bonds, and financial accounts are easier to split up. There are potentially many ways to deal with real estate. However, in the situation where the divorcing spouses jointly own a single, marital residence, descriptions of the two most common ways to deal with the house:

(1) Sell The Home: The home can be listed for sale with a real estate broker and sold. The net proceeds of the sale (if any) would then be divided between the spouses as any other asset of the marriage. This is certainly the simplest way to go. It promotes certainty, it is easy to figure the equity, and it removes a significant liability and the entanglements that come with joint ownership and the joint liability. However, it will displace the family, including the children from the home. As a result, it will likely be the most disruptive. The other downside with selling the home is that there are usually significant closing costs with the sale and disposition of real estate. These expenses will be duplicated three times if each of the spouses are going to then buy their own home after the divorce.

(2) Conveyance to the Other Spouse: The second most common option regarding the marital homestead is a conveyance from one spouse to the other. Usually when children are involved the "primary" parent is the one that stays in the house. For example, in one of the the most common scenarios, the Wife stays in the home with the children and the Husband moves to an apartment. In this example, the Husband would sign a Deed (what is generally referred to as a Special Warranty Deed) and the Wife would then own the home outright. Most people understand that one spouse then owns the home, but many people do not understand what happens with the secured debt on the home.

WHAT ABOUT THE SECURED DEBT? Occasionally, the Judge will Order that the spouse who received the home refinance it (or the parties will agree to this), but oftentimes (due to high-interest rates, lack of credit, lack of income to justify the mortgage ratios, or, as we have now, the possibility of a lack of available lenders and funding) the acquiring spouse will not be able (or it will not be economically feasible) to refinance the home. What many people don't realize in this situation is that just because the home is conveyed from one spouse to the other, does not mean that the conveying spouse is no longer liable for the debt. The spouses and the Court cannot modify the contractual rights of the Mortgage Lender. Additionally, unless there is substantial equity in the home, and, in part, due to the fact that during a divorce the lender will be concerned regarding repayment, it is very rare that the lender would be willing to release the conveying party.

In this situation, the family law lawyer can assist by preparing the documents necessary to equalize the rights of the parties. In essense, the acquiring spouse will "asssume" the mortgage indebtedness. The conveying spouse will then receive a Deed of Trust to Secure Assumption (DOTTSA) - signed by the acquiring spouse. The Deed of Trust to Secure Assumption will allow the conveying spouse to foreclose his or her own lien, reacquire the property, and then either refinance, cure, or pay-off the note(s) owned by the Lenders (and potentially any other liens that have been placed upon the property).

A "Second lien" is what is held by the conveying spouse. This type of lien is generally "inferior" to that of the "superior" Purchase Money Security Interest that will be held by the Mortgage Lender. Because of the fact that the lien held by the conveying spouse is inferior, it is important for this spouse to notify the Mortgage Lender of this lien (preferably in writing) so that in the event of a foreclosure, the lender will notify the inferior lien holder of the impending foreclosure. This will allow the spouse holding the inferior lien to cure any defaults and then foreclose him or herself. The foreclosure will be "subject to" the lien held by the Mortgage Lender. In other words, the primary note will still have to be refinanced, paid-off, or sold with the new buyer then "assuming" the Note and making the payments. Because of the relative speed at which a Mortgage Lender can foreclose (potentially 45 days with a residence, and even less on non-residential property), it is important to keep up with the status of the loan.

WHAT ABOUT THE EQUITY? Because the spouses can build up a substantial amount of equity through: (1) payments on the mortgage, (2) an appreciation in value of the home, and/or (3) home improvements (sometime referred to as "sweat equity," many times the spouses are confronted with the difficult task of attempting to fairly dividing the marital assets when the marital residence has substantial value. This is generally accomplished inat least three ways.

(1) Refinance the Home and Pay Cash. The first way, as discussed above, is to do a refinance of the home and take the "cash out" option. If this can be done it is the easiest way, but, as addressed above, sometimes the acquiring spouse will not be able to make use of this option.

(2) Offsetting Assets. The next way to do this is with offsetting assets. For example, if there is a retirement account or another assets with substantial value the other spouse can receive this asset, rather than equity out of the home.

(3) Owelty Note. An "Owelty" Note -- think of it as "I Owe" -- is one of the ways to accomplish the equalization. In this option, the conveying spouse would, in essence, become a secured lending for his / her spouse. The Note can carry with it any number of terms as with any other Note, such as interest only payments, a balloon, equal month payments, or other financial options. You will want to discuss these potential options with your attorney to come up with a plan that works for everyone. Again, this type of Note would be a second lien and have the peculiar problems associated with this type of Note. This option also requires more involvement by the family law lawyer, but it is a relatively easy way to equalize the equity.

Monday, September 22, 2008

Criminal Laws Regarding Adoption

In Texas, an attorney cannot help prospective adoptive parents locate a child for adoption. Moreover, prospective adoptive parents may not advertise in the public media for a child. It is a Class B misdemeanor for a person to serve as an intermediary in the identification of a birth mother who may desire to place a child for adoption. Importantly, one must be extremely careful regarding the providing of any financial assistance whatsoever to a birth mother, because it is illegal (at least a third-degree felony – 2 years to 10 years in prison), among other things, in Texas to offer to give, agree to give, or give a thing of value to another for acquiring a child for the purpose of adoption. The Sale or Purchase of a Child provisions, and the provisions regarding serving as an intermediary in the identification of a birth mother, of Texas’ penal statutes are very broad, so you will want to consult an attorney about any contemplated arrangement before taking action of any kind.

Monday, June 30, 2008

What is a Subpoena?

A Subpoena is the method by which a person is required or “compelled” to attend an official court proceeding. Under the Texas Rules of Civil Procedure the witness can be “commanded” to appear for a deposition, hearing or trial. However, in Texas, the Subpoena may not compel the witness to travel in excess of 150 miles from where the person resides or where the person is served. Texas also allows for the service of a Notice of Deposition when the witness is a “party” to the lawsuit (usually Plaintiff, Defendant, or Petitioner or Respondent in a family case), and, when served on the party or attorney, it has the same function as a subpoena. Sometimes the party issuing the Subpoena will also request that the witness bring documents with them to the Court hearing or deposition and this is usually called a Subpoena Duces Tecum.
If the witness ignores the Subpoena, then the party who compelled the witness to attend may request a Writ of Attachment, to have the Sheriff or Constable bring the witness to Court, forcibly if necessary. Alternatively, if the witness refuses to appear, the party issuing the Subpoena may file a Motion requesting that the witness be held in contempt of court. If the witness has a valid excuse, or if the Subpoena causes undue expense or burden, then the witness may file a “Motion to Quash” the subpoena or a Motion for a Protective Order.

Tuesday, April 1, 2008

Children and Divorce

Divorce is difficult for everyone involved, but it can be an especially hard on children. However, there are ways parents can help their kids through these rough times. Author Max Sindell watched his parents divorce as a child. He has since written about his experience so that parents may better help their own kids. He has set out seven rights that all kids should have after a divorce.

1. The right to feel safe and secure
2. The right to awareness
3. The right to counseling
4. The right to be heard
5. The right to be independent
6. The right to remain neutral
7. The right to private communication

For more information see Max Sindell’s article, When Parents Part Ways: Smart Steps to Protect the Basic Rights of Children Dealing with Divorce, in the January 2008 edition of the Austin Family magazine.

Thursday, February 28, 2008

Informal Settlement Conference and Signing of Documents

Often parties feel that a case would settle if only they could discuss matters directly with the other party or spouse. Sometimes we are asked by clients whether they can or should meet directly with the other party. In other words – can the Husband and Wife meet to talk about settlement without their attorneys present?

As a general rule, we remain neutral about informal discussions when initiated by the parties themselves. However, we sometimes actively discourage such direct, face-to-face communications, depending upon how emotional a case has become or other factors, to prevent discord and unintended consequences. For example, one party may feel that the other is trying to take control of the informal discussions. This can polarize the situation and make matters worse. Once there is mistrust between the parties, attorneys often spend more time trying to undo emotional damage, rather than discussing resolution of the parties’ legal issues. When there is much at stake (such as when children or divisive and emotional issues are involved), then it is our general belief that settlement meetings should be handled through the parties’ attorneys or by a trained and experienced mediator.

It is important to understand that attorneys can never discuss matters directly with an opposing party who is also represented by an attorney. See State Bar Rules, Rules of Professional Conduct, Rule 4.02 (a). This rule also prohibits attorneys from making settlement offers through their client directly to the other party – what cannot be accomplished directly cannot be done indirectly. However, attorneys cannot prevent a client from talking about their case directly to the other party.

In short, the parties are certainly allowed and may agree to informal settlement conferences without their lawyers present. However, you should never do this if you feel that you may be in danger, if there is a protective order, or if you cannot speak to one another in a respectful and courteous manner. Keep in mind that you may not communicate with the other party by the use of “vulgar, profane, obscene or indecent language or in a coarse or offensive manner, with the intent to annoy or alarm the other,” Tex. Fam. Code § 6.501 (a) (1), and you may not “threaten . . . to take unlawful action against any person, intending by this action to annoy or alarm the other,” Tex. Fam. Code § 6.501 (a) (2).

One final point, if you do agree to meet, we strongly advise against signing anything. You can always contact your attorney and explain your understanding of the informal settlement. You can also take your own notes. However, you should understand that if you sign a document – no matter how “informal” it may seem – you may find yourself bound to an agreement that is not in your best interest, or that may actually prevent you from taking certain actions in the future. Thus, you should always consult your attorney and have the attorney review any document before signing.