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FAQ
FAQs: Understanding the Updated Texas Reimbursement Statute in Divorce Cases
Q: What is the reimbursement statute in Texas divorce cases?
The reimbursement statute allows one marital estate (such as community property) to seek repayment when it has financially benefited another estate (such as separate property) in a way that would otherwise result in unfair enrichment.
Q: Why was the reimbursement statute updated?
The prior version of the Texas divorce reimbursement statute led to confusion and inconsistent rulings, as some family law practitioners misinterpreted the law as being narrower than intended. The 2023 update aligns the statute with existing case law and clarifies how reimbursement claims should be handled.
Q: How did this change come about?
Goranson Bain Ausley attorneys Kristal Thomson and Chris Nickelson played a key role in reviewing and refining the law. Their work, along with the efforts of the Texas Family Law Section’s Law and Policy Committee, led to a legislative update that took effect on September 1, 2023.
Q: How does reimbursement work in a divorce?
If one spouse’s property benefits another estate (be it community or the separate estate of the other spouse), or community funds are used to benefit a separate estate, the court may order repayment if it finds that failing to do so would create unjust enrichment. Examples include:
- Using community funds to pay down the mortgage on a separate property home.
- Using separate property funds to pay the mortgage on a community property home.
- Using community resources to improve a separate property residence, resulting in an increase in value.
- A spouse using their time and effort to enhance their separate property business’s value beyond what was necessary to maintain it.
Additional Resources:
Characterizing Separate and Community Property in Texas
Separate vs Community Property
Q: What are the key elements of a reimbursement claim under the updated Texas divorce reimbursement statute?
To make a successful reimbursement claim, a party must prove:
- One estate conferred a benefit on another.
- The value of the benefit.
- Failing to reimburse would result in unjust enrichment.
Q: What is different about the new law?
- It expands the types of reimbursement available in a divorce case.
- It ensures that courts can consider things like interest payments on a mortgage, not just the principal paydown as in prior interpretations of reimbursement law.
- It returns to the reimbursement claims’ equitable roots, giving judges more discretion in fairly dividing assets.
Q: How does this impact my divorce case?
If your case involves significant assets and reimbursement claims, this change may provide more legal clarity and a stronger basis for equitable relief. A family lawyer experienced in high-asset divorce can help evaluate your specific situation.
Q: What should I do if I think I have a reimbursement claim?
Consult a knowledgeable family law attorney in Texas who can analyze your property division and assess whether reimbursement applies.
For more details, read Kristiana Butler’s full article in Texas Lawyer.
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