New Law Helps Clarify How to Get Reimbursed In a Texas Divorce

Getting a fair division of property in a Texas divorce can be complex, but it is  further complicated when claims for reimbursement and economic contributions come into play.

However, effective September 1, 2023, legislative changes to Chapter 3, Subchapter E of the Texas Family Code have provided some clarity in this area. The amendments focus on what constitutes a reimbursement claim and offset, as well as what elements must be proved to recover such claims or offsets. Here's what you need to know:

What Constitutes a Reimbursement Claim?
According to the new law, a claim for reimbursement exists when one or both spouses use the property of one marital estate to benefit another estate in a way that would result in unjust enrichment if not repaid. This could be as straightforward as using community funds to pay off a debt that should be the responsibility of one spouse's separate property.

Proving a Reimbursement Claim
To establish a valid reimbursement claim, the spouse seeking reimbursement must prove:

1. Usage of property from one marital estate to benefit another.
2. The value of the conferred benefit.
3. That unjust enrichment would occur if the benefit isn’t repaid.

Benefits Conferred on Another Marital Estate
The new amendments define "benefit conferred" in several ways:

1. Payment of a debt, liability, or expense that should have been paid by the benefited estate.
2. Making improvements on real property, resulting in enhanced value.
3. Investing time, toil, talent, or effort beyond what's necessary to manage or preserve a spouse's separate property, without adequate compensation to the community estate.

Determining the Value of Benefits
The value of the benefit is determined as of the date the trial begins. It can be calculated based on:

1. The amount of debt, liability, or expense paid.
2. The increased value of the real property.
3. The value of the time, toil, talent, or effort spent.

Unjust Enrichment: A Court's Decision
The court will decide whether unjust enrichment has occurred, taking into consideration all aspects of the case.

Resolving Reimbursement Claims
The court uses equitable principles to resolve these claims, including the possibility of offsetting one claim against another.

Offset Claims
An offset claim can be proven by the spouse not seeking reimbursement, who bears the burden of proof. Offsets can include:

1. Value of the use and enjoyment of the property by the conferring estate.
2. Income received by the conferring estate from the benefited estate.
3. Any reduction in tax obligations due to tax-deductible items related to the benefited estate.

The changes to Chapter 3, Subchapter E of the Texas Family Code seek to clarify the complexities surrounding reimbursement claims and economic contributions in the context of divorce. As always, consulting with an experienced family law attorney is crucial for navigating the intricate details of this legal landscape.

​