Read Texas Finance Code §59.006.
See here for a model bank records request form.
A Final Decree of Divorce often uses boilerplate language. One example of boilerplate language in a Final Decree is the Retirement Clause. Although the meaning of the Retirement Clause may appear straightforward, questions arise when one party receives money after the divorce.
The Retirement Clause reads as follow:
Assigning to wife/husband “All sums, whether matured or unmatured, accrued or unaccrued, vested or otherwise, together with all increases thereof, the proceeds therefrom, and any other rights related to any profit-sharing plan, retirement plan, Keogh plan, pension plan, employee stock option plan, 401(k) plan, employee savings plan, accrued unpaid bonuses, disability plan, or other benefits existing by reason of the wife’s/husband’s past, present, or future employment.”
Often, a lawsuit will arise when one of the ex-spouses receives money after the divorce. The first question, then, is to determine whether the Retirement Clause governs the newly received money. Generally, the clause governs because it operates as a catch-all. But courts may find reasons to rule differently.
In Stephens v. Marlowe, 20 S.W.3d 250 (Tex. App.—Texarkana 2000, no pet.), the court ruled that the ex-husband was not entitled to a portion of the money the ex-wife received. Jennifer argued that the retirement provision governed the $50,000 pension plan and awarded it all to her. James, however, claimed that the $50,000 pension was community property not yet divided by the divorce decree. The court awarded the money all to Jennifer reasoning that the retirement provision unambiguously awarded the money to Jennifer.
In Archibald v. Archibald, 01-08-00015-CV (Tex. App.—Houston [1st Dist.] June 4, 2009, no pet.), the court ruled that the ex-wife was not entitled to a portion of the money the ex-husband received. Larry received over $200,000 in overtime benefits after the divorce for work done during their marriage. Aurore argued that the court should award her a portion of the money because it constituted community property. The court ruled that the divorce decree assigned the overtime benefits to Larry.
In Boyd v. Boyd, 67 S.W.3d 398 (Tex. App.—Fort Worth 2002, no pet.), the retirement provision prescribed a 50/50 split between the spouses. Randall argued (1) that all future increases in value of his defined benefit plans and 401(k) plan were separate property, and (2) that his stock options were partly separate property. First, the court agreed that the post-divorce increases in value attributable to the Randall’s post-divorce contributions were separate property. However, increases in value not attributable to post-divorce contributions were community property. Second, the court ruled that his stock options were entirely community property because Randall’s opportunity to purchase the stock options was due to his management position with the company. So, although a 50/50 split in the divorce decree was uncommon, the divorce decree still governed the property’s division.
See also Pribyl v. Pribyl, 307 S.W.3d 882 (Tex. App.—Austin 2010, no pet.).
There are two kinds of child support calculators. One type of calculator determines the current monthly amount the obligor owes to the obligee. This amount will change as the obligor’s income changes. The Texas Attorney General’s office hosts this kind of calculator on their webpage.
The second type of calculator determines the interest on backpay. An excellent product for calculating interest on child support arrears is Legal Math. Legal Math has many features and is able to take into account irregular payments and changing current child support obligations.
There are other considerations when calculating interest on child support arrears. First, Texas law has used different interest rates. Second, section 157.265 of the Texas Family Code applies simple interest rather than compound interest to child support arrears. Third, judgments confirming arrears lump the principle and interest into one figure.
Effective on September 1, 1991, the Texas legislature implemented its first statute establishing interest on child support arrears. Section 14.34 (“Accrual of Prejudgment Interest on Child Support”) established that an unpaid child support obligation would accrue at the rate of 10% compounded monthly. Act of June 16, 1991, 72d Leg., R.S., ch. 467 §§ 1,6, 1991 Tex. Gen. Laws 1693, 1695.
Effective September 1, 1993, the legislature changed the interest rate from 10% compounded monthly to 12% simple interest per year. Act of May 15, 1993, 73d Leg., R.S., ch. 150 §§ 1,3, 1993 Tex. Gen. Laws 302.
Effective April 20, 1995, the legislature replaced section 14.34 with section 157.265 (“Accrual of Interest on Delinquent Child Support”) continuing with the interest rate of 12% simple interest per year. Act of April 20, 1995, 74th Leg., R.S., ch. 20 §§ 1, 4, 1995 Tex. Gen. Laws 113, 184, 282.
Effective January 1, 2002, the legislature changed the interest rate from 12% simple interest per year to its current rate of 6% simple interest per year. Act of May 18, 2001, 77th Leg., ch. 1491, § 1, R.S., 2001 Tex. Gen. Laws 5294.
These interest rate statutes apply prospectively but not retrospectively. In re M.C.C., 187 S.W.3d 383, 384 (Tex. 2006); In re A.R.J., 97 S.W.3d 833, 834-35 (Tex. App.–Dallas 2003, no pet.). This means that overdue child support payments are governed by the interest rate that was in effect at the time the child support payment became due.
Section 157.265 of the Texas Family Code applies simple interest rather than compound interest to child support arrears. This means that interest only accumulates on the principle. Interest does not accumulate on the previously accumulated interest. An exception to this rule, however, is when a court makes a determination on the child support arrears.
Judgments determining the child support arrears often do not distinguish between how much of the judgment amount is principle and how much is accumulated interest. In these cases, the practice is to treat the judgment amount as the new principle.
If you have to calculate more than a couple months of interest, having a program may be faster than calculating interest by hand. The formula for calculating interest on child support arrears is
Interest = the principle x the interest rate x the number of days since the last transaction / the number of days in that year.
This method of calculating arrears benefits the obligee because interest accumulates each day. The Lubbock Attorney General’s Office, on the other hand, uses a different method of calculating interest. The OAG only calculates interest one time per month. This method benefits the obligor because the obligor could potentially receive 30 days of no interest every month on the payment amount.
Child support liens are one tool an obligee has to ensure that an obligor pays his child support obligation. One should file a “Notice of Child Support Lien” with the county clerk in the county where the obligor lives or in any county where the obligor is believed to own property. Liens attach to both real and personal property.
Make sure the lien contains all the requirements stated in §157.313 of the Family Code.
Here is a sample “Notice of Child Support Lien.”
In re Marriage of Everse, 07-11-00220-CV (Tex. App.—Amarillo June 18, 2013).
When dividing property in divorce, Texas courts distinguish between separate property and community property. A spouse keeps all of his separate property. Community property, on the other hand, is divided between the divorcing spouses.
In the Everse case, the Amarillo Appellate Court made two significant additions to the division of Social Security benefits in divorce.
First, invested Social Security benefits are a person’s separate property as long as the benefits are traceable. The Court sites an Idaho case with similar facts. Bowlden v. Bowlden, 794 P.2d 1145 (Idaho Ct. App. 1989), remanded, 794 P.2d 1140 (1990). “There, the husband began receiving monthly Social Security benefits during the marriage. The marital community had sufficient other income to support the couple so the benefits the husband received from Social Security were deposited in checking and savings accounts. At the time the parties were divorced, the husband claimed the money he received from Social Security was his separate property, while the wife maintained it was community in nature.” The Amarillo court adopted the reasoning of the Idaho court and other courts: the Supremacy Clause of the US Constitution causes federal statutes to supersede state family law with regard to Social Security benefits.
Second, foreign Social Security benefits are community property. The parties married in 1993, and Mr. Everse began receiving Dutch Social Security benefits in 1996. The Dutch Social Security benefits were a product of Mr. Everse’s work in the Netherlands from 1948 through 1960. The Court ruled that without something more than merely evidence that his foreign income was Dutch Social Security, the foreign income was community property.
Where does the Appellate Court leave us? The Appellate Court does not tell us what would be sufficient for foreign Social Security to be a person’s separate property.