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Texas Divorce: Reimbursements and Offsets
After about a decade of marriage to an “economic contribution” statute, the Texas legislature officially filed for divorce in 2009 and reinstated a “reimbursement” statute.

After about a decade of marriage to an “economic contribution” statute, the Texas legislature officially filed for divorce in 2009 and reinstated a “reimbursement” statute. The new reimbursement statute expands the number of situations when reimbursement can be used to recover for monies or talents spent by one marital estate for the benefit of another.

The Economic Contribution Statute

In a marriage, there are three separate estates:

  1. The community estate
  2. The wife’s separate estate
  3. The husband’s separate estate

If one estate contributed to the benefit or enhancement of another (typically these claims involved real estate), an economic contribution claim could be made by one spouse during a divorce, requesting that the spouse who received the benefit repay or reimburse the contributing estate. Economic contribution was a complicated doctrine involving complex formulas to determine the amount to be reimbursed by using appraisals, offsets, and determining exact amounts owed on property at different periods of the marriage.

The New Reimbursement Statute

The new reimbursement statute, Texas Family Code § 3.402, codifies nine different types of reimbursement, but it does not specifically limit reimbursement claims to those types listed. The reimbursement statute is equitable in nature and does not require that specific dollar for dollar values to be used. Often, reimbursement claims will be for the value of the enhancement to the property and not the specific amount contributed.

A reimbursement claim can be “offset,” however. This means that the claim can be reduced by the amount that the party making the claim “benefited” from the use and enjoyment of the property. Examples of benefits are tax deductions and the value of living expenses avoided due to the separate property, including rent.

The new statute also recognizes “time, toil and talent” as a reimbursement claim. This is the recognition of a claim for contributions that are not purely monetary, but rather for efforts on behalf of the estate that go beyond what is necessary for regular upkeep and preservation of the property, assuming those efforts have not already been fairly compensated.

The division of property can be one of the most complex aspects of a divorce, and just determining what property belongs to which estate is often contentious. Matters may become more complex when both spouses enter the marriage with large separate estates. For questions about the new Texas reimbursement statute and how it may apply to your divorce, speak with an experienced family law attorney.

Keywords: Reimbursement
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