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What is Divorce Fraud in Texas?

The division of community property in a divorce can be affected by claims of divorce fraud made by one spouse against the other. Texas is a community state in which any property acquired by the spouse during the marriage belongs to both parties (with a few exceptions).

It means that community property is usually split equally between two spouses in a Texas divorce. However, the distribution of assets can be unequal if any spouse raises and proves a claim of divorce fraud.

If you believe that your spouse committed fraud before or during the divorce in Texas, consult with a Fort Hood divorce lawyer to help you prove your claims of fraud to fight for a larger share of the community assets.

What is Considered Fraud in a Texas Divorce?

In Texas, a spouse may commit fraud if they transfer community assets, abuse, or waste funds that belong to both spouses with the intent to deprive the other spouse of their fair share.

In order to prove divorce fraud, the spouse who alleges that their spouse engaged in fraudulent conduct must prove that the spouse’s actions involve dishonesty or intent to deceive.

If the spouse successfully proves divorce fraud, they may be entitled to a larger share of the community assets in the distribution of property. If the fraud was egregious and/or there are not enough community assets to compensate the defrauded spouse, they may be awarded monetary damages.

What is Actual vs. Constructive Fraud in Texas Divorce?

Texas courts recognize two types of divorce fraud: actual and constructive. Both types of fraud can result in one spouse receiving a larger share of community property in a divorce.

Actual Fraud

A spouse can be guilty of actual fraud when their acts of dishonesty involve the intent to deceive their spouse. In most cases involving actual fraud, the spouse commits fraud with the help of a third party such as their friend or new romantic partner.

In order to prove actual fraud in a Texas divorce case, the wronged spouse must prove that their spouse:

  • Engaged in acts of dishonesty; or

  • Had the intent to deceive them.

It is advisable to be represented by an experienced divorce attorney to help you prove actual fraud.

Constructive Fraud

In divorce cases, constructive fraud is categorized into two categories:

  1. Waste of community assets

  2. Breach of fiduciary duty

When people are married, they have a duty to act in the best interests of their spouses. In addition to that obligation, spouses owe one another a fiduciary duty to avoid wasting community assets.

When one spouse transfers, sells, or otherwise disposes of community assets without the other spouse’s consent with the intent to deprive them of a fair share of the property, the spouse can be guilty of wasting community assets.

The biggest difference between actual and constructive fraud is that the latter does not require the wronged spouse to prove that the other spouse acted dishonestly or had the intent to deceive. Therefore, a spouse is more likely to succeed on a constructive fraud claim when there is not enough evidence to prove an actual fraud claim.

What Are the Examples of Divorce Fraud in Texas?

Some of the most common examples of fraud in Texas divorces include:

  1. Hiding assets that belong to the other spouse;

  2. Wasting or spending marital assets or funds on an extramarital affair;

  3. Selling community assets with the intent to exclude them from distribution;

  4. Transferring community property to third parties as gifts; and

  5. Acquiring debt before or during the divorce process with the intent to make their soon-to-be-former spouse pay for it.

It is essential to consult with a knowledgeable divorce attorney if you think that your spouse committed fraud.

When Can a Spouse Be Guilty of Divorce Fraud?

The judge will consider a number of factors when determining whether or not a spouse is guilty of divorce fraud to justify an unequal division of community property.

Under Texas law, spouses can make gifts, transfer community property, or spend marital assets when such gifts, transfers, and expenditures are moderate and justified.

However, when such gifts, transfers, and expenditures are unfair, excessive, or involve dishonesty or the intent to deceive the other spouse, that spouse may be guilty of divorce fraud.

The judge will determine the reasonableness of the gifts, expenditures, and transfers of community property by considering the following factors:

  1. The relationship between the spouse and the recipient of the community asset;

  2. The presence of special circumstances to justify the gift, expenditure, or transfer of community property; and

  3. The reasonableness of gifting, spending, or transferring the community assets in proportion to the remaining community assets.

What Happens When a Spouse is Guilty of Divorce Fraud?

If the court determines that a spouse is guilty of divorce fraud, it will take the following actions to award a larger share of community assets to the wronged spouse:

  1. Determine the total value of the spouses’ community assets had the spouse not committed fraud;

  2. Calculate the value of the community asset that was affected by the spouse’s fraud; and

  3. Divide the community assets between the spouses in a just and right manner and ensure that the wronged spouse receives a larger share of the remaining community assets to compensate for divorce fraud.

In order to divide the community property in a just and right manner, the wronged spouse may be awarded monetary damages in addition to or instead of a larger share of community assets.

Contact a Fort Hood Divorce Lawyer Today

If you believe that your spouse committed divorce fraud, do not hesitate to contact an experienced lawyer to help you succeed on your claim of fraud. A Fort Hood divorce lawyer will protect your fair share of community property if you have become a victim of actual or constructive fraud.

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Schedule a free, no-obligation consultation with our divorce lawyers at The Law Office of Brett H. Pritchard by calling 254-501-4040.
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