529 plans are a common asset that’s divided in a divorce. Perviously these funds could only be used for college expenses. The new Tax Cut and Jobs Act changes that to allow 529 plans to be used for homeschooling and private school tuition up to $10,000 per year. This option should be part of any settlement discussion going forward in any child custody divorce. It will also be interesting to see whether courts weigh in on disputes between parents as to what to do with these plans. The current state of the law does not allow a court to order college expenses be paid by a parent, but they are allowed to address the educational children. Stay tuned.
The language in the Texas Family Code creates two rights that directly affect what school a child will attend. The first is the right to determine the child’s primary residence and the second is the right to make educational decisions. The code requires in a contested hearing that one parent be given the exclusive right to determine the child’s primary residence but allows the Court to require both parents make educational decisions by agreement. In the large majority of cases this is exactly what the Court order will say. Notice that neither right specifically addresses what school the child would attend if there is not an agreement.
The appellate Courts have weighed in to both clarify and confuse. In Doncer v. Dickerson, 81 S.W.23d 349, (Tex.App.-El Paso 2002) the court states that the purpose of the Family Code requirement that a child have a primary residence is because “one parent must have the ability to determine residency for the purposes of public school enrollment if the parents reside in different districts.” This is straightforward enough and how everyone trial judge I have been in front of understands the code.
Be aware, however, the 3rd Court of Appeals which governs Travis County in an unpublished opinion has stated a different interpretation. In In re Scott COLE, 2014 WL 3893055 the trial court ordered on temporary orders that a child attend a school district outside the district the parent (the father in this case) with the right to determine the primary residence lived. Oddly, neither parent lived in the school district ordered by the trial court. The father appealed stating the Court was divesting him of the right to determine the primary residence on temporary orders which would require a showing that the child’s health safety or welfare was threatening which the Court had not found.
The 3rd Court of appeals in upholding the decision stated “by designating the child’s “primary residence” the person with the right to do so has also identified in which public school the child has the right to enroll. But the court (in Doncer) did not go so far as to hold that the person with the exclusive right to designate the child’s residence also necessarily has the exclusive right to choose the public school the child will attend.”
This is a 2014 decision and I have yet to see another lawyer make the claim that the Cole decision supports. Despite the 3rd Court’s assurance’s this clearly flies in the face of the Doncer decision. Bluntly, the Cole decision is bad law that would sow chaos in the family courts, but it’s out there.
The U.S. Supreme Court has weighed in on the beneficiary designation of an ex-spouse (Sveen v. Melin.) The case addressed a Minnesota Law that states if one spouse has made the other the beneficiary of a life insurance policy or similar asset before a divorce, their divorce automatically revokes that designation so that the insurance proceeds instead go to the contingent beneficiary upon their death. Texas has a very similar law. The plaintiff’s in the case argued that this amounted to the state violated the Contracts Clause which restricts the powers of the states to disrupt contractual relationships. The Court disagreed pointing out that the law was more likely to reflect the policyholders intent since the event of a divorce presupposes the the divorcee does not want a prior partner to receive their life insurance proceeds.
It should be pointed out that the Minnesota law and the current Texas law allow for benefits of a life insurance policy to go to an ex-spouse if the designation is made after the divorce. Regardless, one of the fist things a newly divorced person should do is change their beneficiary designations.
In Texas parents have a right to ask a jury to decide which parent determines the primary residence of the child. There are a host of reasons to select a jury, one of the most obvious being you don’t want the Judge making that decision. Juries however are precluded from making decisions about child support, possession & access, and the assignment of other rights and duties.
A case out of the Houston Court of Appeals, Rogers v. Rogers, 2016 WL 3162299, Court of Appeal of Texas, Houston (1st Dist.), undercuts the power of the jury substantially. In this case, the father prevailed and was appointed the parent with the right to determine the primary residence by the jury. The Judge then ordered that the mother would determine the school the children would attend, so long as it was within the geographic area in which the father could determine the residence, which in this case was Fort Bend County and contiguous counties. The case is silent on the distance between the parents, what school the mother had chosen and what the possession schedule was, but it’s clear the father could, and considering he appealed, probably did walk away from winning a jury trial only to find his children enrolled in school 100 miles away from his home.
There are cases where it’s smart to select a Jury, but you must always take into account that Judges are empowered regardless.
This a pretty stunning case out of the Houston Court of Appeals – 14th District. In re Minix, 2018 Tex.App. LEXIS 1489 (Tex.App..– Houston [14th Dist.].
The parties entered a Mediated Settlement Agreement regarding custody of their three-year-old child. Prior to entry of judgment the father complained that Mother was not following the MSA and asked it be set aside. Mother complained the MSA was no longer in the child’s best interest and asked that the MSA be set aside. There was no docket entry of this agreement or written order. The case continued on with several more hearings and psychological evaluations. At final trial mother testified that she did not believe she had revoked her consent to the MSA and appealed when the trial court would not entered judgment based on the MSA.
The appellate court found that an MSA may only be set aside under limited circumstances, and the agreement of the parties is not one of those limited circumstances. In short, once parties sign an MSA they can’t change it even if they both agree it’s in their child’s best interest.
The problems with this opinion are extensive and obvious. Parent’s in child custody litigation regularly tweak agreements and frankly should be encouraged to be flexible and modify the provisions of their agreements when it makes sense for there child.
It’s not clear what as attorney’s we can do to work around this opinion. Would the Court honor a provision in the MSA that says it’s revocable by agreement? What if the parties sign a new MSA? Is it less enforceable than the first? What if the underlying case is dismissed by agreement ?
The clear take away is be really sure you agree to any Mediated Settlement Agreement you sign.