A common dispute in a divorce is the appropriateness of gifts a spouse has made to third parties during the marriage. This ranges from gifts to children, parents, and paramours. Gifts fall under constructive fraud which is discussed in the prior post, but there are some additional factors.
The courts have stated that as it pertains to gifts the factors that the court can consider in determining whether or not a spouse’s actions constitute constructive fraud are:
1. the relationship between the spouse and the recipient;
2. the size of the gift or transfer in relation to the total size of the community estate;
3. the adequacy of the estate remaining to support the other spouse in spite of the gift or the transfer; and
4. any special justifying factors for the gift or transfer.
Massey v. Massey, 807 S.W.2d 391, 402 (Tex. App. – Houston [1st Dist.] 1991), writ denied, 867 S.W.2d 766 (Tex. 1993) (per curiam). When looking at gifts specifically focused on educational funds, the courts have stated that was constructive fraud, but only when the complaining spouse was not fully informed of the gifts or disposition was unfair to the spouse. In re McCurdy’s Marriage, 489 S.W.2d 712 (Tex. Civ. App. ¬—Amarillo 1973, no writ) & Grant v. Grant, No. 01-98-00352-CV, (Tex. App. —Houston [1st Dist], Nov. 24, 1999, no writ) (memo. op.). When looking at fairness to the complaining spouse, prior court’s have found that 13% gift to community estate ratio to be appropriate. Horlock v. Horlock 533 S.W.2d 52 ([14Dist.] 1975).
In short contesting gifts made during a marriage is a fact intensive argument, but one a trial court may definitely consider.