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A BILL TO BE ENTITLED
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AN ACT
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relating to claims for reimbursement between marital estates. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 3.401, Family Code, is amended by adding |
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Subdivisions (1) and (2) to read as follows: |
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(1) "Benefited estate" means a marital estate that |
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receives a benefit from another marital estate. |
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(2) "Conferring estate" means a marital estate that |
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confers a benefit on another marital estate. |
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SECTION 2. Section 3.402, Family Code, is amended to read as |
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follows: |
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Sec. 3.402. CLAIM FOR REIMBURSEMENT; OFFSETS. (a) A claim |
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for reimbursement exists when one or both spouses use property of |
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one marital estate to confer on the property of another marital |
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estate a benefit which, if not repaid, would result in unjust |
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enrichment to the benefited estate [For purposes of this |
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subchapter, a claim for reimbursement includes: |
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[(1) payment by one marital estate of the unsecured |
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liabilities of another marital estate; |
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[(2) inadequate compensation for the time, toil, |
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talent, and effort of a spouse by a business entity under the |
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control and direction of that spouse; |
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[(3) the reduction of the principal amount of a debt |
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secured by a lien on property owned before marriage, to the extent |
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the debt existed at the time of marriage; |
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[(4) the reduction of the principal amount of a debt |
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secured by a lien on property received by a spouse by gift, devise, |
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or descent during a marriage, to the extent the debt existed at the |
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time the property was received; |
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[(5) the reduction of the principal amount of that |
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part of a debt, including a home equity loan: |
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[(A) incurred during a marriage; |
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[(B) secured by a lien on property; and |
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[(C) incurred for the acquisition of, or for |
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capital improvements to, property; |
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[(6) the reduction of the principal amount of that |
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part of a debt: |
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[(A) incurred during a marriage; |
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[(B) secured by a lien on property owned by a |
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spouse; |
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[(C) for which the creditor agreed to look for |
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repayment solely to the separate marital estate of the spouse on |
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whose property the lien attached; and |
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[(D) incurred for the acquisition of, or for |
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capital improvements to, property; |
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[(7) the refinancing of the principal amount described |
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by Subdivisions (3)-(6), to the extent the refinancing reduces that |
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principal amount in a manner described by the applicable |
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subdivision; |
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[(8) capital improvements to property other than by |
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incurring debt; and |
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[(9) the reduction by the community property estate of |
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an unsecured debt incurred by the separate estate of one of the |
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spouses]. |
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(b) A spouse seeking reimbursement to a marital estate must |
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prove: |
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(1) that the spouse or both spouses used property of |
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the marital estate to confer a benefit on the property of another |
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marital estate; |
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(2) the value of the benefit described by Subdivision |
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(1); and |
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(3) that unjust enrichment of the benefited estate |
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will occur if the benefited estate is not required to reimburse the |
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conferring estate. |
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(c) For purposes of this subchapter, the property of a |
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marital estate confers a benefit on another marital estate's |
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property if: |
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(1) one or both spouses used property of the |
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conferring estate to pay a debt, liability, or expense that in |
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equity and good conscience should have been paid from the benefited |
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estate's property; |
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(2) one or both spouses used property of the |
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conferring estate to make improvements on the benefited estate's |
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real property, and the improvements resulted in an enhancement in |
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the value of the benefited estate's real property; or |
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(3) one or both spouses used time, toil, talent, or |
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effort to enhance the value of property of a spouse's separate |
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estate beyond that which was reasonably necessary to manage and |
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preserve the spouse's separate property, and for which the |
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community marital estate did not receive adequate compensation. |
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(d) For purposes of this subchapter, the value of the |
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benefit conferred by the property of one marital estate on the |
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property of another marital estate is determined as of the date of |
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the trial's commencement and: |
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(1) if the benefit resulted from the use of the |
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conferring estate's property to pay a debt, liability, or expense |
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that in equity and good conscience should have been paid from the |
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benefited estate's property, then the value of the benefit |
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conferred is measured by the amount of the debt, liability, or |
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expense paid by the conferring estate; |
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(2) if the benefit resulted from the use of the |
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conferring estate's property to make improvements on the benefited |
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estate's real property, then the value of the benefit conferred is |
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measured by the enhancement in the value of the benefited estate's |
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real property that resulted from the improvements; or |
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(3) if the benefit resulted from the use of time, toil, |
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talent, or effort to enhance the value of property of a spouse's |
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separate estate, then the value of the benefit conferred is |
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measured by the value of the time, toil, talent, or effort beyond |
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that which was reasonably necessary to manage and preserve the |
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spouse's separate property. |
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(e) The determination of whether unjust enrichment will |
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occur if one marital estate is not required to reimburse another |
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marital estate is a question for the court to decide. |
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(f) The court shall resolve a claim for reimbursement by |
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using equitable principles, including the principle that claims for |
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reimbursement may be offset against each other if the court |
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determines it to be appropriate. |
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(g) A claim for reimbursement of a marital estate by one |
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spouse may be offset by the value of any related benefit that the |
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other spouse proves that the conferring estate received from the |
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benefited estate, including: |
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(1) the value of the use and enjoyment of the property |
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by the conferring estate, except that the separate marital estate |
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of a spouse may not claim an offset for use and enjoyment of a |
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primary or secondary residence owned wholly or partly by the |
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separate marital estate against contributions made by the community |
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marital estate to the separate marital estate; |
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(2) income received by the conferring estate from the |
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property of the benefited estate; or |
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(3) any reduction in the amount of any income tax |
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obligation of the conferring estate by virtue of the conferring |
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estate claiming tax-deductible items relating to the property of |
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the benefited estate, such as depreciation, interest, taxes, |
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maintenance, or other deductible payments. |
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(h) [(c) Benefits for the use and enjoyment of property may |
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be offset against a claim for reimbursement for expenditures to |
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benefit a marital estate, except that the separate estate of a |
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spouse may not claim an offset for use and enjoyment of a primary or |
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secondary residence owned wholly or partly by the separate estate |
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against contributions made by the community estate to the separate |
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estate. |
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[(d) Reimbursement for funds expended by a marital estate |
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for improvements to another marital estate shall be measured by the |
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enhancement in value to the benefited marital estate. |
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[(e)] The party seeking an offset to a claim for |
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reimbursement has the burden of proof with respect to the offset. |
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SECTION 3. Section 3.404(b), Family Code, is amended to |
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read as follows: |
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(b) A claim for reimbursement under this subchapter does not |
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create an ownership interest in property, but does create a claim |
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against the property of the benefited estate by the conferring |
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[contributing] estate. The claim matures on dissolution of the |
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marriage or the death of either spouse. |
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SECTION 4. Section 3.406, Family Code, is amended to read as |
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follows: |
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Sec. 3.406. EQUITABLE LIEN. (a) On dissolution of a |
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marriage, the court may impose an equitable lien on the property of |
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a benefited [marital] estate to secure a claim for reimbursement |
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against that property by a conferring [contributing marital] |
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estate. |
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(b) On the death of a spouse, a court may, on application for |
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a claim for reimbursement brought by the surviving spouse, the |
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personal representative of the estate of the deceased spouse, or |
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any other person interested in the estate, as defined by Chapter 22, |
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Estates Code, impose an equitable lien on the property of a |
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benefited [marital] estate to secure a claim for reimbursement |
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against that property by a conferring [contributing marital] |
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estate. |
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SECTION 5. Subchapter E, Chapter 3, Family Code, is amended |
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by adding Section 3.411 to read as follows: |
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Sec. 3.411. CUMULATIVE REMEDIES. The remedies provided by |
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this subchapter are not exclusive and are in addition to any other |
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remedy provided by law. |
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SECTION 6. The change in law made by this Act applies to a |
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claim for reimbursement that is pending in a trial court on the |
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effective date of this Act or that is filed on or after that date. |
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SECTION 7. This Act takes effect September 1, 2023. |