On behalf of Megan B. Rachel, Attorney At Law posted in Divorce on Wednesday, August 6, 2014.
Texas has seen plenty of fortunes made in the oil business. An oil fortune is at the center of a divorce trial which was scheduled to start Monday in Oklahoma. The husband is James Hamm, the billionaire founder of Continental Resources, which owns a large portion of the Bakken Shale oil fields in the northern United States.
Hamm already owned most of his controlling interest in Continental when the couple married in 1988, which gives him grounds to claim it as his own separate property which need not be divided with his wife. But his stake in the company has grown in value many times since then, and Hamm’s wife argues she is entitled to an equitable share of that increase in value.
A similar property division issue would probably have arisen if this divorce were taking place in Texas. Under Texas’ community property laws, property which each spouse owned prior to the marriage is considered separate property. An increase in the value of separate property will generally remain separate property, but income generated by the property is generally considered community property, which must be divided between the spouses on an equitable basis.
To further complicate the issue, income derived from a spouse’s personal effort is also considered community property. And even if an increase in a business’ value were to be deemed separate property under Texas law, the other spouse might still have a claim for reimbursement, especially if the other spouse can show the owner of the property did not get sufficient compensation for their time and effort.
When wealthy couples divorce in Texas, the property division can be a complex proceeding. Having a family law attorney with a solid understanding of the legal issues can help ensure a spouse gets what they are entitled to.
Source: Reuters, “Billion-dollar debate in Oklahoma divorce: Was oilman just lucky?,” Joshua Schneyer, Aug. 3, 2014