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Refinancing the loan on separate property

Refinancing the loan on separate property, during the marriage, does not change the property’s character but likely creates a claim for reimbursement.

In re Marriage of Jordan, 264 S.W.3d 850 (Tex. App. – Waco 2008, no pet).

Property of the Corporation

Generally, property of the corporation is owned by the corporation, not the individual shareholder (i.e. spouse) and is not subject to characterization.

  1. Exception: Piercing Corporate Veil. Piercing allows court to characterize assets of corporation as part of the community estate.

    Young v. Young, 168 S.W.3d 276 (Tex. App. – Dallas 2005, no pet).

One theory to pierce is “Alter Ego”, meaning:

  1. there is unity between a separate corporation and a spouse;
  2. such that the two are no longer separate; and
  3. the spouse’s improper use of that corporation has damaged the community estate beyond what might be remedied by reimbursement. Young v. Young, 168 S.W.3d 276 (Tex. App. – Dallas 2005, no pet). See also Castleberry v. Branscum, 721 S.W.2d 270 (Tex. 1986) (holding that shareholders of corporation may be liable for debts of corporation under theory of constructive fraud). Note, Castleberry has been superseded by statute with respect to contract claims.

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