A July 2025 opinion from the Houston Fourteenth Court of Appeals provides more examples of financial activities that can be considered constructive fraud in a divorce.
Liu v. Lin, No. 14-23-00810-CV (Tex. App. – Houston [14th Dist.] 7/15/2025)(mem. op.) upheld the trial court’s findings that the following payments made by the husband without his wife’s knowledge of consent was constructive fraud:
- Payment of college tuition for husband’s sons from a prior marriage ($91,142);
- Payment of living accommodations for husband’s sons from a prior marriage ($112,220);
- Transfers to and allowances paid to husband’s sons from a prior marriage ($55,000);
- Support of husband’s mother ($85,000);
- Transfer’s to husband’s mother ($160,000);
- Transfer to husband’s sister ($5,352).
The court of appeals also held that the wife’s sworn inventory admitted into evidence was some evidence that the wife did not know about the transfers and payments to husband’s family because the transactions were listed in the wife’s inventory under a section entitled, “Waste of Community Funds without knowledge and consent of wife.” The wife had testified through an interpreter as follows:
[Hongfei’s counsel]: Did you ever knew [sic] or gave consent to [Hongfei] in using community money to pay for the accommodations of his adult children while they were in university?
[Min]: I don’t know. I don’t agree either.
The husband’s on appeal complained that the wife did not provide evidence that she did not know about these transactions. The court of appeals ruled that the wife’s inventory was sufficient evidence she did not know about or consent to the transactions. [Practice Tip: List constructive fraud on the inventory and proposed property division under a header “Funds spent/transferred without XXX’s knowledge or consent”].