TRACING ASSETS: SEPARATING MARITAL
FROMNONMARITAL PROPERTY

excerpts from Divorce Lawyers by Emily Couric
copyright @ 1993 by St. Martin's Press,
http://www.stmartins.com

Irene Frances Nations v. Danny Jack Nations
Divorce is worse than death. Death is part of the cycle of life; we expect it. But with divorce, you have guilt, blame, and second guessing, and the other person is still around to create all kinds of trouble.

--ATTORNEY LOUISE RAGGIO

DALLAS

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[Page 165] With the advent of no-fault divorce nationwide, couples no longer have to place blame for marital failure, publicly proclaiming tales of infidelity, mental cruelty, or desertion. A more practical topic now dominates divorce proceedings -- the division of marital wealth. Yet the battle here can be just as painful, demoralizing, and debilitating as public faultfinding, and in most cases the more money a couple has, the more they fight over how to divide it.

Marital property consists of material possessions of dollars that the couple, together or as individuals, acquired after they were married. Separate property, by contrast, is that which is brought into the marriage by each spouse and kept distinct from all marital property. Any inheritance after marriage also belongs to the individual who receives the bequest, making it separate property, too.

Community property states divide marital assets in half in a divorce whereas equitable distribution states try to divide them fairly, basing their determination of what is equitable on a variety of factors, including the length of the marriage, the spouses' economic and noneconomic contributions to the marriage, individual need, and potential earning power. There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. All of the rest are equitable distribution states.

But before a couple or the courts can consider any distribution of assets in a particular divorce case, they first must identify the marital property involved. Then a court also must determine the value of that marital property in order to distribute it between the two spouses. The disputes that follow, fights over who wants what and how much it's worth, stymie many couples early in the divorce process. In some cases spouses even try to hide assets from one another.

Rene Nations had to battle her husband Danny just to get back her separate, individual property. When she finally summoned the courage to leave their seven-year marriage, Danny argued that all of their holdings belonged to them jointly, including Rene's substantial inheritance from her parents and grandparents. The Nations had placed all of their stocks and properties, including those from Rene's inheritance, in both names, so Danny said that under the community property rules of Texas, where they lived, he was entitled to half of everything. Rene countered that Danny had wrongfully convinced her to open a joint brokerage account with her inheritance so that he could quit his job as a management consultant and spend his time investing her money. Though he did make a profit with some of the investments, Rene's net worth was less at the time of the divorce than it would have been had Danny left her inheritance alone, simply letting the investments grow.

In contrast to Danny, Rene claimed that the bulk of the couple's assets were hers alone, since their joint holdings stemmed largely from her inheritance. Separating nonmarital from marital property in cases like this is complicated when joint and separate accounts and investments have been intermingled over time.

The story told here shows how a team of lawyers and their determined client, Irene Frances Nations, were able to work through a maze of financial records. Her lawyers' mission was to identify her original inheritance monies as the source of the Nations' wealth and to assert a claim for the assets Rene felt were rightfully hers. The technique they used is called "tracing."

One day in March 1988, when Rene Nations realized that her husband Danny would be leaving shortly to get a haircut, she made a telephone call that changed her life. Seconds after he pulled out of the driveway she rang the Dallas Law Offices of Raggio & Raggio and made an appointment for the following week at lunchtime. Then she started to plan her cover.

She called a college classmate with whom she recently had renewed a friendship, one of the few friends she thought she had left after years of devoting her time and attention only to Danny. "Will you say you're having lunch with me -- even though I'm not going to have lunch with you?" Rene asked her friend. She explained her plan for visiting a divorce lawyer. The friend, recognizing how possessive Danny was of Rene, that he knew her every move, agreed to help. When the day came on March 29, 1988, Rene arrived for the appointment on schedule.

During an initial visit, attorneys usually talk with new clients to make sure they really want to take the drastic step of divorce, but after forty-year-old Rene, a slender, neatly groomed woman, sat down in the Raggios' offices, she quickly let them know that she had no doubts about what she was doing. Though she had been uncertain and equivocal about the marriage throughout her seven years with Danny, finally -- at last -- she was filled with conviction. That very day she signed a retainer agreement and paid the lawyers five thousand dollars.

Doing so required tremendous courage, years of talking herself into a step that eventually would save her from a lifetime of misery. When the appointment was over Rene gathered her courage again, this time for the final trip home to her forty-eight-year-old husband. In the meantime, the mother-and-son lawyer team of Louise and Thomas Raggio prepared to file for her divorce.

By the next day, the papers were complete. The case was in motion. Rene's journey toward freedom had begun.

[Page 172] Rene knew about sixty-eight-year-old Louise Raggio from an earlier incident during her marriage to Danny. About a year before, Danny had asked Rene to demand more child support from Michael's father. "I don't know why. We already have more money than we need. We have more money than he has," she told him. Nonetheless, she did try to comply with Danny's wishes, and the real estate lawyer who had been working for them recommended the Raggios. After an initial meeting, and after the Raggios had telephoned an attorney representing Michael's father, they advised Rene that seeking an increase from her first husband would be difficult. He had fewer financial resources than she had, and a court order for an increase in support would be highly unlikely. Rene dropped her request, but she kept the Raggios in mind.

Lawyers all over Texas recommend Louise Raggio to help with domestic problems. A legend in her time, she is known to be the best female lawyer in Dallas and is in the top tier of Texas family law practitioners. Raggio was the first female assistant district attorney in Dallas, the first female prosecutor in a Dallas County criminal court, the first woman to serve as a director of the State Bar of Texas, and the first woman trustee of the Texas Bar Foundation. "I have been the token female for thirty-five years," she says, "but I'm not really token. Having me around is more like having a pet rattlesnake." She is very proud of all the trouble she has made on behalf of women, and of the changes she has wrought in Texas.

In truth, Raggio has gotten far more with honey than with venom. Whatever her struggle, she has approached each task with a smile, seeking to keep good long-term relations with her colleagues in the law profession. Perhaps the greatest accomplishment in her career was spearheading a much-needed revision of the state's marital property laws. When she first entered practice, Texas was still the wild West, where cowboys (both real and urban) owned cattle, real estate -- and their women. Before 1965 a married woman in Texas could not borrow money without her husband's signature; she could not sell her own property without his permission; and if she had property before marrying, her husband controlled all income from that property after the wedding. Raggio, whose diminutive frame belies her confidence and savvy, helped change all of these property rules and more, eventually revising the state's marriage and divorce laws, too. By 1979 she had rewritten the entire Texas family law code and convinced the legislature to bring the Lone Star State into the modern age.

When Rene kept her appointment to begin a divorce proceeding that fateful day in March 1988, she met with Louise Raggio and her son Tom and explained to them her plight.

Rene described how her life changed soon after she and Danny married.

"I married this person who realized I had the money that I didn't realized I had. Then his life-style just took off." She filled the Raggios in on all of the details.

Danny was the boss, especially in their financial affairs. Actually, she told the Raggios, when it came to managing their investments, she did as much as Danny, but he claimed all of the credit. "He would say, 'All you want to do is sit at home in the office,' but he never would do the paperwork," Rene explained. "If we ran out of money, he'd say, 'Find it.' It was like he wanted people to think he had a job, but that was just his cover -- that he was an investor."

Rene also told her lawyers that Danny had made her change her will. The one she had written while she was single bequeathed all of her possessions to her son, but in her new will she left half of everything to Danny. "I didn't really want to do that," she explained, "but it's hard for me to tell you how afraid I was to speak up against him. So in 1986 I got really depressed."

"What did you do?" Louise Raggio asked her.

"Danny kept saying it was my problem, it was my fault, so I went to a psychologist. Even though I knew there was more to it than that, I was willing to try anything. I was always upset; my stomach hurt and I was getting worried about my health. So I went."

"Did it help?" asked Tom Raggio.

"I only went for two or three sessions, because Danny wasn't at all supportive. He didn't want me to go back. Finally, in the summer of '87 I got him to go with me to a different psychologist."

Both Raggios looked at her, waiting.

Rene continued: "He went to maybe two sessions, and the psychologist asked me, 'Well, can you ever just get up in the morning and have a cup of coffee in your bathrobe and just hang around the house?' and I'd say no. Then she asked 'Can you ever just go shopping for the day and be back later?' and I'd say no. Well, Danny was hearing this and he said, 'I'm not going back if you two are just going to knock me.'"

By then, Rene told her lawyers, she finally had begun to understand, with the psychologist's help, that she was not the one with the problem. She had rights that she could stand up for. It was the turning point. "I decided there's got to be more to life than this," she explained, as if all of a sudden a bell had gone off. The winter in Colorado had set off even more bells.

Louise Raggio listened carefully to Rene's predicament. Although Raggio often tries to underplay a client's chance of success -- the vagaries of the court system generally keep her optimism in check -- she was supportive and encouraging with Rene. Here was a client who would need all the emotional buttressing the lawyers could provide.

[Page 175] Once it became clear that Rene would not change her mind to pursue a divorce,

Danny entered the legal arena ready to draw blood. His entire strategy would be based on claiming that everything he and Rene owned at the time of her petition was theirs as a couple, to be divided equally between them, as proscribed by Texas's community property law. Rene had agreed to share the money, Danny would say, and as her investment manager, he had earned his half.

Rene faced a long road ahead trying to prove that the source of their current assets was her inheritance. She and Danny had combined her inheritance and the profits from their investments in a variety of subsequent investments and purchases. The court battle would require that she search her memory and her records for supporting documentation and dive headlong into the world of high finance. She gulped at the thought, having no investment background and no role models; her parents, after all, had cared as little about business and investing as she did. "I'm just a little elementary schoolteacher," she told the Raggios plaintively.

To help her straighten out the financial record for the case, the Raggios turned to the technique of "tracing," which follows monies backward in time from year to prior year, from account to account, until the exact origin becomes clear. They were experienced in the technique, relying on another of Louise's sons, Kenneth, the family computer whiz, who uses a special software program for organizing and cataloging clients' financial data. For Rene, Ken and his computer would be a critical resource.

"If you have a granary with wheat in it," Louise Raggio explained to Rene, "and the granary is community property -- you and your husband own it together -- and then you pour a bushel of your own, separate property wheat into it, you can never get it back. The two kinds of wheat are hopelessly commingled."

The moral to Raggio's story? Keep separate property distinct from marital property if you ever again want to guarantee independent ownership. A spouse still may be able to claim that an asset constitutes separate property if the asset's own character has been preserved and can be identified independently. But once that property becomes hopelessly mixed in, or commingled, as in the wheat example, original ownership no longer can be proven. For example, pieces of jewelry, furniture, and other material possessions obviously maintain their distinct, separate identity, as can independent investments, so long as they are not combined with financial assets earned after the marriage. But a spouse who contributes separate savings toward the purchase of a house, for example, would have a difficult time claiming a portion of that house as belonging independently to him or to her. The same would be true if a spouse sells his or her own piece of property to purchase a new asset in the names of both partners.

Fortunately, with the tracing technique, all may not be lost, even if some commingling has occurred. That is, if a lawyer and client can trace a current asset back to its original source, the current asset still may be claimed as individual, separate property. The tracing must be complete, however, without any steps missing along the way. For example, a couple may have bought during their marriage a piece of land now worth $1 million. But if one of the spouses can show that the land was purchased with the proceeds from the sale of stock, and the stock was purchased with funds from a separately kept bank account, and bank account was opened with the money received in the sale of a different piece of individually owned land, and that piece of land was owned by one of the spouses before the marriage, then that spouse can claim the million-dollar piece of land at the end of the transaction chain.

"You must be able to document all of this," warns Louise Raggio when explaining the details of the tracing technique to her clients. "If you have one link gone in the chain (one missing piece of written proof), you don't have a chain anymore. You only have two pieces."

Courts in different states look at tracing in different ways, and their standards vary for the following assets back to separate property. Generally, however, they begin by labeling all property acquired by either spouse during a marriage as marital property, unless one of the spouses can prove otherwise. That is, the burden of proof is on the spouse who wants to claim certain assets as his or hers alone rather than as assets to be shared.

This can be done by proving that the property was acquired as a gift or as a bequest in a will, in exchange for property owned before the marriage, or in exchange for property received as a gift or bequest. The last two claims require the use of tracing to prove ownership.

The degree to which the trace must be convincing to a court varies among states. Some require "clear and convincing evidence," while others require only "a showing" of evidence. That is, some states require that the evidence be more specific than do other states, pointing to exact pieces of property as a trace proceeds backward in time.

To guarantee that Rene got back what she had brought into her marriage -- and what she had received during the marriage through her inheritance -- the Raggios had to meet a high standard. Under Texas law they would have to provide clear and convincing evidence of Rene's claims. The Texas courts had firmly stated in an earlier case that a spouse must produce "factually sufficient evidence" that property was separate rather than marital. Louise, Tom, and Ken Raggio would use their combined skills in ferreting out Danny's investment maneuverings, scrutinizing his and Rene's records, and re-creating a paper trail revealing the movement of millions of dollars.

"I want to introduce you to my son Ken," said Louise Raggio after telling Rene about the use of tracing. "He is the businessperson in our firm -- he works with computers and he's going to help you get all this financial information organized."

Ken and his brother Tom are partners in Louise's nine-lawyer firm. So is a third son, Grier, Jr., who practices primarily in New York. The youngest of the three Raggio children, Ken had been born when his mother was in law school and as a baby had ridden in her bicycle basket when she peddled to the law library to study. It seemed particularly appropriate that he should ultimately join her and the rest of his family in their law firm. Ken, who would later follow in his mother's footsteps as chairman of the ABA's Family Law Section, fondly calls her "Wheezer" when they are alone. But in front of clients he uses "Louise" to downplay the close family tie. (The more traditional Tom always refers to her as "Mother.") Whatever name they're using, it is clear that Louise, Ken, and Tom hold one another in the highest regard. After chatting for a few minutes with Rene, Ken suggested a meeting to start work on his new task.

He would work most closely, however, with Rene's new accountant, Ken Travis, who had been recommended by her earlier accountant when he moved to Houston. Travis helped Ken Raggio identify the necessary financial data for the computer program that would set up Rene's case and trace the Nations' money back through the years of their marriage.

Ken Raggio describes the program, which he calls an "outliner" or "information manager," as "the tool of choice for organizing -- and thinking about -- projects or tasks." Says Ken, "An outliner is to ideas and information what a word processor is to documents. It allows you to organize your thoughts, to focus attention on a particular 'level' of the project at hand, and to quickly move to another area."

Looking at his computer screen Ken Raggio could see on his outliner all of the work required for the Nations' case:

Nations v. Nations

+To Do
+Legal Issues
+Fact Issues
+Research/Briefs/Cases
+Pleadings
+Discovery & Production
+Expert Witnesses
+Depositions
+Property
+Trace
+Proposed Division

Under the heading "Trace" Raggio would accumulate in his computer a listing of all of the assets in Rene's case, beginning with her inheritance. He could scan his screen for a broad overview and then quickly switch to other screens showing more detail about each asset described at different levels of the initial outline. The first screen of the trace looked like this:

Trace
+ Inherited Property
+Times Mirror Stock
+ Times Mirror Stock (Sale and Diversification)
+ A.G. Edwards Account
+ American Bank in Sherman, Texas
+ American Bank in Denison, Texas
+ Merrill Lynch Account
+ Sun Energy Stock
+ Municipal Bonds
+ Single Premium Insurance Policy
+ Mutual Fund Investment

Under each of these categories with a "+", Raggio  inserted pages of data, piecing together chronologically dates of subsequent investments, purchases, and sales, with exact dollar amounts. By the end of the process they had worked up to the Nations' current assets, re-creating a paper trail that revealed the intricacies of Rene's financial past. If the lawyer and accountant reviewed the data in reverse, they could trace ownership of the Nations' so-called marital assets back to Rene's inheritance.

Even more important were the supporting spreadsheets and flowcharts listing dates and descriptions of every financial transaction made during the Nations' marriage. The flowcharts were key for the trial. "We can blow up the flowcharts for the judge so he can just look at them at any time and know exactly where we're at and where we're going," Ken Raggio explained to the accountant as he prepared the tracing presentation for court. "At any point along the way we can say, 'We're right here.' It makes a very complicated thing simple."

Page 180 shows what one simple flowchart looked alike, with dollar amounts deleted. Each marking E1- E8 refers to a spreadsheet that shows individual transactions that took place in each account and distinguishes between original investments and interest earned.

[flowchart is here]

Throughout their planning for the trial, Louise, Tom, and Ken talked regularly to discuss strategy. Early on they identified several legal problems. First, if a spouse puts money into a joint account, the courts presume that it was intended as a gift. Danny would argue strongly in support of this conclusion. Rene would counter that she had thought that he wanted the account in both names only to make it easier for him to help her manage her money.

Second, if nonmarital assets are commingled with marital assets before being spent to acquire new property, that new property is by definition considered to be marital. Specifically, dividends and interest income received during a marriage, even if they derive from separately owned property, may be considered marital property. That is, the money earned belongs to both spouses. By allowing this earned money to be commingled or accumulated with the original individual investment, the entire fund takes on the mantle of marital property. In his spreadsheets Ken Raggio had to distinguish interest income from investments purchased with Rene's inheritance money.

Third, Rene and Danny had diversified her inheritance savings, often investing both the original, separate funds jointly with marital funds in a new purchase or investment. Fourth, when Danny and Rene placed money down on a n investment, such as real estate, and then financed the remaining amount, they cosigned the promissory notes. Because they had taken on the debt jointly, relying on "community credit," as it is called, the profit on the investment was considered community property. Danny claimed that those profits were considerable.

But perhaps the overriding challenge of the case was the burden the court placed on Rene to prove that any of the funds and property were in fact her own. She would have to trace both hard assets and monetary accounts back to her separate inheritance.

[Page 186] That time came almost two months later, on July 26, 1988. The Raggios had made Rene's financial records -- seven boxes in all -- available to Danny and his lawyer for a two-week period earlier that month. This time both Tom and Ken Raggio were present at the continuation of the deposition; they had conferred carefully with their mother in advance.

Danny agreed immediately that the stocks and cash the Raggios and Rene's accountant had listed in one of their exhibits had in fact come to Rene through her inheritance, with the one exception of about three hundred shares of Times Mirror stock, which Danny said he could not identify. Thus, they all concurred that the original source of the Nations' wealth was Rene's stocks and family holdings, which had been hers at the time of the marriage.

Then Tom Raggio again asked Danny more about his job when he married Rene and about his own financial circumstances at the time.

"What was your salary?" he inquired.

"Ending salary with benefits and profit sharing was approximately $40,000 a year," said Danny.

"Mr. Nations, did you own any real estate at the time of your marriage to Rene?" asked Raggio.

"No."

"Did you have any stocks or bonds?"

"No."

"What assets did you bring into the marriage?" asked Raggio.

"Other than some cash, I don't remember," replied Danny. Then he admitted what Tom Raggio already knew: "Nothing else," he said.

"Is it safe to say then it would have been personal property, I think you had a station wagon, an older station wagon?" Raggio kept probing.

"Yes," said Danny.

"And personal property. And then what amount of cash -- are we talking about a couple thousand dollars or are we talking--"

"Yes," Danny interrupted.

"A couple thousand dollars," Raggio reiterated slowly. "And what debts did you bring in?"

"None that I can remember."

"Would it be a fair statement then that you had personal property, bank accounts, assets of approximately $10,000?"

"Yes," Danny agreed.

It was a piddling amount compared to the $1.5 million Rene had brought into their union. But Danny made it clear that Rene had considered him an equal partner in handling her money.

"Mr. Nations, is it your position that your wife intended to make a gift of the monies that were put into a joint account?"

"Yes," said Danny.

"Mr. Nations," continued Raggio, "did you ever tell Rene that you didn't want her to keep her property separate?"

"I had told Rene that If I were going to give up my job -- I had responsibility to my children, my children's future and to my own future and that if I was going to help her run our family business, that it had to be a joint effort and it had to be a joint responsibility and a joint ownership, and that's the gist of our conversation," said Danny. "I can't quote to you exactly eight years ago how that conversation went, but that's the essence of it."

"So in fact," Raggio queried, "you told Rene that the ownership of these assets had to be joint?"

"I didn't tell Rene anything. We discussed this jointly."

"And Mr. Nations, is this still, is this your position today, that all of the assets are in fact joint, jointly owned by you and Mrs. Nations?"

"Yes," said Danny firmly. But he would produce no witness or documents to prove that that was what Rene truly had wanted.

[Page 190] On August 3, Tom Raggio filed an amended petition for divorce to allege Danny's breach of fiduciary responsibility, or violation of trust, in handling Rene's funds. This second pleading was far more detailed, a necessary precursor to presenting evidence in court supporting the new allegation. Even in the legalese in which it was written the words were scathing: "Respondent (Danny) acted with conscious disregard or an evil intent to harm Petitioner (Rene)," Raggio wrote. Danny had, Raggio alleged, "wrongfully converted," Rene's separate property to joint ownership. "Respondent's conversion of the property was intentional, willful, wanton, and without justification or excuse and done with gross indifference to the rights of Petitioner," Raggio continued. The longer he worked on Rene's case, the more angry he became.

As the trial drew closer, Anderson decided to hire another lawyer to help him out. After learning through discovery the extent of the Raggio preparation for Rene's case and getting a handle on their tracing activities, Danny's lawyer began to fear that he would need to bring a bigger hired gun to court. Regan Martin boasted a reputation as a scorch-the-earth litigator, a man quick on the uptake and ruthless during cross-examination. Anderson and Martin would appear together on Danny's behalf.

Rene had been considering settlement through the summer, but by the time fall came, she did not want to hear of it anymore. She was so mad thinking that Danny was going to get any money from her, when he had come into the marriage with only about ten thousand dollars, and considering what she had had to put up with emotionally.

"We might be able to settle still," Tom Raggio said to her one day, hoping to keep the possibility open. Like many of the best divorce lawyers, the Raggios believe that an acceptable settlement is far preferable to trying a case. A good settlement is a sure thing; a courtroom trial is rife with chance.

But Rene was fighting mad and would not hear of it. "I'm ready to go to court," she told Tom defiantly. "I want my story to be told."

The trial began on September 29, 1988, less than a year after that fateful day when Rene had first told the Raggios that she wanted a divorce. The case had progressed rapidly because Rene -- who suddenly had become assertive once she took the initial action of seeking a divorce -- had pushed her lawyers to end the entire proceeding quickly. "I've got to get moving with this," she had told them time and time again. And the Raggios had responded; they were so efficient about filing the various papers and completing discovery, Rene would say later, that her time in court came quickly enough.

Going into the trial, Danny had softened his fifty-fifty proposal and replaced it with one that would give him 40 percent of all of the assets he and Rene owned. Under Danny's calculations and proposed division, his total would be worth $1,022,412, and Rene's $1,547,470. Rene refused even to consider it. She took the stand first. Accountant Lynn Warren and stockbroker Ken Bingham followed her after lunch, and then Rene went back on the stand for the rest of the day. Regan Martin was even harder on Rene with his questioning than Anderson had been during her deposition two months earlier. Again Rene tried desperately to remain calm and controlled.

Surprisingly, the very next morning, before the trial could reconvene, Danny and his lawyers offered to settle the case. But Rene still was not interested, even though the Raggios were trying to talk her into it. She wanted Danny to have to take the stand as well; she wanted her lawyers to give him the third degree, too.

"What's the deal?" Rene asked her attorneys; she was crying as they paced together up and down the hall and talked over the offer. "You're switching over on me," she pleaded. She was so geared up that she could not stop the fight, even when the time had come to do so. Rene did not want to admit that she would have to give up anything to Danny to get the case over.

"Your attorney fees are only going to go up if we continue," Tom Raggio told her gently but directly, "and we guarantee you that the judge will give Danny something anyway. So if you can settle in a way that's comfortable for you, you'll be better off in the long run." Tom felt that Danny's offer was favorable to Rene. "We've bludgeoned him into your position," Tom informed her.

Louise Raggio especially wanted Rene to settle. She was very concerned as to whether Rene could withstand more days of Martin's blistering cross-examination. He's just here to put fear and trembling in Rene's heart, to make her crumble, Louise Raggio worried. She feared that the cost of pushing harder for a bigger victory could outweigh the benefit. It was a timely and shrewd analysis, one that all lawyers owe their clients at every turn in the litigation process.

So with her lawyers' urging, Rene finally agreed to settle with Danny. The Raggios drafted and made final the divorce decree itself, as well as all of the closing documents, within a four-day period, a remarkable feat given that the process frequently takes thirty to forty-five days. They worked rapidly because they felt the deal they had made for Rene was a good one and they did not want to give Danny time to change his mind. The divorce decree became effective as a court order on October 3, 1988, only months after Rene had first contacted the Raggios about a divorce and mere days after she and Danny had agreed on a settlement.

The decree gave Rene the vast bulk of the furnishings, furniture, jewelry, and personal effects in their homes, their Dallas house, two investment lots in Grayson County, Texas, their 1986 560 SEL Mercedes, all stocks and bonds held in either her name or Danny's name or both, the yacht, the Chris Craft, their A. G. Edwards account, a bank account, and "any and all other property, whether real or personal or mixed and whether tangible or intangible, in the possession of or registered in the name of Petitioner (Rene) or Respondent (Danny), or either of them, or both of them, unless express provision is made herin to the contrary." Rene's share of the settlement, says Tom Raggio, totaled about $1.8 million.

Danny's share was worth about $500,000 less than half of what he had wanted and approximately $100,000 less than the Raggios' proposed settlement offered two days earlier. He would get the country club membership, the Ranger bass boat, about $130,000 in cash, the 1987 BMW and the 1987 Nissan, the Colorado condominium, his Harley Davidson and trailer, some oil interests property, one of their bank accounts, and all of the personal property already in his possession at his rented apartment.

Both Rene and Danny would have to pay their own mortgages and other property-related expenses and attorneys fees. Most important, perhaps, Danny was to remove his name from all of Rene's stocks and investment accounts.

"They realized that with the tracing we were too well prepared," observes Louise Raggio today. For Louise, every legal victory is a glowing personal victory, and with each -- including the case of Rene Nations -- she seems as thrilled as if she has just completed her first day in court

[Page 193] Today Rene, who has reverted back to her maiden name, Rene Wright, is philosophical about her past mistakes and naivete. Most important, she finally has begun to like herself. "I realize I have more self-worth," she says, reflecting back on her days as Rene Nations.

Surprisingly, she also has a sense of humor about her past. "If I ever get married again," she told Merrill Lynch broker Ken Bingham one day after her divorce, "you grab me by my collar and get my attention more than you did in 1981!" She wishes that those who had warned her had been much stronger in talking about the possible consequences of her actions. Now, of course, Rene knows enough to invoke such warnings on her own.

She lives conservatively once again, tutoring part time, volunteering at a local elementary school, and overseeing her own investments. Now on her own, she maintains a strict budget. "People tease me when I say I can't afford something," she says. But if a purchase is not within the budget she has set, Rene refuses to make it.

Louise Raggio advises her about estate planning, and she introduced Rene to the Dallas Women's Foundation, which together with Southern Methodist University offers a series of detailed personal investment seminars for women. After taking that series Rene enrolled in other investment courses and some women's investment programs. Most recently she joined a new organization of women called Managing Inheritance, whose goals are to offer emotional, technical, and social support to women who have inherited wealth and to educate women about philanthropic concerns. Above all this group says it wants "to empower women to take responsibility for their finances."

Rene Wright provides them and others with an example of a woman who learned her lesson the hard way. Today she says she realizes that Danny "never really managed" her inheritance as she knows it should have been managed. "He would never really talk with the brokers to work out a financial plan," she observes. "And he never sat down and discussed asset allocation." He spent her money, rather, on a piecemeal or shotgun basis, without any careful, well-articulated, long-range considerations for the future.

With her newfound knowledge about financial management, Rene finally is following in the footsteps of her Grandfather Greenwell, like herself, a simple person with solid common sense but one who always understood money. After all, he had risen from his first newspaper job in the Times Herald's classified department to his last job, where he directed the newspaper's entire accounting system, from bookkeeping to payroll. He would be proud of his granddaughter today.

Rene's son Michael stayed on at his father's house during the divorce, at Rene's request. His father had remarried and Rene was glad that her son could have a stable home during her own period of personal upheaval. But in 1990 Michael, then a high school student, moved back in with his mother to the smaller house she had purchased after the sale of her last marital home. When Rene asked Michael how he felt about her divorcing Danny, he simply replied, "Mom, I'm OK, I'm just fine," and she accepted his reassurance.

As for Danny, despite Rene's years of unhappiness with him and the trauma of her divorce, she only speaks matter-of-factly about their marriage. Even as she explains Danny's behavior and handling of her money, she portrays no emotional rancor. Although she never sees him now and has no knowledge of his life-style or work, Rene says that Danny started changing the day they divorced. The angry, hostile husband Rene had known disappeared, leaving a more gentle person behind. About ten months after settling the divorce case, Danny married again, for the fourth time, and then moved to a new home in Dallas. He also apologized to Rene.

Copyright @ 1993 St. Martin's Press, New York

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