2. Code I: Community Property

Question 1

Matrimonial Regime

Answer 1

system of principles and rules governing the property of married persons, as between themselves and third parties

• legal (default in LA)
• contractual
• partly legal/ partly contractual

Question 2

Default Matrimonial Regime

Answer 2

legal regime

aka community of acquets and gains

presumption of community property

Question 3

Matrimonial Agreements: Form

Answer 3

• made by authentic act OR
• act under private signature duly acknowledged by both spouses

(An authentic act is executed in the presence of a notary and two witnesses, and a private act is executed by the parties without a notary present and later acknowledged by a notary or before a court.)

Question 4

Matrimonial Agreements: Timing

Answer 4

• prenuptial = meet form requirements
• postnuptial = meet form requirements and obtain approval by court

Question 5

Matrimonial Agreements: Substance

Answer 5

Spouses have freedom to contract as to all matters not prohibited by public policy.

CANNOT:
(1) modifying or altering the marital portion;
(2) renouncing or altering the established order of succession;
(3) limiting, with respect to third persons, the right one spouse has alone to obligate or alienate, encumber, or lease community property;
(4) waive interim spousal support (note that final spousal support may be waived)

Question 6

Marital Portion

Answer 6

[Rich Spouse Dies]

if no children –> 1/4
1-3 children –> 1/4 in usufruct
4+ children –> child’s share in usufruct

cap: $1M

Question 7

General Principals of Community Property Regime

Answer 7

Louisiana’s community property regime applies to spouses domiciled in Louisiana and have not contracted out of the community property regime.

• mass of assets of liabilities where each spouse has an undivided 1⁄2 interest in all of the community property (distinct from the interest of a co-owner)

Question 8

Limitations on Alienation of Property in Community Property

Answer 8

spouses, unlike co-owners, cannot alienate their undivided interest during the community

CAN alienate community assets where the other spouse has an interest, under the equal management scheme

Question 9

Separate Property

Answer 9

(1) property acquired in advance of the community property regime

(2) property acquired with separate property or with a mixture of separate and community property where the community prop is inconsequential in comparison with the separate property used

(3) inheritance or donation from a third party to a spouse individually

(4) damages one spouse is awarded against the other for breach of contract or a claim for fraud or bad faith management of community property

(5) damages a spouse is awarded in connection with his separate property; AND

(6) things a spouse is awarded in voluntary partition

Question 10

Community Property

Answer 10

everything not separate is community

(1) property acquired during the existence of the community property regime through the effort, skill, or industry of a spouse

(2) property acquired with community property or with a mixture of separate and community property where the community property is consequential in comparison with the separate property used

(3) property donated to spouses jointly

(4) natural and civil fruits of community property AND

(5) damages awarded for loss of community property

Question 11

Presumption of Community Property

Answer 11

All property in the possession of either spouse during marriage is presumed to be community property.

rebuttable by other spouse by preponderance of the evidence

Question 12

Real Subrogation

Answer 12

a CONVERSION principle under which a new thing is classified in the same manner as the old thing from which it was converted

Question 13

Estoppel Based on Double Declaration in an Act of Acquisition

Answer 13

When a spouse makes, in an act of acquisition, a declaration that:
(1) the funds are separate AND
(2) were acquired by the spouse as separate property

= the other spouse who concurs in that act is estopped from later claiming that the property is community property, even if the substance of the declaration is a lie

Question 14

Classification of Prop: Inter Vivos / Mortis Causa Donations from 3P

Answer 14

• to spouse individually = separate
• to spouses jointly = community

donor’s intent controls

Question 15

Classification of Prop: Inheritance

Answer 15

always separate property of inheriting spouse

Question 16

Contemporaneous Mixing of Separate and Community Property to Acquire a New Asset

Answer 16

When spouses mix separate and community property to acquire an asset, the asset acquired will be separate property unless the community property is CONSEQUENTIAL in comparison with the separate property used.

(10-20%)

CONSEQUENTIALITY TEST IS ONLY FOR CONTEMPORANEOUS MIXING

DOES NOT APPLY TO CREDIT ACQUISITIONS

Question 17

Mixing Fungible Goods

Answer 17

When the spouses mix fungible things identical in kind (e.g. bank accounts), the mixing generally has no effect on classification and they retain their distinct character.

But when there is an indiscriminate commingling such that the funds can no longer be traced, courts may apply the principle of commingling to find the entirety of the mixture community property.

Question 18

Property Acquired through Expert, Skill, or Industry of Spouse

Answer 18

ALL property acquired through the effort, skill, or industry of a spouse is community property.

Property of this type would include salaries and earnings. Any effort, however slight, is sufficient to trigger community classification. (including sweepstakes/ lottery)

Question 19

A spouse may unilaterally reserve the fruits of his separate property to himself, but he must:

Answer 19

(1) execute an authentic act or act under private signature duly acknowledged
(2) record that act, even to trigger effect between spouses, in the parish where the immovables are located AND
(3) provide notice to the other spouse

active investments = kinda both fruits and earnings so court weighs

Question 20

Classification of Prop:
Insurance Renewal Commissions

Answer 20

apportioned and classified pro rata based on when effort was expended to earn them

Question 21

Classification of Prop:
Credit Acquisitions

Answer 21

governed by the inception of title rule

= source of the funds used to make the down-payment (or cash portion of the price) determines classification

Question 22

Management of Community Property

Answer 22

Either spouse, acting alone, may generally manage, control, or dispose of community property under the equal management scheme.

The participation and consent of the other spouse is not required.

(Exceptions!)

Question 23

Exception to Equal Management: Concurrence of BOTH SPOUSES

Answer 23

required for the alienation, encumbrance or lease of:

(1) community immovables and related timber interests;

(2) furniture or furnishings while located in the family home;

(3) all or substantially all of the assets of a community property enterprise;

(4) movables issued or registered in a spouse’s name as provided by law;

(5) all donations of community property, unless the donation is a usual or customary gift commensurate with the economic position of the spouses at the time of the marriage

Question 24

Sole and Exclusive Management

Answer 24

The Code allows for sole and exclusive management in one spouse when:

(1) a spouse acting as the sole manager of a community enterprise to alienate, encumber, or lease its movables

(2) movables issued or registered as required by law in the name of one spouse alone

(3) partnership and LLC interests

(4) contractual relationships under the privity of contract principle

Question 25

Remedies for Mismanagement of Community Property

Answer 25

when a spouse acts violating management rules, it is a relative nullity

if fraud/ bad faith, other spouse can sue for damages

Question 26

Alternatives to Concurrence for Alienation/ Encumbrance

Answer 26

1. renunciation of right to concur
2. judicial authorization in summary proceeding

Question 27

Termination of Community Property Causes

Answer 27

1. Death
2. Declaration of Death
3. Declaration of Nullity of Marriage
4. Judgment of Legal Separation in Covenant Marriage
5. Judgment of Divorce
6. Judgment of Separation of Property
7. Matrimonial Agreement Terminating Community Prop Regime

Question 28

Effects of Termination of Community Property Regime

Answer 28

After termination of the community property regime, but before the spouses partition their property, they are co-owners of the former community property.

The rules of co-ownership apply to spouses during this interim period: Spouses each own an undivided 1⁄2 interest in the former community property, but they must now preserve and prudently manage former community property within their control, in a manner consistent with the use prior to termination.

EQUAL MANAGEMENT NO LONGER APPLIES AND CONCURRENCE REQUIRED FOR DISPOSITION OF COMMUNITY PROPERTY

Question 29

Classification of Obligations (DEBT)

Question 30

Reimbursement

Answer 30

owed as monetary claims to one spouse from another

requires some sort of mismatch between funds contributed to property and the classification of that property

Question 31

Accession Rule between spouses when they created SUBSTANTIAL IMPROVEMENTS on the other’s land

Answer 31

he who owns the land owns the improvments

Question 32

Reimbursement: Use of Separate Property to Benefit Other Spouse’s Separate Estate

Answer 32

entitled to value of the sep prop at the time used

Question 33

Reimbursement: Use of Separate Property to Satisfy a Common Obligation or to Acquire/ Improve/ Benefit Community Property

Answer 33

spouse is entitled to reimbursement for 1⁄2 of the amount or value the separate property had at the time it was used

limitation of liability = only paid if the spouse owing reimbursement has a sufficient net share in the community to pay the claim (NOT limited if obligation was one for ordinary and customary expenses of marriage, or for the support, education, or maintenance of the children of either spouse)

Question 34

Reimbursement: Use of community funds to satisfy a separate obligation or to acquire, improve or benefit separate property

Answer 34

entitled to ½ of amount or value property had at time it was used

*EXCEPTION FOR FMAILY HOME: if family is living there or receiving community prop fruits – reimbursement only for ½ of funds used to reduce the principal portion of loan. Funds used to pay interest of loan are not reimbursed

Question 35

Reimbursement: use of community labor devoted to spouse’s separate property

UNDER/UNCOMPENSATED LABOR

Answer 35

entitled to ½ of the increase in value of separate property attributable to labor

ELEMENTS:
(1) community labor devoted to separate property;
(2) spouse was uncompensated or undercompensated;
(3) labor assisted in increasing value of thing

= burden shifts to other spouse to prove that some or all of the enhanced value is attributable to another cause

Question 36

Educational Reimbursement Claims

Answer 36

= claims for recoupment of monies paid in tuition, books, and living expenses to allow a spouse to get an education, license, or special job training during marriage

FACTORS:
(1) claimant’s expectation of shared benefit;
(2) degree of detriment suffered by claimant;
(3) magnitude of benefit to other spouse

judicial discretion

Question 37

Partition

Answer 37

Community property partitions can be done voluntarily or judicially, although judicial partitions are not permissible during the existence of the community property regime.

Voluntary partitions are contracts subject to all the vices of consent applicable to basic contracts.

Question 38

JUDGMENT OF SEPARATION OF PROPERTY: A spouse may seek to terminate the community property regime and may obtain a judgment of separation of property but stay married.

ELEMENTS:

Answer 38

(1) a spouse’s community interest is threatened by the fraud, fault, neglect, incompetence, or disorder of the affairs of the other spouse;

(2) the other spouse is an absent person;

(3) they have filed a petition for divorce and have lived separate and apart for 30 days before or after filing; and

(4) the spouses have lived apart for six months

Question 39

Responsibilities for Family Obligations

Answer 39

even in separate property regimes, spouses are solidarily liable for NECESSARIES obtained by a spouse for himself or for the family

Question 40

Putative Marriage in Community Property: Common Spouse in GOOD FAITH

Answer 40

common spouse gets 1/2 comm prop

legal and putative spouse share 1/2 share

Question 41

Putative Marriage in Community Property: Common Spouse in BAD FAITH

Answer 41

common spouse gets NOTHING

legal spouse gets 1/2 comm prop

putative spouse gets 1/2 comm prop

Question 42

Credit Acquisitions

Answer 42

Credit acquisitions in Louisiana are governed by the inception of title rule.

funds used to make downpayment on house = classification

Question 43

Classification of Property: Acquiring House on Credit During Community Property Regime

Answer 43

The Louisiana Supreme Court has held that when a couple acquires a home on credit during the existence of the community property regime, the source of the funds used to make the down-payment (or cash portion of the price) determines classification.

TITLE OF PROP IRRELEVANT TO CLASSIFICATION/ LOAN PAYMENTS IRRELEVANT (but may give rise to reimbursement claim)

Question 44

Home Bought by Separate Funds (down payment) and then a Loan

Answer 44

Separate property because determined by the source of funds used to make the down payment

DO NOT APPLY CONSEQUENTIALITY TEST HERE – Under Curtis, that test does not apply to credit acquisitions.

Question 45

When you get reimbursement for contributing labor AND for materials, you CANNOT ______ ______.

Answer 45

When you get reimbursement for contributing labor AND for materials, you CANNOT “double dip”.

aka receive multiple overlapping reimbursements

Question 46

Classification of Property: Note Payments on SEPARATE PROPERTY from a Spouse’s Income During Marriage

Answer 46

= monies here are the result of effort/ skill/ industry of the spouse, so community funds

the spouse will be entitled to 1/2 reimbursement of the community funds to benefit the separate property

LIMITATION WHEN IT RELATES TO NOTE PAYMENTS ON THE FAMILY HOME!!!!!!

Question 47

Limitation for Reimbursement of Note Payments as it Relates to the Family Home

Answer 47

Louisiana jurisprudence generally limits a spouse’s right of reimbursement when it relates to note payments on the family home to reimbursement of 1⁄2 of the funds used to make principal payments ONLY.

Funds used to make interest payments are charged to the community, and reimbursement is typically unavailable for that portion. AKA NO REIMBURSEMENT FOR INTEREST PAYMENTS, ONLY PRINCIPAL!

Question 48

Post-Nuptial Opting Out of Community Property Regime

Answer 48

file a joint petition and wait for the court to approve the agreement to opt out of the community . . .

upon a finding that it serves their best interests and that they understand the governing principles and rules

Question 49

A thing possessed during the marriage is presumed to be ____________ property.

But the spouse can overcome that presumption by a ___________________.

Answer 49

A thing possessed during the marriage is presumed to be community property.

But the spouse can overcome that presumption by a preponderance of the evidence.

Question 50

Obligations in Louisiana are presumed to be __________, except as otherwise provided in article _________.

Answer 50

Obligations in Louisiana are presumed to be community, except as otherwise provided in article 2363.

Question 51

Separate obligations, under article 2363, include:

Answer 51

“an obligation resulting from an intentional wrong . . . to the extent that it does not benefit both spouses, the family, or the other spouse.”

Question 52

embezzled funds into the couple’s joint bank account and “used the funds for household obligations, such as the mortgage payment”

Answer 52

= community obligation because it was an obligation that benefitted the family

Question 53

The rule of _________ in the spousal context is that buildings made on the separate property of a spouse with community funds belong to __________.

Answer 53

The rule of accession in the spousal context is that buildings made on the separate property of a spouse with community funds belong to the owner of the ground.

Question 54

Although obligations incurred by a spouse alone during the existence of the community regime are presumed to be __________ obligations, that presumption may be rebutted by __________ ________.

An obligation will be _____________ when it is one incurred during the existence of the community property regime though _____________________________________.

Answer 54

Although obligations incurred by a spouse alone during the existence of the community regime are presumed to be COMMUNITY obligations, that presumption may be rebutted by contrary evidence

An obligation will be separate when it is one incurred during the existence of the community property regime though not for the common interest of the spouses or for the interest of the other spouse.