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Texas Law > Community Property > Flashcards

Community Property Flashcards

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1
Q

Factors Considered on Appeal:

A 
Age and Physical Health of the parties
Relative earning ability and power
Future support needs
Size of estate
Benefits spouse would have received from continued marriage
Fault
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2
Q

Standard of Review on Appeal:

A

Abuse of Discretion: the division is so disproportionate as to be manifestly unfair and unjust

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3
Q

Characterization of Marital Property arises in

A
  1. Death
  2. Divorce
  3. Purposes of creditor’s rights
  4. Purposes of Management and Control
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4
Q

Standard for Division of marital property

A

Just and Right Division

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5
Q

Separate Property

A
  1. Proper acquired by 1 spouse before marriage or after divorce
  2. Property acquired by gift or inheritance
  3. Property that is acquired as a result of personal injury recovery
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6
Q

“Gift to the community” =

A

Gift of 50% to each spouse

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7
Q

Gift purchased with separate property funds and placed in donee spouse’s name =

A

Separate property gift to that spouse

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8
Q

Gift purchased with community property funds and placed in donee spouse’s name =

A

Presumed to be community property

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9
Q

Gift purchased with community property funds and placed in donee spouse’s name, stated as separate property and both spouses participate =

A

Separate property of the donee spouse

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10
Q

Community property

A

Anything that is not separate property and acquired by the spouse during marriage

Assets acquired during the marriage
Assets purchased on credit during the marriage
Assets possessed by the spouses at the time of divorce, at time of creditor’s claim, and at time of death

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11
Q

Objection to Community Property Presumption

A

Objecting spouse must show clear and convincing evidence that it is not community property

Documentary evidence required
Spousal testimony insufficient

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12
Q

Inception of title rule

A

Characterization of property is determined at the first point when the property is acquired

Assets acquired over time > when first payment is made

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13
Q

Assets purchased with commingled bank account funds during marriage =

A

presumed to be community property

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14
Q

Tracing methods

A
  1. Community Out First Rule
  2. Lowest Intermediate Balance

Used to determine whether separate or community property when purchased with commingled funds

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15
Q

Community Out First Rule

A

In determining whether the moneys left in a bank account are separate property or community property, the rule is that community property moneys are used first

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16
Q

Lowest Intermediate Balance Rule

A

If a bank account has both separate funds and community funds, and the balance of the account drops at some point below the amount of the separate property funds deposited, the court determines what portion of the commingled account should be separate funds by determining the lowest balance during the period between the date that the separate property was first deposited and the date of divorce.

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17
Q

Equitable Interests

A
  1. Economic Contributions - cases filed before 2009

2. Reimbursement - cases filed after 2009

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18
Q

Economic Contributions

A

Community will get a percentage of the current equity, based upon the community contribution that went towards debt reduction, as a fraction of total debt reduction.

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19
Q

Reimbursement

A

The amount the community has actually contributed

Can also contribute time, toil, and talent

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20
Q

Things that do not qualify for reimbursement

A
  1. Living expenses
  2. Student loan payments
  3. Payment of child support, maintenance, or alimony from a prior marriage
  4. Financial contributions towards a professional degree
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21
Q

Income from separate property stock =

A

Cash dividends = community property
Stock Dividends/Split = separate property
Capital Gain = separate property
Stock Options = apportion value based on amount of time involved during the marriage; ratio applies to number o shares that can be exercised; that amount is community property

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22
Q

Trust Income Interests

A

A trust is separate property, as is income from that asset

Exception: community property if the spouse has an unrestricted right to invade the trust corpus

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23
Q

Mineral Interests =

A

Separate property mineral interests that generate income remain separate property

Delay rentals = community property

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24
Q

Quasi-community property

A

Applies at divorce

if the property would have been community property had the couple been domiciled in TX when the property was acquired

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25
Q

Life Insurance Policies =

A

Characterization of first premium payment

Community made be entitled to reimbursement for any premiums paid with community funds

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26
Q

Retirement Benefits =

A

Community property if earned during marriage, vested or not

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27
Q

Defined Benefit Plan =

A

based on number of years of service

Employee spouse’s years of service while married/ Total years of service = community property fraction

Value of benefits frozen at time of divorce by JAR

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28
Q

Determine spouse’s interest in a defined benefit plan by

A
  1. Cash-out - present cash value at time of divorce

2. If, as, and when received decree

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29
Q

Defined Contribution Plan =

A

Use tracing methods to separate amounts contributed while employee was married from amounts while not married

30
Q

Military Retirement Benefits

A

Determine in accordance with state law

31
Q

Military Disability Benefits

A

Preempted by federal law –> not community property

32
Q

Workers’ Compensation Benefits =

A

Follow the time rule
If lost earning capacity during marriage, community property

Before or after, separate property

33
Q

Business Interests

A

The amount of reimbursement is calculated using the value of time, toil, and talent expended, less the value of time, toil, or talent reasonably necessary to maintain the business, and less any compensation already received by the operating spouse

34
Q

Partnership Distributions

A

if the partnership was created before marriage, the partnership and related assets are considered separate property, but any distributions during the marriage are community property.

35
Q

Personal Injury Awards =

A

Generally separate property, except for -

  1. Lost earning capacity
  2. Lost wages
  3. Medical expenses paid by the community
36
Q

A valid premarital agreement must be

A
  1. In writing
  2. Signed by both parties

Does not need consideration

37
Q

Scope of a Premarital Agreement

A
  1. Characterization of an asset
  2. Distribution of assets upon death or divorce
  3. Spousal support
  4. Choice of law
  5. Any other matter that does not violate public policy

Cannot be a conversion agreement
Cannot agree to modify, waive, or relinquish child support

38
Q

Challenges to Premarital Agreements

A
  1. Establish the agreement was executed involuntarily

2. Establish the agreement was unconscionable

39
Q

Must show a premarital agreement was unconscionable by showing

A
  1. there was no full and fair disclosure of assets and obligations
  2. There was no waiver of the right to receive such disclosure
  3. Party had no way of discovering the other party’s assets and obligations
40
Q

Post-Marital Agreements

A
  1. Conversion Agreement
  2. Partition Agreement
  3. Community Property Survivorship Agreement
  4. Palimony Agreements between Unmarried Cohabitants
41
Q

Conversion Agreement

A

Separate property will be converted into community property
Intent of the parties is key
Must be clearly set out in the agreement

42
Q

Partition Agreement

A

Parties can agree to an unequal distribution of community property

43
Q

Defenses to a Partition Agreement

A

Common law defenses

Must be involuntary or unconscionable

44
Q

Community Property Survivorship Agreement

A

Allows for the right of survivorship for community property upon death

45
Q

Requirements for Community Property Survivorship Agreement

A
  1. Must contain the language, “with the right of survivorship” in order to pass to the surviving spouse
  2. Must be in writing and signed by both parties
  3. Agreement can be revoked by either spouse by written notice to the other
  4. Agreement is valid and does not need a court order (although one may be needed for enforcement)
46
Q

Palimony Agreements - requirements

A

Valid if in writing and signed by party against whom agreement is to be charged

47
Q

Property acquired by Adverse Possession =

A

If started before marriage, but ended during = community property

If started before marriage under color of title = separate property

48
Q

Types of Marital Property for Management Purposes

A
  1. Separate property
  2. Sole Management Community Property
  3. Joint Management Community Property
49
Q

Management of Separate Property

A

Each spouse has management and control over his separate property

The other spouse has no management powers over her spouse’s separate property

50
Q

Sole Management Community Property

A

If the property is held in one spouse’s name or is in the possession of one spouse without any documentation regarding joint ownership, the property is presumptively that spouse’s sole management community property

51
Q

Management of Sole Management Community Property

A

Under the sole management and control of one of the spouses

52
Q

Joint Management Community Property

A

If property is titled in both spouses’ names, it is presumptively considered joint management community property, and both spouses must agree upon any encumbrance or disposition of the property.

Joint management community includes sole management community property that is mixed together with the other spouse’s sole management community property

53
Q

Management of Joint Management Community Property

A

both spouses have equal rights to manage and control the property

54
Q

General Presumption regarding Contract Liability

A

Debts acquired during the marriage are joint debts, which subject all separate and community property to satisfy the debt

55
Q

If only one spouse is obligated on a contract

A

Creditors can only reach property over which the debtor spouse has management and control

56
Q

Tort Liability

A

depends on when the tort occurred

During the marriage: creditor can reach all community property
Before the marriage: can only reach property under tortfeasor’s management and control

57
Q

Factors Considered in the Division of Community Property

A
  1. Spouses’ capabilities and abilities
  2. Benefits that the innocent spouse would have derived from continuation of the marriage
  3. Each spouse’s relative business opportunities, financial condition, obligations
  4. Education of each spouse
  5. Physical Health
  6. Age disparities
  7. Size of separate property estates and assets
  8. Nature of assets
  9. Duration of the marriage
  10. Fault
58
Q

Spousal Maintenance

A

Temporary rehabilitative measure

59
Q

Eligibility for Spousal Maintenance

A
  1. He or she lacks sufficient property to provide for his or her minimum reasonable needs AND
  2. One of the following:
    a. Spouse was the victim of an act of family violence that happened within the prior 2 years before the date on which dissolution was filed, and that the other spouse was convicted or received a deferred adjudication for an act of family violence
    b. The spouse was unable to support herself through employment because of an incapacitating physical or mental disability
    c. The spouse was the custodian of a child of that marriage who requires substantial care and supervision because of a physical or mental disability, rendering it so that the spouse cannot be employed outside the home.
    d. The spouse was married to the other spouse for more than 10 years and lacks the ability and earning capacity to seek employment that would provide for his or her minimum reasonable needs
60
Q

Defense to Spousal maintenance

A

Party seeking maintenance has not exercised due diligence in earning sufficient income or in developing the necessary skills to provide for his or her own minimum reasonable needs

61
Q

Factors Determining Maintenance

A
  1. Each spouse’s ability to provide for his or her minimum reasonable needs
  2. Education and employment skills of the spouses and the time necessary to acquire sufficient education or training to become financially independent
  3. Duration of the marriage
  4. Age, employment history, earning ability, and physical health and conditions of the spouse seeking maintenance
  5. Effect on each spouse’s ability to provide for his or her minimum needs and also provide for child support
  6. Acts by the parties that resulted in excessive or abnormal expenditures or destruction of community property or jointly held property (economic misconduct)
  7. Contributions of the spouses to the education, training, or increased earning capacity of the other spouse
  8. Separate property owned by each spouse
  9. Contributions of a spouse as a homemaker
  10. Marital Misconduct, including adultery and cruel treatment
  11. History of family or domestic violence
62
Q

Duration of Spousal maintenance award

A

5 years: marriage was 10-20 years;

63
Q

Exception to Duration of Spousal Maintenance

A
  1. Physical or mental disability of the spouse seeking maintenance
  2. Spouse seeking maintenance is the custodian for a young child of the marriage
  3. Any significant, compelling impediment to seeking employment and meeting reasonable financial needs
64
Q

Amount of Maintenance

A

Lesser of $5,000 per month or 20% of the obligor spouse’s monthly gross income

65
Q

Modification of Spousal Maintenance

A

Court only has discretion to modify downward

Awarded upon showing of material and substantial change to the circumstances of the parties

66
Q

Termination of Spousal Maintenance

A

Either party dies

Party receiving maintenance remarries or cohabitates

67
Q

Effect of Bigamous Marriage

A

Two people knowingly enter a bigamous marriage: property not in the community property system

Putative Spouse: 1/2 to the preexisting marriage as community property; 1/2 to putative spouse as tenants in common

68
Q

General Rule for Gifts of Marital Property

A

A spouse can make reasonable gifts of community property without the other spouse’s consent. But best practices dictate that both spouses should agree to any gift or transfer of community property

69
Q

Challenging a gift of community property

A

Challenging spouse claims that there has been a fraud perpetrated on him that was unreasonable

70
Q

Factors determining whether gift is reasonable

A
  1. Relationship between the donor spouse and donee
    (unrelated –> presumed to be fraud)
  2. Relative amount of the gift as it is compared to the size of the community estate in general
  3. Whether the non-consenting spouse is adequately provided for out of the remaining community estate
  4. Whether the gif was made from the donor spouse’s sole management community property, and
  5. Whether there were offsetting gifts
71
Q

Remedy for Fraud on the Community

A

Reconstitution

Court can grant any legal or equitable relief to achieve a JAR division

Texas Law (11 decks)

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