Community Property Flashcards
Burden of Proof
C&C Evidence—degree of proof which will produce in the mind of a trier of fact a firm belief or conviction as to the truth of the allegations sought to be est
SP
Prop acquired before marriage (inception of title rule—can claim reimbursement for CP expended to discharge secured debt); acquired during marriage by gift, devise, or descent; acquired during marriage but purchased w/SP funds (tracing)—C&C evidence
Spouses are the only ones who can convert SP to CP via a written agreement (not gift giver): If give to both then their SP.
CP
Property other than SP acquired by either spouse during marriage presumed CP unless (i) asset acquired by gift, devise, or descent or (ii) acquired w/SP
CP presumption; must provide C&C evidence prop is SP
Spouse can make a reasonable gift of CP without other’s approval. Courts consider: donee’s relation; amount of gift relative to community estate; whether surviving spouse receives that much in other CP; and whether gift was donor’s sole management property (e.g., life insurance beneficiary)
Divide in a JUST AND RIGHT MANNER (maybe not 50/50: especially if homemaker with lower earning potential. Abuse of discretion review and can consider many factors)
Title and inception of Title Rules
Title: Name listed on the title is not relevant to the asset’s characterization. Exception: title relevant to whether 1 party intended to make a gift of asset
—IF CP funds used to purchase property in which title is taken in only 1 spouse’s name as their “sole and separate property” then deemed SP only if the other spouse participates in the transaction
Inception of Title Rules: SP or CP designation determined at time it is acquired. Exceptions: pensions and stock options.
—Thus, if use SP to pay down a house then get proportional interest in that house as SP and rest is CP
Tracing, Commingling, and Bank Accounts
CP out of bank account first presumption. Overcome if deposit and withdrawal were (1) close in time and (2) close in amount
SP is lowest balance last in SP account (before CP mingling)
Income from SP is CP Exceptions
Interspousal gift; partition and exchange agree (partition and exchange CP for SP all inc from it is SP); minerals/ONG royalty
Appreciation in Value
Appreciation in Value of SP is SP (stock div is SP)
Tort Recovery
Pre-marriage injury = SP
During Marriage = lost wages/lost earning capacity/medical exp (CP); pain and suffering/lost consortium/disfigurement (SP)
IF settlement does not mention what portion of recovery for each then the entire recovery = CP
Adverse Possession
AP entered land under a claim of right, eventual title related back to original entry, inception of title occurs at this date (first entry)
If AP entered land as naked trespasser, obtains title only when AP completed. Inception relates back to this date (after AP SoL)
Life Insurance Policy
Inception of title rules.
If name spouse as beneficiary; divorce terminates unless:
• Divorce decree names spouse as beneficiary
• Renamed as beneficiary post-divorce
• Originally named beneficiary in trust
• Insurance plan part of RISA, fed law preempts
Stock Options
Inception of title N/A. Pro rata, earned during marriage
Employee Retirement Benefits
Inception of title n/a, Retirement benefits akin to wages. If earned partially pre-marriage and during then part SP and CP, regardless of when vested. CP frozen at time of divorce
If participation began before parties married = SP. If during = CP.
If “qualified” ERISA and non-participating spouse predeceases participant then fed law preempts state law and CP int ceases = SP
Disability Benefits and Worker’s Compensation
Characterized the same way as the wages they intend to replace. Exception: military benefits SP because fed preempts
Business Interests
Incorps: based on capitalization of SP vs. CP (tracing)
Pr: inception of title but proceeds = CP
Goodwill
• Business: earned during marriage = CP before is SP
• Professional: not property (not CP or SP)
ONG: royalty payments from ONG interests in land held as SP = SP unless community money or effort of spouse was expended in producing it since = to piecemeal sale of underlying separate realty
Advanced Degrees
Not property (not subject to characterization)
Debt
during marriage=CP unless creditor looks only to borrowing spouse’s SP for repayment. “community debt” just means some CP liable for debt (not JSL)
Buying on Credit: Amount of proceeds secured from CP = that portion of asset is CP.
Community credit presumption is that all funds borrowed and all goods purchased on credit during marriage are presumptively community debt
Property Acquired in Another State
Divorce: Quasi Community Property: Property that would have been CP had the spouses acquired it while domiciled in TX. Divide in a just and right manner. Don’t divide quasi SP.
Death: Non-CP states salary is SP; title determines ownership; property rights don’t change when move to TX
Dividing the Marital Estate
“just and right” division of CP. Cannot divide SP. Only overturned if manifestly unjust and constitutes an abuse of discretion.
Premarital Agreement
Premarital Agreement unenforceable if unconscionable when signed and 3 part test shows disclosure problem:
(1) not provided a fair and reasonable disclosure of the property and financial obligations of spouse;
(2) not given a written waiver of right to disclosure; and
(3) did not have adequate knowledge of spouse’s property or financial obligations
Burden on contestant to show (1) did not voluntarily sign or (2) unconscionable and did not receive proper disclosure property/liabilities
May not include provisions converting future SP into CP—only currently married couples may do this
Spousal Maintenance (Reqs; Durational Limits; Termination;
Must lack sufficient property to provide for the spouse’s minimum reasonable needs.
10+ marriage; family violence; spousal disability; child disability
Limited to shortest reasonable period that allows the spouse seeking maintenance to earn sufficient income to provide for minimum reasonable needs unless the spouse’s ability to do so is substantially or totally diminished because of
o Spouse’s disability
o Duties as custodian of young child OR
o Another compelling impediment to earning sufficient income
Terminates upon:
o Death of either ex-spouse
o Remarriage of oblige
o Obligee’s cohabitation with a romantic partner
Statutory Limits on Spousal Maintenance
Lesser of $5K/month or 20% of the obligor’s gross income
Spousal Maintenance Considerations
Court can give unequal divisions of CP if “just and right” and held at abuse of discretion standard of review
• Fault in the breakup
• Each spouse’s ability to provide for their minimum reasonable needs independently
• Each spouse’s employment skills, incl time necessary to acquire additional edu or training
• Duration of marriage
• Age, employment history, education
• Effect of child support obligations
• Excessive or abnormal expenditures or destruction of CP
• Contributions by 1 spouse to other’s edu, training, or earning cap
• Property brought into marriage
• Contributions as homemaker
• Marital misconduct
• History or pattern of family violence
Spousal Maintenance: 10+ Year Requirement
(1) lack sufficient property to provide for min. reasonable needs; (2) married to other spouse for 10+ and (3) lacks ability to earn sufficient income to provide for reasonable needs (must have exercised diligence in seeking suitable employment or in developing necessary skills to become self-supporting)
Rebuttable presumption that maintenance is not warranted unless spouse seeking maintenance has exercised diligence in earning sufficient income or developing skills to provide for min reasonable needs
10-20 marriage: up to 5 years of maintenance
20-30 marriage up to 7 years of maintenance
30+ up to 10 years of maintenance
Modification of Spousal Award: DOWN not up after showing material and substantial change
Alimony
Tx courts will not award “alimony” but can enforce Kual alimony; can give temporary payments; can award future payments
Family Violence
Convicted of or received deferred adjudication for a criminal offense constituting an act of famly violence against spouse or spouse’s child AND
Offense occurred within 2 years before date on which a suit for dissolution of marriage is filed or while suit was pending.
Statutory limits on payment duration: less than 10 year of marriage then 5 year limit if family violence.
Spousal Disability
phys or mental preventing from earning sufficient income to provide for min reasonable needs. Maintenance as long as eligibility exists
Child Disability
- Marital child suffers from phys or mental disability
- Requiring substantial care and personal supervision
- Preventing caretaking spouse from earning enough to provide for their min reasonable needs
- Duration as long as eligibility exists
Reimbursement
SP to pay off unsecured debts;
SP to pay off principal (interest not reimbursable)
Capital improvements measured by enhanced value
For repayment of secured debts reimbursement claims limited to reduction of principle (not int or enhanced value)
Life insurance: SP used to pay premiums
Time, toil and effort of running SP business minus any salary or other payments received for the efforts
Can deny or reduce reimbursement claim (offsets) at court’s discretion if contributing estate received offsetting benefits.
No reimbursement for: payment of child support/alimony/maintenance; living expenses of spouse or child; nominal contributions of property; nominal payments toward liability; payments toward a student loan; spousal gifts.
Fraud on the Spouse
Reasonable CP gifts to 3rd allowed, excessive or capricious may constitute fraud: who gets the gift? Size of the gift in relation to entire estate? Can the spouse be made whole?
Remedies:
• Set aside/challenge gift after donor dies but will be set aside only to wronged spouse’s ½
• Reconstitute estate as if fraud didn’t happen and then split in a just and right manner
Acceptance of Benefits
Litigant is estopped from appealing or otherwise attacking a judgment after voluntarily accepting its benefits. Fact-dependent focused on preventing unfair prejudice and irremediable disadvantage to opposing party.
Later Discovered CP (SoL?)
Can bring a suit for partition and court will divide CP in just and right manner
• SoL: must be brought within 2 years after 1 former spouse unequivocally repudiates the existence of the ownership interest of the other former spouse and communicates repudiation to other former spouse
Enforcing Judgments (SoL?)
Generally a 10 year SoL applies. Exception 2 year when enforcing division of tangible personal property in existence at time of divorce or future property
Prenuptial Agreements
Premarital Agreement unenforceable if unconscionable when signed and 3 part test shows disclosure problem:
(1) not provided a fair and reasonable disclosure of the property and financial obligations of spouse;
(2) not given a written waiver of right to disclosure; and
(3) did not have adequate knowledge of spouse’s property or financial obligations
Burden on contestant to show (1) did not voluntarily sign or (2) unconscionable and did not receive proper disclosure property/liabilities
can not K wrt child custody or limiting child support
Partition and Exchange Agreements
Current or future CP into SP. Require: signed, writing but consideration not required. Void to creditor whose rights intended to be defrauded by it.
Conversion Agreement
Convert SP into CP
Must be in writing, signed by both spouses (consideration not required);ID property being converted and specifying its being converted into CP.
Must be made during marriage wrt existing SP/must alter characterization immediately/does not effect preexisting creditor’s rights
Spouse challenging must prove: did not sign voluntarily; no fair and reasonable disclosure of conversion (cannot be waived)
CP Survivorship Agreement
CP will become property of surviving spouse
In writing, signed by both spouses. Must have “right of survivorship”
Cohabitation Agreements
Not between spouses
Property rights of unmarried cohabitants. Written, signed by both parties.
Standard K limits (fraud, duress, etc.)
Putative Marriage
Get ½ CP and other ½ between married and other spouse as long as acting in good faith and without knowledge of impediment to marriage.
If impediment is removed, then CP division as usual
Management Rights / SMCP / Jt Mgmt
Spouse has sole management over her SP
If title to CP in only spouse’s name then presumed the asset is sole mgmt. community property (SMCP), which gives that spouse the power to manage, control, transfer, encumber, dispose w/out other’s consent. Exception: homestead
Joint management over property purchased with CP and comingled SMCP. If CP taken out in both names, assume JMCP
Creditor’s Rights
Incurred before marriage—can collect from property the debtor spouse has mgmt. rights over (SP and SMCP and all JMCP)
Incurred during marriage—non-tortious debts incurred during marriage, creditors can collect from
—Prop debtor spouse has mgmt. rights over (SP, SMCP, JMCP)
—Exceptions: 1 spouse acted as the other’s agent; both spouses personally liable for necessaries; tortious debt
