Community Property Rule Statements Flashcards
Separate Property
Property:
1) owned before marriage;
2) acquired by gift
3) acquired by devise;
4) acquired by descent;
5) recovered for medical expenses and loss of earning capacity during the marriage.
The presumption is that property possessed by either spouse on dissolution of marriage is community property. Separate property must be proved by clear and convincing evidence.
Community Property
Property, other than separate property, acquired by either spouse during the marriage. The presumption is that property possessed by either spouse on dissolution of marriage is community property. Separate property must be proved by clear and convincing evidence.
When community property funds are used to purchase property in which the title is taken only in one spouse…
the property will be deemed that spouse’s separate property only if the other spouse participates in the transaction in which title was taken.
Inception of Title Rule
the separate or community character of an asset is determined at the time the asset is acquired, and no subsequent actions will alter its character. If community property funds are expended to discharge the secured debt on one spouse’s separate property, the characterization of the property will remain the same, but the community estate may have a claim for reimbursement.
Reimbursement claim
Remedy provided for a spouse when one marital estate (community or separate property) has been used to either contribute to or improve another martial estate (community or spouse’s separate property).
In a divorce, the court applies equitable principles to: 1) determine whether to recognize the claim after taking into account all of the relative circumstances of spouses; and 2) order a division of the claim for reimbursement, if appropriate, in a manner that the court considers just and right, having due regard for the rights of each party.
Whether Royalties are considered Community Property or Separate Property when acquired prior to marriage.
In Texas, income form either spouse’s separate property is considered community property. However, royalty payments from the oil and gas interests in land held as separate property are classified as separate property unless community money or the effort of a spouse was expended in producing it. This is because the production and sale of a natural resource is equivalent to a piecemeal sale of the underlying separate realty, and funds acquired through a sale of separate property are separate property.
Premarital Agreement Enforceability
To be enforceable, a premarital agreement must be entered into voluntarily, and not be unconscionable.
Disclosure test: A premarital agreement is unenforceable if 1) a signing party was not provided a fair and reasonable disclosure of the property and financial obligations of the other party;
2) the party to which disclosure was not provided, did not waive the right to disclosure in writing;
3) the party to which disclosure was not provided lacked adequate knowledge of the other party’s property or financial obligations.
Spousal maintenance justifications
Spousal maintenance
- intended to be a temporary rehabilitative measure for a spouse who is unable to be self-sufficient.
- spouse seeking maintenance must lack sufficient property (including separate property of the spouse) to provide for his minimum needs,
- the spouse seeking maintenance must meet at least one of the following criteria:
i) The other spouse acted criminally in act of family violence committed during the marriage against the other spouse or the spouse’s child within two years before the date on which a suit for dissolution of the marriage is filed or while the suit is pending;
ii) The spouse is unable to support himself through appropriate employment because of an incapacitating physical or mental disability;
iii) The spouse is the custodian of a child of the marriage of any age who requires substantial care and supervision because of a physical or mental disability, making it necessary that the spouse not be employed outside the home; or
iv) The spouse has been married to the other spouse for 10 years or longer and clearly lacks earning ability in the labor market adequate to provide support for the spouse’s minimum reasonable needs.
There is a rebuttable presumption that maintenance is not warranted, unless the spouse seeking maintenance has exercised diligence in (i)earning sufficient income to provide for the spouse’s minimum reasonable needs or (ii) developing the necessary skills to provide for the spouse’s minimum reasonable needs during a period of separation and during the time that the suit for dissolution of the marriage is pending.
Spousal maintenance duration;
A court may not order maintenance that remains in effect for more than:
i) Five years, if the spouses were married to each other for less than 10 years, and the spouse from whom maintenance is requested was convicted or received deferred adjudication for a criminal offense that also constitutes an act of family violence committed during the marriage against the other spouse or the spouse’s child and the offense occurred within two years before the date on which a suit for dissolution of the marriage is filed or while the suit is pending, or the spouses were married to each other for at least 10 years but not more than 20 years;
ii) Seven years, if the spouses were married to each other for at least 20 years but not more than 30 years, or
iii) Ten years, if the spouses were married to each other for 30 years or more.
Sell of Community Property
A spouse can sell, encumber, or dispose of sole management community property without the other spouse’s consent, subject to the “fraud on the spouse” doctrine, which is rooted in the fiduciary duties that spouses owe one another.
Division of community property
Community property must be divided in a “just and right” manner, not 50/50. When determining what division is just and right, the court may consider a host of factors, and may award more than half to one spouse for such reasons including imbalanced contributions and lower earning capacity, fault in the divorce, business opportunities; education; relative physical conditions; relative financial condition and obligations; disparity of ages; size of separate estates; and the nature of the property. Trial court and exercise broad discretion.
Converting Separate Property to Community Property
Spouses can agree to convert separate property to community property, but must do so through a written agreement signed by both parties.
Cash dividends from separate property stock
In, Texas, cash dividends received after marriage from a separate corporate interest are community property.
Sole-Management Community Property
This consists of a spouse’s wages and income from a spouse’s separate property.
Joint-Management Community Property
When the sole-management community property of one spouse is mixed with the sole-management community property of the other spouse, that mixed property becomes joint-management community property. This is the case unless the spouses have an agreement that such property will be managed solely by one spouse.
If property is held in both spouses’ names, it is presumptively joint-management community property. Both spouses must agree on any encumbrance or disposition of joint-management community property.
