IV. DIVIDING THE MARITAL ESTATE Flashcards
At divorce courts make a
Some assets cannot be split or sold easily, like shares in closely held corporations. How can courts divide an estate with these assets?
At divorce, courts make a “JUST AND RIGHT” division of CP. They cannot divide SP. A trial court’s determination of the just and right division will only be overturned if it is manifestly unjust and constitutes an abuse of discretion
use non-exhaustive list of factors:
disparity of earning capacities
length of the marriage
they can order periodic payments give shares
A. Maintenance
A spouse can receive maintenance in four cases:
THREE CLARIFICATIONS:
A. Maintenance periodic payment from one to the other A spouse can receive maintenance in four cases: 1. 10+ year marriage 2. family violence 3. spousal disability 4. child disability EACH REQUIRES that the spouse seeking maintenance will LACK SUFFICIENT property, TO PROVIDE FOR the spouse's minimum reasonable needs
THREE CLARIFICATIONS:
1. property includes SP and any CP they get in divorce
2. The obligee (receiving) does not have to spend down long term asset or incur new debt
3. Loss of employment or other circumstances that occur after the divorce are not grounds to institute a spousal maintenance award.
A. Maintenance
Statutory LIMITS ON DURATION (for all types of maintenance)
Maintenance terminates upon:
(a) Maintenance is limited to the 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:
(i) the spouse’s disability, or
(ii) the spouse’s duties as the custodian of a young child of the marriage, or
(iii) another compelling enpetment to earning sufficient income.
(b) Maintenance terminates upon:
(i) the death of either spouse
(ii )the remarriage of the obligee
(iii) obligee’s cohabitation with a romantic partner
Statutory LIMITS ON AMOUNT of the payments (for all types of maintenance)
: Lesser of 5k or 20% of the obligor’s gross income.
GROSS INCOME includes all sources of income except returns on principal or capital, accounts receivable, government assistance such as disability payments, workers’ compensation, social security, and the like.
FACTORS courts can look to when setting the AMOUNT of the payments (for all types of maintenance):
(b) Each spouse’s employment skills, including the time necessary to acquire additional
(f) Excessive or abnormal expenditures or destruciton of the CP (gamble)
(g) Contributions by one spouse to the other’s education, training or earning capacity
contributions of a spouse as a home maker
marital misconduct
any history of family violence
ADDITIONAL REQUIREMENTS AND ADDITIONAL LIMITATIONS FOR EACH TYPE OF MAINTENANCE:
10+ MARRIAGE:
additional requirements and limitations
Statutory Requirements
(a) Married to the other spouse for 10 yrs or longer.
(b) Lacks the ability to earn sufficient income to provide for the spouse’s minimum reasonable needs.
There is a REBUTTABLE PRESUMPTION that maintenance for a 10+ year marriage is not warranted unless the spouse seeking maintenance has exercised diligence in earning sufficient income or developing skills to provide for the spouse’s minimum reasonable needs.
Statutory limits on duration of payments
10-20 year marriages: up to 5 yrs of M
20-30 year marriages: up to 7 yrs
30+ year marriages: up to 10 yrs
FAMILY VIOLENCE: additional requirements and limitations Statutory Requirements
(1) Convicted of or received deferred adjudication for a criminal offense that also constitutes an act of family violence thats committed during the marriage against the spouse or the spouse’s child, and
(2) The offense occurred within 2 yrs dissolution of the marriage is filed; or while the suit is pending
Statutory limits on duration of payments For marriages less than 10 years: 5 yrs
Otherwise: limit for 10+ marriage
SPOUSAL DISABILITY: additional requirements and limitations
Statutory Requirements
a phsical or mental disability sufficient income to provide for his or her minimum reasonable needs
Statutory limits on duration of payments
as long as the eligibility persist
CHILD DISABILITY: additional requirements and limitations
Statutory Requirements
(1) ***Marital child (not defined) suffers from a phsical or mental disability
(2) Requiring substantial care and personal supervision
(3) Preventing the caretaking spouse from earning enough to provide for his or her minimum reasonable needs
Statutory limits on duration of payments
as long as the eligibility persist
ALIMONY DISTINGUISHED
i. Modification of a spousal maintenance award
Texas courts will not award “alimony.” But…
Courts can enforce contractual alimony that is, periodic payments from one ex- spouse to the other that the spouses agreed to as part of their divorce settlement.
Courts can give temporary payment during the course of the divorce proceeding.
Courts can award periodic future payments if they are referable to property that could not easily be divided.
i. Modification of a spousal maintenance award
A maintenance order can be modified downward but not  upward upon a showing that there has been a material and substantial change
ii. Cohabitants and putative spouses (the other spouse didn’t divorce)
An order for maintenance is not authorized between unmarried cohabitants under any circumstances. In a suit to declare a marriage void, a putative spouse who acted in good faith and without the knowledge of the inpedment may be awarded maintenance if otherwise qualified to receive maintenance.
B. Reimbursement
SP property with addition paid with CP money, and mortgage payment made with CP money
Sometimes, spouses use SP money to benefit CP property, or vice versa. These contributions do not change the character of the property, but they can give rise to equitable claims for REIMBURSEMENT.
Unsecured Debt (e.g. credit card debt) including interest
Secured Debt (e.g. mortgages) repayment for secured debt, reimbursement claim is limited to reduction and principle; no interest back
Capital improvements
For improvements, reimbursement is measured by enhanced value
Life Insurance
Time, Toil, and Effort
own company, use all salary to reinvest
Value of claim: Value of the time effort beyond that reasonably necessary to maintian the SP, minus any salary or other payments that he received
-reimbursement claim do not affect the inception of title, nor create an ownership interest
neither CP payment for the mortgage nor the CP addition affect the characterization of the SP property, but they give rise to reimbursement claim
OFFSETS
Homer buys a sailboat before marriage by borrowing $100,000. He pays off the loan with CP funds. Marge uses the boat every weekend. To rent a boat for those weekends would have cost $20,000. What is the value of the community estate’s reimbursement claim?
***exception
Reimbursement is an equitable remedy that gives trial courts discretion
A court might find that the contributing estate has received offsetting benefits that justify denying or reducing the reimbursement claim.
80k
One statutory EXCEPTION to “use and benefit” offset. Courts cannot offset a reimbursement claim based on the use and benefit of a primary or secondary residence
A spouse has NO REIMBURSEMENT CLAIM for:
1, payment of child support, alimony and spousal M
2, the living expenses of a spouse or child of a spouse
3, nominal contributions of property
4, nominal payments towards a liability
5, payments towards a student loan owed by a spouse
6, spousal gifts
C. Fraud on the Spouse
gift
Reasonable gifts of CP to third parties are allowed, excess or capricious gifts might constitute a fraud on the spouse, and be set aside as constructive fraud
Relevant factors include:
1, who got the gift
2, the size of the gift in relaiton to the Community state
3. Whether the spouse can be made whole out of the remaining community estate
A PRESUMPTION OF FRAUD arises when one spouse disposes of community property unfairly, or without the other spouse’s knowledge or consent
The burden then shifts to the donor to show that the use of CP funds was fair. Some cases have also held that a gift to an unrelated person is presumptively fraudulent.
ACTUAL FRAUD: When the donor spouse intended to deceive the wronged spouse and intended to deprive her of her community share.
CONSTRUCTIVE FRAUD: When the donor spouse makes gifts of the CP but does not intend to deceive and deprive that spouse of her community share.
Actual fraud is more culpable, and could result in a more skewed just and right division.
i. Remedies for Fraud (gift) on the Spouse
(1) Challenge the gift during donor’s life: gift can be set aside in its entirety
(2) Challenge the gift after the donor dies: gift will be set aside only as to the wronged spouse’s 1/2 interest in the property
(3) In cases of divorce or death, the court will calculate a reconstituted estate which consists of all the property that would have been in the community estate absent the fraud.
UPON DIVORCE the court will split the reconstituted estate in a just and right manner
This could include: disproportionate shares and money judgment or both
UPON DEATH the court will split the reconstituted estate 50/50
1, award other CP of comparable value and let these assets remain with the donee, if the size is large enough
2, if 1 not feasible, judgment imposing joint and several liability against donee and doner spouse
3, if title is under donee’s name then can enter a turnover order requiring the title be restored to CP
4, money judgment against donee, if money was spent
D. Later-discovered CP
Homer waits another twenty years before bringing suit. Marge is collecting dividends from the stock during this time, and not sharing those dividends with Homer. Has the statute of limitations run?
E. Errors not appealed
The divorce court characterized and divided Homer’s military disability benefits, and Homer did not appeal. Can Homer correct the trial court’s mistake?
divorced couple will be tennance in common in the property bought by one spouse with CP during marriage
bring suit for partition to obtain
court will divide in a just and right manner
STATUTE OF LIMITATIONS: A partition suit under the family code must be brought within TWO YEARS after one former spouse unequivocally repudiates the existence of the ownership interest of the other former spouse and communicates that repudiation to the other former spouse.
no; Marge never repudiate Homer’s share
no, appeal was the way to correct
