Quasi/ Income from SP Flashcards
1
Q
stock options
A
- when granted to an employee, a stock option is considered compensation
- granted in lieu of or in addition to a salary
- requires vesting (usually over a 3yr pd)
- option gives employee right to buy shares in the co. at a particular price on or before a particular time (typically 10 yrs)
2
Q
inception of title- stock option
A
- if the vesting period accrued during marriage, that part of the option is CP
- if any part of the option accrues after or before marriage, that portion is SP
3
Q
Trusts
A
- Present possessory right to the corpus of the trust
- allows a B to enter the trust at will and take trust principal
- trust income that could have been taken by the B is treated as CP
- B has rights to reach the corpus that determines prop rights in a divorce case
4
Q
Continuing Gift Theory
A
- get trust as a gift
- trust assets are sep prop, but interest and dividend distributions are CP because they are income during the marriage
5
Q
mineral interests
A
- considered RP interests
- payments for a royalty or working interest are SP if the underlying interest is sep prop
- exception: delay rentals are considered CP
6
Q
livestock and crops
A
- when SP livestock produce offspring, the offspring are treated as CP
- proceeds derived from crops are CP
- proceeds from the sale of lumber are Cp
7
Q
Quasi-CP
A
- married couples were living in common law states, moved to TX, and are seeking divorce in TX
- base on prop situs at acquisition
- out of state prop is treated as Q-CP if it would have been CP in TX, had the spouses been in TX at the time they acquired it
8
Q
Assets purchased with credit
A
- when a spouse borrows money during the marriage, the C estate is obligated to pay the debt
- assets acquired by a debt incurred during marriage are C assets
- exception: creditor can agree to use only one spouse’s S estate for repayment
- can be overruled by agreement
