Community Property.txt

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Community Property.txt
2011-10-20 16:55:00

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  1. Separate Property
    • 1. premarriage
    • 2. acquired by gift/inheritance
    • 3. acquired by partition or exchange of CP
    • 4. tracing (prop purchased w/ SP)
    • 5. tort: receipt for personal injury except for med expenses or loss of earning capacity
  2. CP
    • 1. all but separate property acquired during marriage
    • 2. income from SP is CP (but sole mgmt) unless:

    • - agree otherwise in writing
    • - gift one spouse to other - income on that property is presumed SP
    • - if partitioned, can agree in writing that i on that is SP
  3. Community Presumption
    • - all assets acquired dur marriage
    • - all assets acquired w/ credit during marriage
    • - assets on hand at time of event (death, divorce, etc.)

    - Burden: C/C by party contending otherwise
  4. Property Brought to Texas
    H/W sell NJ home for 40k

    Move to TX

    Buy 100k home - 40k down

    • = 40K Separate property (if marr term by death)
    • = 60K Community Debt

    If Divorce = 40K Quasi Community Property
  5. Quasi CP
    If property would have been CP in JN under TX laws, then = QCP here (upon divorce)
  6. Live in TX, but own property in SP state
    land is not communtiy property, but states will TX courts will recognize other spouse's interest
  7. Community Credit Presumption
    1. only can overcome presumption w/ "non recourse note" where borrowing spouse is also not liable

    doesn't even matter if other spouse didn't sign/guarantee/encumber assets
  8. Inception of Title
    CP or SP at time acquired (except retirement assets)

    subsequent events don't affect characterization

    (but claim for economic contribution? - still exist?)
  9. Inception of Title (put in one name)
    SP used = title holder's SP (by gift)

    CP used = CP, but only slight evidence needed to ovecome presumption of CP
  10. Economic contribution?
    • Yes. Using community funds to
    • reduce secured debt or making improvements on SP)
  11. Life Insurance
    1st premium determines CP or SP

    • If bought in SP state and brought to TX
    • = SP upon death
    • = QCP upon divorce

    Claim for reimbursement? still exist? NO.

    and claim for contribution not available b/c not reducing secured debt or making improvements on SP

    claim for fraud on spouse if used CP, but not named beneficiary
  12. Pension
    - divides by % married / not married upon term by divoce

    - but spouse has no interest if died
  13. Defined Contribution Plan - 401k
    assets in account upon marriage, including appreciation = SP

    additional contributions, as well as income and dividends on both SP and CP = CP
  14. Wage Replacement & Disability
    CP or SP based upon when received, not earned
  15. Stock Options
    Prorated time married v. unmarried
  16. Business Interests
    Inception of Title, but:

    - claim for equitable reimbursement - REPEALED

    • - value of time/talent (minus)
    • - value of time necessary to preserve (minus)
    • - compensation received by H in dividendes & bonus (which was CP)
  17. Commingled Assets
    "Community Out First"

    • - $25K into account
    • - up to $50k w/ CP
    • - down to $12K
    • -up to $50 (CP)

    =$12k is SP, rest is CP (lowest balance, spent CP, then SP down to $12k -- went back up to CP, but was CP
  18. Division Upon Divorce
    "just and right" but can't award SP of one to the other

    Cannot gift property to H/W as CP (actually 1/2 SP of each)

    Can set aside SP for payment of child support though
  19. Just and Right Considerations
    as long as not so disproportionate to be manifestly unjust and an abuse of discretion

    - age, earning power, need for support, size of estate, tax

    - later discovered CP is divisiable
  20. Spousal Maintenance
    - married 10 yrs, lack property, lack skills/disabled/custody of disabled child

    • - lesser of:
    • -2500/mo and 20% of monthly income

    - limited to time to get job/sklls and can be modified
  21. Divorce and then Death (Ben designations)
    LI = predeceased

    ERISA = x-spouse takes

    Property Casualty: go to benenficiary ex-spouse only if awarded property
  22. Sole Business / related assets upon divorce
    goodwill not divisible

    shares are divisible

    K for sale is divisible

    professional education not divisible
  23. Multiple Spouses (CP v. SP)
    • H/W
    • H also marries Z
    • makes 100k

    • 50K = Z SP (unless knows of other marriage)
    • 50K = H/W CP

    but if W dies, then marries Z = all CP
  24. Trust Income (SP v. CP)
    income for life, then principal to kids

    income = SP

    income for life, but can w/draw P at 40

    income = SP until 40
  25. Minerals
    Delay Rentals are only CP interest

    Rest is SP
  26. Corporate Distributions
    • CP:
    • - Cash dividendes
    • - Interest earned on IRA

    • SP:
    • - Stock Dividence
    • - stock split
    • - cap gains from sale
  27. Mutual Funds
    Cash Dividend (dividend and interest received by mutual fund) = CP

    Cap Gain Dividend (share of sale of mutual fund holding) = SP
  28. Animals
    puppies are CP
  29. Premarital Agreement - requirements
    • - in writing
    • - signed
    • - no consideration necessary
    • - can make i from SP = SP
    • - can include testamentary requirements
    • - can alter homestead, spousal support, fam allowance, etc. (but not child support)
  30. Premarital - can't...
    alter child support

    say X will be CP (b/c not married yet)
  31. Set aside premarital agreement
    1. involuntarily executed; or

    • 2. uconscionable when made &
    • - no fair disclosure of property/obligation
    • - rigt to disclosure not waived
    • - no adequate knowledge of property

    (burden on party seeking to set aside)
  32. Marital Agreements/Conversions (not Pre-m; purposes)
    • 1. equalize estate
    • 2. bump up in basis
    • 3. must be in writing, signed by both parties
    • but lose some creditor protection; exposes to divoce; lose abilty to dispose of by will;

    both must sign
  33. Partition Agreement
    valid against BFP if filed in county where property located

    valid against preexisting unsecured creditors (unless intent to defraud)
  34. Survivorship Agreements (CP): that all/part/specific CP belongs to SS upon death
    1. must be in writing and signed by both (whereas between ROS account betweenparent and child only needs signing by deceased party)

    2. either spouse may revoke w/ notice to other

    3. Court order: not a probate asset, but probate won't then vest title, so stattue authorizes proceeding where orders agreement valid

    4. Exec unaware and sells assets: BFP protected and exec not liable

    5. 3rd party buys from SS w/o notice of revocation: as long as 6 months after dead, purchaser takes title against decednet's successors
  35. Fraud on the Spuouse's Community Share
    Spouse can make "reasonable gifts" of CP so long as not so disproportionate as to be in fraud of spouse's communtiy rights:

    1. relationship to donee

    2. amount in relation to estate

    3. special circumstances

    4. spouse adequately provided for out of remaining estate

    5. was gift of donor's sole mgmt CP

    (same test for setting aside LI proceeds where premiums paid w/ CP)
  36. Illusory Trust (marital property doctrine)
    • H sets up trust w/ D as Trustee w/ CP
    • H income for life
    • W income for life
    • D can't sell, vote, etc. w/o H's consent
    • on death of survivor, D gets property

    = illusory b/c retained control, subject to challenge

    if H had no control over D, not illusory (even though could revoke)
  37. Creditor's Rights after Divorce
    Divorce has no affect on creditor's rights

    if W signed note = liable, even if court makes H pay entire note as part of just and right division of assets/liabilities

    if W didn't sign note = not liable, and no personal action against W available. but can seek to have constructive trust imposed on the CP set aside to her

    but W
  38. Marital Property Management
    - Separate Property

    - W's sole mgmt CP: salary, income from SP

    - joint mgmt CP: if sole mamagement of each spouse is combined

    - H's sole mgmt CP: salary, income from SP

    - H's SP
  39. Apparant Authority to Sell
    property titled in one spouse's name (or in one spouse's possesson, if asset doesn't have title) is presumptively subject to that spouse's sole management

    BFP protected
  40. Liability for Torts
    Judgment against W for $25k from a tort

    Creditor's reach

    • CP: yes
    • W's SP: yes
    • W's sole mgmt CP: yes
    • Joint mgmt CP: yes
    • H's sole mgmt CP: yes
    • H's SP: NO
  41. Tenants in Common
    Both own whole thing

    Each can sell his/her portion

    don't have to be married

    not automatically ROS
  42. Tenants by the Entirety
    Only between married couples

    each own entire thing

    automatically ROS