TX Community Property

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What is separate property?: 1) Owned or claimed by spouse before marriage

2) Acquired during marriage by gift, devise or descent

3) Recovery for personal injuries during marriage EXCEPT medical expenses and loss of earning capacity
How can you partition community property into separate property?: By written agreement signed by BOTH parties.

Can agre to partition both existing CP and FUTURE CP
What is the SP tracing principle?: Property bought w/ SP is SP
How is SP status affected by moving from one state to another?: Determined under laws of the state domiciled at the time asset acquired, and does NOT change.
What is Quasi-community property?: Property acquired in another state that would have been CP if domiciled TX is treated the same as CP for purposes of division on divorce.
What is the burden of proof for separate property?: On the party contending that an asset is SP, and must be established by clear and convincing evidence.
Installment purchases before marriage -- SP or CP?: SP - remember BEGUN before marriage and completed after marriage
Assets acquired on credit during marriage -- SP or CP?: CP UNLESS:

1) lender agrees to look solely to the separate estate of the borrowing spouse

OR

2) a spouse purchases teh asset using borrowed funds w/ the intenttion of immediately paying the debt w/ proceeds from the sale of separate property.
When is a claim for economic contribution allowed?\: When expenditure of CF to reduce or discharge SECURED DEBT on on'es SP, or to make CAPITAL IMPROVEMENTS on SP, the community estate may claim for economic contribution that matures on termination of the marriage.

THIS IS NOT AN OWNERSHIP INTEREST

Economic Contribution MAY BE waived under a premarital or marital property agreement
How does the court secure a claim for economic contribution?: If ends by divorce: By imposing an equitable lien on property of the benefited estate

If ends by death: equitable lien imposed ONLY IF the surviving spouse, personal rep of the deceased spouse, or any other interested person applies for the lien.
In what situations is the court NOT allowed to recognize a claim for reimbursement?: 1) payment of child support, alimony or spousal maintenance

2) living expenses of a spouse or child

3) contributions of property of nominal value

4) payment of a liability of a nominal amt

5) payment of student loan owed by a spouse
How is adverse possession begun before marriage and completed during marriage treated?: If entered under a "rightful" claim before marriage, then SP

If entered as a "naked trespasser" then CP
What are the req for converting SP into CP?: Agreement

0) MADE DURING MARRIAGE w/ RESPECT TO EXISTING PROPERTY

1) in writing
2) signed by both spouses
3) specifying the preopty being converted
What is a CP survivorship agreement?: WRITING, SIGNED BY BOTH spouses that all or party of CP becomes the property of the surviving spouse on the death of a spouse. MUST contain survivorship language.

Can be revoked by written notice to other spouse
How can a surviving spouse apply to the court for an order stating that a survivorship agreement is valid in order to use as evidence of teh spouse's ownership rights?: A hearing is held and the deceased spouse's signature on the agreement is proved by one witness. Venue is in the county of the deceased spouse's residence.
What is a personal rep of deceased spouse's liability for sales and distributions w/o knowledge of a survivorship agreement?: No liability for selling, distributing or otherwise disposing of the property subject to the agreement.
What is liability of a person who purchses property from the personal rep w/o notice of the surviorship agreement?: He takes good title as against the surviving spouse
What is the 6-month rule regarding survivorship agreements?: A party who without notice of the suvivorship agreement, purchases property from a person claiing from a decedent (eg somebody other than decedent's personal rep) more than 6 months after decedent's death takes good as against the surviving spouse.
What is the 6 month rule as to 3rd parties w/o notice of REVOCATION of a survivorship agreement?: 3rd party who more than 6 months after decedent's death, purchases property from the surviving spouse in reliance on survivorship agreement and no notice of revocation of the agreement takes good title as against decedent's successors.
What is the liability towards surviving spouse of people who owe money to the decedent who had no actual knowledge of a surivorship agreement?: They are protected from claims by the surviving spouse if he pays or transfers property to the decedent's personal rep or (if no administration pending) to decedent's heirs or legatees.
Can a premarital agreement provide that after marriage a spouse's SP will become CP?: NO!!! Can only do this with a conversion agreement DURING MARRIAGE!
What makes a premarital agreement/marital agreement unenforceable?: Unconscionable or involuntary agreement:

1) No fair disclosure of property or other obligations of the other party

2) Right to disclosure not wiaved in writing

AND

3) no adequate knowledge of the property or finanical obligations of the other party

This is an issue of LAW, NOT fact for jury

Unfairness short of unconscionability does NOT make the agreement unenforceable.
When is a partition or exchange agreement void as to creditors?: When it is made w/ the intent to defraud preexisting creditors
When does an agreement as to real property give notice to BFP and creditors?: When the agreement is recorded in the county in which the land is located.
During marriage, what is income from SP?: CP
If land is SP, how are oil and gas interests divided?: 1) bonus is SP,

2) royalty is SP,

3) delay rentals are CP
How are corporate distributions regarding SP stocks divided?: Cash dividends are CP

All other distributions (stock splits, stock dividends, stock options) are SP.

Capital gains are SP.
How is royalty income of SP patents split?: It is CP b/c it is the fruit of the SP
Is income from an interspousal gift of property CP or SP?: SP
Income from SP produced by partition or exchange of CP. CP or SP?: SP
If tort award does not specify what portion is for medical expenses and loss of earning capacity, how do you calculate?: Entire amount will be CP.

For punitive damages, law is unclear, but prob should be in proportion to underyling award for actual damages.
How do you classify life insurance policies?: If taken out before marriage, then SP and proceeds are SP, subject to community claim for reimbursement for premiums paid out of the community funds

Policy taken out after marriage in a common law state is SP (inception of title rule)
What should you consider when disability, pension or other retirement benefits are at issue in a bar exam question?: Whether federal law preempts TX community property law.

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