Community Property

Question 1

Ceremonial Marriage

Answer 1

Requires a marriage license issued by the County Clerk to which you must prove your ID & age prior to issuing a license. However, problems in this process will not invalidate the license.
You should wait 72hrs from date of obtaining license before marriage, or else you get 30day period to annul the marriage.
Requires to have an authorized marriage official conduct the ceremony, but if not authorized as long as seemed to have authority, one party entered into in good faith, and no one is a minor or was committing a penal violation will be held as valid.
After marriage return the license to County Clerk within 30 days of Marriage Ceremony

Question 2

Presumption of Valid Marriage

Answer 2

Most recent marriage is presumed valid until shown otherwise.

Question 3

Common Law Marriage

Answer 3

Agreed to be married, and lived together in this state as husband and wife, and represented to others that they were married (holding out).
May prove this by having a declaration nd registration of informal marriage.
If suit to enforce/recognize marriage is not brought within 2 years of separation, then presumed that parties never had intent to be married.

Question 4

Putative Spouse

Answer 4

At lent one good faith/innocent party, and one party unable to marry due to some impediment.
Court tweets innocent spouse as if there was a marriage.

Question 5

Void v. Voidable

Answer 5

Void=no valid marriage ever existed

Voidable=valid until someone elects to invalidate it. Results in annulment, not divorce.

Question 6

Bigamy

Answer 6

Subsequent marriage while still in existing marriage.
Void marriage
Will become valid if the preexisting marriage is dissolved, and the subsequent marriage meets the CL Marriage elements.

Question 7

Incest

Answer 7

void

If related by blood to the third degree. Includes any relation created by law (adoption/steprealtion)

Question 8

Age

Answer 8

Void & Voidable

Minors not allowed to marry under any circumstances

Question 9

Capacity

Answer 9

Voidable
person lacks capacity to enter knowingly and willfully into marriage
Almost always win if:
(1) Realize that not make an informed decision
(2) stop cohabiting with each other

Question 10

Dissolution of Marriage (divorce)

Answer 10

May be granted for

(1) Insupporability
(2) Cruelty
(3) Adultery
(4) Conviction of a Felony: convicted of a felony, imprisoned for at least 1yr, and has not been pardoned
(5) Abandonment: left the complaining spouse with intent of abandonment, and has been gone for at least one year
(6) Living Apart: lived apart for at least 3yrs
(7) Confinement to mental Hospital: confined to hospital for 3yrs, and not likely to overcome mental disorder or is likely to relapse.

Question 11

Annulment

Answer 11

Must stop living together

(1) Alcohol/Drugs @ marriage
(2) Impotency
(3) Fraud, duress, Force
(4) meal Incapacity
(5) Concealed divorce w/in past 30 days (only voidable for 1yr)
(6) Married w/in 72hrs of License

If either party dies prior to voiding marriage, you can no longer challenge the marriage.

Question 12

Separate Property

Answer 12

Consists of:

(1) Property owned or claimed by the spouse before marriage
(2) the property acquired by the pose during marriage by gift, devise, or descent, and
(3) the recover y of personal injuries sustained by the spouse during marriage, expect any recover for loos of earning capacity during marriage.

Question 13

Community Property

Answer 13

Consists of property, other than separate property, acquired by either spouse during marriage

Question 14

Presumption of Community Property

Answer 14

Property possessed by either spouse during or on dissolution of marriage is presumed to be community property.

Question 15

Just & Right Division

Answer 15

Allows court to divide the estate in any way that it deems appropriate.
Factors:
(1) earning capacity
(2) fault of parties
(3) bad acts resulting in break up
(4) family violence
(5) infidelity
Interest of the spouses in the CP consists of a 1/2 undivided interest in the whole of the CP. Courts cannot divest a person of their SP, but they can give the other spouse the "use" of that SP.

Question 16

Quasi CP

Answer 16

Consists of property acquired in CL JX that would’ve been CP if purchased in CP JX, and property acquired by either spouse in exchange for real or personal property that would’ve been CP in CP JX (tracing principles apply).

Question 17

Inception of Title

Answer 17

Property gets is character at the time that the title is acquired
(1) When is property acquired? When legal right to property arises.

(2) What is character? meaning separate or community property

(3) Separate property can mutate
Ex: separate cash stock used to purchase house, house constitutes separate property
Ex: H deeds certain prop to W as sole and separate prop—as long as no fraud is involved, the deeded property is separate property

Question 18

Gift

Answer 18

Spouse cannot gift to the community, but 3rd party can.
Elements of Gift:
(1) Intent
(2) Delivery/Transfer of Property–> Must present some evidence of release of dominion and control
(3) Acceptance of Gift
(4) No Consideration
Presumption that property given to children from parents is a gift, so S.P., but if consideration is paid, then no presumption exists.
If item gifted has title for transfer, gift is not complete until title records have been updated/completed to evidence transfer of item.
Presumption that when one spouse signs deed with both spouses’ names it is a 1/2 gift to other spouse who doesn’t already own item.
Gifts between spouses are presumed to include all the income and property that may arise from that property, and the property itself to be SP.

Question 19

Partition

Answer 19

Spouses can gift to the other spouse whenever, and this will partition the CP between the spouses. However, they can't gift an interest to a third party, as this will become an involuntary partition. Therefore formalities must be followed for third parties:
(1) in writing
(2) signed by both parties.  
(3) enforceable without consideration. 
(4) Cannot be unconscionable
Unenforceable if:
(1) involuntary 

(2) unconscionable when signed and, before execution of the agreement, that party:
(i) was not provided a fair and reasonable disclosure of the property or financial obligations of the other party
(ii) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and
(iii) did not have, or reasonably could not have had, adequate knowledge of the property or financial obligations of the other party.

Agreement is void if creditor’s rights will be defrauded & can be recorded in county where spouse and property are located to serve as constructive notice to any good faith purchasers.

Question 20

CP Income

Answer 20

Income from SP = CP
Sale of stocks when that is the spouse’s primary business
Stock Dividends
Interest from investments & banking
Rents–incomes 34d party pays for use of SP
Oil & Gas lease delay rentals and working interest
Trust income IF beneficiary has present possessory right to corpus, whether taken or not
Increases from livestock
Royalties on Patents

Question 21

SP Profits

Answer 21

Increase in value from: (1) Stock splits, stock options; (2) Sale of stocks, unless its spouse’s primary business
Value of appreciation of real property due to market fluctuations
Most Oil & Gas Interests
Trust income IF beneficiary has no control over corpus

Question 22

Tracing–Community Out First

Answer 22

Presumption is that you will use community funds first to pay for necessary bills.
Ex.: 10k SP funds + 5k CP funds = 15k ; So if you spend 8k, court will presume that 8k was for the Community and the remaining 7k is Sep

Question 23

Tracing–Close in Time & Amount

Answer 23

A way to trace sale proceeds of separate property to a subsequent purchase. If the sale of X and subsequent purchase of Y happened in a close period of time and for a relatively similar amount, the court will presume that Spouse exchanged the form of his SP, even without strong records in evidence.
May be a good way to support oral testimony when banking records do not show the exact rendition of the transaction—but note there are no bright line rules

Question 24

Tracing–Averaging/Pro Rata Distribution

Answer 24

If you have Comm and Sep funds, the presumption is that you will pay an amount from each estate based on the size.

Question 25

Tracing–Minium Sum Balance

Answer 25

If you have 10k and you add 5k comm and start making withdrawals, but your balance never goes below 8k, then the 8k is presumed Sep bc it is more than the Comm and court may presume its Community out First. But if you go below the 8 one year, you cannot get reimbursed because again, community out first.

Question 26

Management and Control of SP

Answer 26

SP = Separate Management & Control (SMC)

Question 27

Management & Control of CP

Answer 27

CP (MC does not change classification of CP) = each spouse has SMC of the CP that he/she would have owned if single, including:

(i) Personal earnings
(ii) Revenue from SP
(iii) Recoveries for personal injuries; and
(iv) The increase and mutations of, the revenue from, all property subject to the spouse’s SMC

CP is split into:

(1) SMC of H
(2) SMC of W
(3) Joint MC

Property that is titled to one spouse raises the presumption that the property is under that spouse’s SMC

SMC can be sold, encumbered, or disposed of by that spouse w/out legal consent of other spouse. Important in the context of debts b/c the SMC of one spouse cannot be reached by the creditors of the non-managing spouse

Ex: House purchased off of only one spouse’s credit/income is still CP; presumption is that SMC of that spouse. Debt owed by either party is a debt to the entire community—so in this instance the community acquired a debt based off of the spouse whose crediting income was used to purchase the house

Question 28

Mixing of SMC

Answer 28

If H’s SMC prop is mixed with W’s SMC prop, then the mixed/combined CP is subject to JMC—unless spouses provide otherwise by power of attorney in writing or by other agreement (i.e. doesn’t have to be in writing)

Question 29

Presumption of JMC

Answer 29

Anything that is not specifically SMC is presumed to be JMCP and subject to disposition of both spouses meaning neither spouse can convey or encumber the property w/out express consent and participation of the other spouse

Property with title in both spouse’s names is considered to be JMC

JMC is within reach of creditors of both spouses

Question 30

Disposition of JMC CP

Answer 30

Step 1: is this SP or CP? If CP go to Step 2

Step 2: Is this JMC or SMC?

Rules: Presumption of CP and Presumption of JMC
Specific Rule: Neither spouse can be virtually represented by the other

Ex: W’s interest in the JMC of the CP was untouched by H’s K for sale. K stands as to H and res judicata, but not as to W.

Remember: there is a presumption of ½ undivided interest in CP

Question 31

Partition of JMC

Answer 31

JMC CP can only be partitioned, not exchanged with 3rd Party. A spouse may not convey his own ½ interest of CP to a 3rd party b/c that would effectuate an involuntary partition by creating a Tenancy In Common with the remaining spouse and the 3rd party.

JMCP cannot be transferred without intent and overt agreement of both spouses.

3rd party is entitled to rely on that spouse’s authority to deal with the property, as against the other spouse or anyone claiming from that spouse, if:

(1) the property is presumed to be SMC of that spouse; and
(2) the 3rd party is not a party to fraud on the other spouse and does not have actual or constructive notice of the spouse’s lack of authority

Question 32

Constructive Trust

Answer 32

equitable remedy; a fiduciary duty already exists and the buyer/actor is already bound to protect the other, so an equitable trust/trustee relationship arises

Elements:

(1) Actual fraud or breach of a special trust or fiduciary relationship (must be an expectation of the parties to act fairly)
(2) Unjust enrichment of the wrongdoer
(3) Tracing to identifiable res (res=thing/event/time

Note: there is no requirement to contribute to earnest money/down payment, as with resulting trust.

Question 33

Resulting Trust

Answer 33

very specific, legal remedy; the manner of the money/property/exchange creates a fiduciary relationship

Occurs when one person gives part of the purchase money, but the deed reflects only the other person. The purchase money has to be given at the time of the purchase, and clearly intended for that purpose. If a Resulting Trust arises then the person who is the named owner is acting as a trustee for the unnamed owner, and therefore a fiduciary relationship is created.

Question 34

Reimbursement

Answer 34

Arises when the funds or assets of one estate are used to benefit and enhance another estate w/out itself receiving reimbursement.

Rule: Time, toil, effort, knowledge that a spouse expends, which produces income, belongs to the community.

Reimbursement is an equitable remedy

Ex.:
Spouse B is entitled to its value in CP of Spouse A’s reasonable compensation for time, toil, effort in earnings.
If Spouse A’s compensation was reasonable and the community was already reimbursed, then no added reimbursement is due. But, if Spouse A was short changed, then Spouse B may have to reimburse the community (i.e. Spouse A would be entitled to ½ - remember each spouse has ½ undivided interest) for reasonable amount of time, toil, effort expended without return to the community.

Question 35

Authorized Reimbursement

Answer 35

Authorized Reimbursement for:

(1) payment by one marital estate of the unsecured liabilities of another marital estate;
(2) inadequate compensation for the time, toil, talent, and effort of a spouse by a business entity under the control and direction of that spouse;
(3) the reduction of the principal amount of a debt secured by a lien on property owned before marriage, to the extent the debt existed at the time of marriage
(4) the reduction of the principal amount of a debt secured by a lien on property received by spouse as a gift, devise, or descent during a marriage, to the extent the debt existed at the time the property was received;
(5) the reduction of the principal amount of that part of a debt, including a home equity loan:
(i) incurred during a marriage;
(ii) secured by a lien on property; and
(iii) incurred for the acquisition of, or for capital improvements to, property;
(6) the reduction of the principal amount of that part of a debt:
(i) incurred during a marriage;
(ii) secured by a lien on property owned by a spouse;
(iii) for which the creditor agreed to look for repayment solely to the separate marital estate of the spouse on whose property the lien attached; and
(iv) incurred for the acquisition of, or for capital improvements to, property;
(7) the refinancing of the principal amount described by Subdivisions (3)-(6), to the extent the refinancing reduces that principal amount in a manner described by the applicable subdivision;
(8) capital improvements to property other than by incurring debt; and
(9) the reduction by the community property estate of an unsecured debt incurred by the separate estate of one of the spouses.

Question 36

Expenses that cannot be reimbursed

Answer 36

(1) child support, alimony, or spousal maintenance
(2) the living expenses of a spouse or child of a spouse
(3) contributions of property of a nominal value
(4) the payment of a liability of a nominal amount, or
(5) a student loan owed by a spouse

Question 37

Offsetting

Answer 37

Offsetting allowed:

(1) Benefits for the use and enjoyment of property may be offset against a claim for reimbursement for expenditures to benefit a marital estate, except that the separate estate of a spouse may not claim an offset for use and enjoyment of a primary or secondary residence owned wholly or partly by the separate estate against contributions made by the community estate to the separate estate
(2) Reimbursement for funds expended by a marital estate for improvements to another marital estate shall be measured by the enhancement in value to the benefited marital estate.
(3) The party seeking an offset to a claim for reimbursement has the burden of proof with respect to the offset.

Question 38

Fraud

Answer 38

If the court determines that a spouse has committed actual or constructive fraud on the community, the court shall calculate the value depleted and divide the entire amount as it deems just and right by any legal or equitable relief necessary

Fraud on the community is the breach of the fiduciary duty that a spouse has towards the other spouse. It usually involves the expending of community assets on a third party without the consent of the other spouse.

The trial court can arrive at its own estimate of the amount wrongfully spent, and rely on that to make a just and fair division. (i.e. court can assume that the amount defrauded is still there and make a just & right division). 3rd parties can be held responsible for participating in fraud on the community

Question 39

Pre-martial Agreements

Answer 39

“Premarital agreement” means an agreement between prospective spouses made in contemplation of marriage and to be effective on marriage.

Requirements:

(1) Must be in writing
(2) Signed by both parties
(3) Enforceable without consideration
(4) Cannot be unconscionable

Content:

(1) Full disclosure of what prop is owned and the rights and responsibilities that go along with that property
(2) List what prop is SP and what prop is CP along with the value
(3) Right to buy/sell/use/transfer/exchange/dispose/encumber/otherwise manage and control, etc.
(4) Exception: right to child support may not be adversely affected

Can be amended/revoked after marriage only by written agreement signed by the parties, and is enforceable w/out consideration.

Agreement is not enforceable if:

(1) Involuntary
(2) Unconscionable when signed, and before signing, the party was not provided:
(i) a fair and reasonable disclosure of the property or financial obligations of the other party;
(ii) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided;  and
(iii) did not have, or reasonably could not have had, adequate knowledge of the property or financial obligations of the other party.

Question 40

Post-Marital Agreement

Answer 40

Spouses can agree at any time that the income or prop arising from SP (existing or may be acquired) shall be the SP of the owner, or that the income arising from only certain pieces of SP will be SP of the owner.

Parties can agree to convert all or part of SP into CP; Req.:

(1) must be in writing and
(2) be signed by the spouses;
(3) identify the property being converted; and
(4) specify that the property is being converted to the spouses’ community property;
(5) enforceable without consideration

Conversion of SP to CP does not affect the rights of a preexisting creditor of the spouse whose SP is being converted. May be recorded in county in which spouse resides and prop is located and if so, it serves as constructive notice to good faith purchaser for value of creditor w/out actual notice only if agreement recorded
.

Question 41

Agreement Incident to Divorce or Annulment

Answer 41

(1) spouses may enter into a written agreement concerning the division of property and the liabilities of the spouses and maintenance of either spouse.
(2) Repudiation is allowed at any time before rendition of divorce or annulment—unless the agreement is binding under another rule of law.
(3) If Crt finds that the terms of the written agreement are just & right, those terms are binding on the court.
(4) If Crt finds that the terms are not just & right, it can request the spouses to submit a revised agreement or may set the case for a contested hearing

Question 42

Oil & Gas

Answer 42

Oil and gas in place (in the ground) when produced from SP, remains SP and part of the corpus of SP. Therefore, any royalties on such SP oil and gas are also SP, as it is payment for extraction and waste of the separate estate.

Time, Toil, & Talent argument in managing well does not entitle other spouse to community interest, it just entitles the other spouse to a reimbursement. But remember that this requires expending extraordinary time to manage SP estate. And reasonable control and management is necessary to preserve the SP estate and put it to productive use.

Increase in value also remains SP. When you sell oil (underground) it is the same as selling a part of the land

Question 43

Delayed Lease of Oil & Gas

Answer 43

When someone has a lease that allows them to extract, they are paying for oil & gas. If production stops, they continue to pay rent to extract in the future. So they have a Right to possess land–not a right to oil & gas, but can extract. Right to possess land = CP–>delayed rental proceeds = CP

Question 44

Trusts

Answer 44

Key Consideration: Whether or not the trust beneficiary has absolute right to the corpus of the trust?

(1) Yes? Income earned during marriage=CP
(2) No? Income earned during marriage=SP

Question 45

Irrevocable Trust

Answer 45

Cannot be terminated or modified w/out express permission of the beneficiaries. Grantor removes assets from grantor’s estate and uses it to fund the trust, gives up all rights and ownership to the assets of the corpus.

Question 46

Revocable Trust

Answer 46

Permits grantor to maintain control during lifetime and avoids probate upon death. Grantor can alter terms of trust at any time, can even completely cancel.

Question 47

Testamentary Trust

Answer 47

Created upon grantor’s death according to terms of a will.

Question 48

Spendthrift Trust

Answer 48

Beneficiary has no control over the corpus. All investment decisions are made by a trustee, trust is protected from financially incapable beneficiary, protected from beneficiaries creditors.

Question 49

Corporations

Answer 49

Begins with certification of incorporation.

Question 50

Corporations Created Prior to Marriage

Answer 50

Reimbursement theory is that the community will be reimbursed for the value of time and effort expended by either or both spouses to enhance the separate estate of either, other than that reasonably necessary to manage and preserve the separate estate–[less]–the remuneration received for that time and effort (salary, bonus, dividends, etc.) which become CP when received. Therefore, any increase in the value of the corporations (such as that of stock) can be reimbursed due to the time and effort sent on that enhancement, but will have to be offset for any compensation received (salary, dividends, etc.)

Question 51

Corporations Created After Marriage

Answer 51

When CP & SP are used to fund corporation, nature of cooperation is based in proportion of contribution.

Income from the corporation is is CP. If corporation is CP, court cannot give non-member spouse any assets (i.e. car) owned by the corporation, but can give stock in corporation to non-member spouse. But if corporation is SP, non-member spouse cannot get anything.

Corporate earnings in SP corporate stock remained corporate prop until distributed and therefore were not divisible on divorce.

Question 52

Corporation Dividends

Answer 52

Increases in SP stock’s value through normal appreciation and market forces remain SP. Stock dividends retain character of the underlying stock.

Cash dividendsincome=CP
Dividends in property=CP
Stock dividends=mutations=SP
Cash dividends upon dissolution=mutation, not income=SP

Question 53

Alter-Ego

Answer 53

Where owner is ignoring fact of corporation and treating as sole proprietorship, why should anyone else regard as a corporation?

If you can prove alter-ego, you can disregard the entity and the “corp” prop is subject to division

Requirements:

(1) Corporate formalities disregarded (no separate accounts, non-compliance with formalities, etc.) and corporate prop and shareholder prop so intermingled that they are inseparable b/c all prop is treated exactly the same [such unity between corporation and individual that the separateness of the corporation has ceased, and]
(2) Having done something that has harmed the community and there is no way to figure out reimbursement. [finding that holding only the corporation liable would result in injustice]

When/Why to pierce: Where it appears that the individuals are using the corporate entity as a sham to perpetrate a fraud, to avoid personal liability avoid the effect of a statute, or in a few other exceptional situations.

Applies when there is such unity between the corporation and individual that the separateness of the corporation has ceased and holding only the corporation liable would result in injustice. It is shown from the total dealings of the corporation and the individual, including the degree to which corporate formalities have been followed and the corporate and individual prop have been kept separately, the amt of financial interest, ownership and control the individual maintains over the corporation, and whether the corporation has been used for personal purposes.

Remedy – Piercing corporate veiltreat corporate assets as subject to SP/CP division

Question 54

Partnerships

Answer 54

Income flows to the partners. Not a corporation but treated like a corporation.

Separate entity, so anything it owns are partnership assets rather than SP v CPOnly thing a partnership subject to characterization CP or SP is the interest itself; that is, the partner’s right to share in the profits and income. Distributions are CP during marriage.

Partners own an interest in the partnership, not assets. The only partnership property right the partner has which is subject to a community or separate property characterization is his interest in the partnership, that is his right to receive his share of the partnership profits and surplus. Distributions of the partner’s share of profits and surplus (income) received during marriage are CP even if the partner’s interest in the partnership is SP. (read: why? Bc income from SP = CP)

Question 55

Effect of Death or Divorce on Partnership Interest

Answer 55

(1) on the divorce of a partner, the partner’s spouse, to the extent of the spouse’s partnership interest, if any, is a transferee of the partnership interest;

This does not impair an agreement for the purchase or sale of a partnership interest at any time, including on the death or divorce of an owner of the partnership interest.

Question 56

Sole Proprietorships

Answer 56

Future income, post-dissolution of marriage, is SP.

Rule–>CP consists of the prop, other than SP, acquired by either spouse during marriage.

Analysis–>Here, income though the sole proprietorship business after divorce is not prop acquired during marriage, regardless of inception. Therefore, it is not CP and other spouse has no interest in it. All prop for business (chairs, equipment, etc) acquired/raised/arising during the marriage were CP. However, pre-marital or post-dissolution acquisitions are SP.

Question 57

Retirement

Answer 57

Defined Benefit Plan (pension plan)–established based on length of service
Required vesting event, usually specified length of service (E.g. military)
Once vested, it is the employee’s property, subject to certain restrictions
More secure, but less return

Defined Contribution Plan–contributions made by employee and/or employer on a pre-tax basis
Investments available often include company stock and mutual funds (E.g. 401K)
Each employee has a sub-account of the plan in their own name. employee receives regular statements, so always knows value of account
All contributions made by the employee are immediately vested, but employer contributions may be available only according to a pre-established vesting schedule

Question 58

Vesting of Retirements

Answer 58

Employee spouse–>vesting will be established by the employer and requires that the employee be employed for a specified period of time to earn 100% benefit rights

Non-Employee spouse–> vesting is either date of marriage or the employed spouse’s vesting date

Time vested determines division, or apportionment, of the benefit due to each spouse

In Texas, only retirement benefits are apportioned in this manner

Upon divorce, retirement benefits are awarded at present value, rather than future value because additional contributions made by the employee spouse after divorce are SP

If Fed gov was/is employed spouse’s employer, or has statutorily created the retirement plan—fed law preempts state CP law. Here, retirement or disability benefits are either SP or subj to federal division rules.

Question 59

Calculation of CP for Defined Benefit Plan

Answer 59

Divorce after retirement: CP Value= (# of months married under plan)/(# of months employed under plan)× $$$ at retirement

Divorce before retirement: CP Value= (# of months married under plan)/(# of months employed under plan)× $$$ at divorce

Question 60

Calculation of CP for Defined Contribution Plan

Answer 60

CP Value= Balance of Acct. at Divorce-Balance of Acct. at Marriage

Question 61

Future Earnings

Answer 61

must be a definite right during marriage to create income stream (or part of) after marriage.

Once divorce is entered and final, income earned by spouse is SP. But if there is something in the work of Spouse A during the marriage that created a right to an income stream in the future, then such income is CP. Income Stream is CP as long as the right is clear and identifiable.

Income earned by toil or under K during marriage, but not received until after marriage is CP. CP if (1) all work is done and (2) there is a legal obligation for 3rd party to pay. I

Rule–>A spouse is not entitled to a percentage of other spouse’s future earnings. A spouse is only entitled to a division of property that the community owns at the time of divorce.

Question 62

Copyright

Answer 62

Applies to: reproduction, adaptation, publication, performance, display
Lasts the life time of the author plus 70 years after the death of the author

3 separate bundle of ownership rights

(1) usus – right to use or possess (i.e. hold, occupy, and utilize the prop)copyright holder
(2) abusus – right to abuse or alienate (i.e. transfer, leave, encumber property)copyright holder
(3) fructus – right to the fruits (i.e. to receive and enjoy the earnings/profits/rents/revenues produced by or derived from the prop)community

The Copyright Act grants exclusive right to the authors to: (1) reproduce, (2) prepare derivative works, (3) distribute copies, (4) perform, and (5) display the work.

No express exclusive right to enjoy earnings/profits

The author spouse has exclusive management of copyright created during the existence of the community, and the non-author spouse is entitled to ½ of the economic benefits of the copyright. This includes cars, paychecks, partnership interests, and copyrights

Copyright obtained during marriage is divisible on divorce. Each spouse has ½ undivided interest in the copyright. The non-author spouse is only entitled to income from the copyright=income stream.

Upon remarriage, the ½ income from “blue dog” is CP and 2nd W/H can spend income stream as well, but 2nd W/H would not own income stream so upon divorce, she gets nothing since she didn’t partake in underlying copyright, that income stream remains with the original author marriage.

Question 63

Patent

Answer 63

Patent grants the inventor a property right – “the right to exclude others from making, using, offering for sale, or selling” the invention in the US or “importing” the invention into the US.

3 types of patents:

(1) Utility patents – may be granted to anyone who invents or discovers any new and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof. Usually expires after 20 yrs from date of earliest non-provisional application.
(2) Design patents – may be granted to anyone who invents a new, original and ornamental design for an article of manufacture. Usually expires 14 yrs from date of issue if filed before 5-13-15; 15 yrs from date of issue if filed on or after 5-13-15.
(3) Plant patents – may be granted to anyone who invents or discovers and asexually reproduces any distinct and new variety of plant. Usually expires after 20 yrs from date of earliest non-provisional application.

Lengths of patents–>terms vary by what law was in effect at time patent was issued, and by whether the patent was a utility patent, plant patent, or design patent.

Spouse is entitled to an interest during marriage in the revenue stream from intellectual property that was created by the other spouse before marriage. Income receive during marriage from SP patent is CP. Patents taken out during marriage and the income generated from the patents are CP.

Note inception of title rule to patent rights may occur: (1) when the concept is sufficiently developed to generate a plan to build the invention, (2) when the invention is actually built, or (3) on the effective date of the patent.

Question 64

Debts

Answer 64

There is a duty to support the other spouse; spouse who fails to support is liable to any person who provides necessaries to the spouse whom support is owed.

Doctrine of Necessaries: Spouse A is liable to 3rd parties for Spouse B’s necessary expenses, whether Spouse A overtly accepted such liability or not.  Necessaries include items common to one’s station in life.

Presumption: debt belongs to the entire community
Issue: Did Spouse A benefit from Spouse B’s debt? (this is how you tell what is SMC if there is a JMC presumption which there usually is)
If Yes–>Spouse A’s SMC of CP can be attached
If No–>Spouse A must rebut JMC presumption by showing no benefit to their SMC CP

Question 65

Debt Joint Liabilities

Answer 65

Both H & W SP and CP assets are liable for the liabilities/debts.

Question 66

Debt on SP Debt

Answer 66

Only SP assets are liable for debt

Question 67

Non-Tort Debt During Marriage

Answer 67

SMC CP may be held liable if JMC presumption is not rebutted by tracing principles to show SMC.

JMC CP, SMC CP & SP are all liable.

Question 68

Tort Debts During Marriage

Answer 68

CP & W’s SP are all liable

Question 69

Personal Injury & Disabilities

Answer 69

PI & Disabilities that occur prior to marriage are SP, even if payment on judgment not made until after marriage.

Presumption that when a spouse receives a settlement from a lawsuit during marriage – some of which could be SP and some of which could be CP – that it is all CP. The spouse claiming SP has the burden to demonstrate which portion of the settlement is SP by clear and convincing evidence. Once rebutted by prima facie evidence that the prop is SP, the spouse claiming CP must rebut the new presumption that the property is now SP.

PI SP: SP damages include disfigurement and physical pain and suffering in the past and in the future, mental pain and anguish.
PI CP: CP damages include recovery for loss of earning capacity during marriage, medical expenses incurred during marriage, and for other expenses associated with injury to the community estate.

Note that compensation for period after divorce/dissolution of marriage is not CP even though the injury may have occurred when the parties were married.

Question 70

Crops

Answer 70

Crops grown and harvested from land are CP since the law presumes that Spouses’ skill or care contributed to its production or that they in some way contributed to the common acquisitions (TTT rule-> joint efforts of H and W are CP).

Test –> whatever is acquired by the joint efforts of H&W is CP (TTT rule).

Presumption that whatever is acquired, except by gift/devise/descent/exchange of one kind of property for another kind, is acquired by their mutual industry.

Term “increase in land” means SP that itself grows remains SP (SP increase in value remains SP). However, crop grown on SP is CP because joint effort to grow the crop during marriage.

So if there is no increase in value=no increase in SP
Crops = joint venture of H&W=CP
Because joint efforts are required to grow crops, crops are CP regardless of whether the land on which it is grown is SP or CP.

Crops produced by annual cultivation, either growing or mature, or cultivated, are distinct in nature from the land on which they are grown. Whether growing or mature, or cultivated, crops may be segregated from the land by overt act of the owner.
Exception - sale of land->crop is sold with the land & considered part of the land. If land was SP owner sells it, all proceeds will be SP including proceeds from the crops.

Timber treated as a crop, but when crops, including timber, are sold as part of the land, then increase of land value as a result of the crops are treated as SP.

Question 71

Livestock

Answer 71

All livestock at time of death or divorce is considered CP regardless of whether the herd began as SP. Exception – proof can be provided that a particular animal was alive prior to the marriage, that particular animal then remains SP.

Bankrupt Texans may keep:

(1) 2 horses, mules, or donkeys and a saddle, blanket, and bridle for each
(2) 12 head of cattle
(3) 60 head of other types of livestock
(4) 120 fowl
(5) Pets

Offspring of SP livestock is CP. But, CP born after judgment writ are not attachable as CP, because they did not exist at time of judgment.
Calves in utero - not a chattel, lien on the Mother does not extend to offspring she is carrying.

Question 72

Homestead

Answer 72

Rights are divided by the kind of prop that it is:
Rural – up to 200 acres for family (which may be in 1+ parcels), up to 100 acres for single adult
Urban – limited to 10 acres (may be in 1+ contiguous lots) w/in municipality or extraterritorial jurisdiction or platted subdivision, and served by police protection, paid or volunteer fire protection and must include at least 3 of the following services provided by a municipality or under K to a municipality:
(1) Electric
(2) Natural gas
(3) Sewer
(4) Storm sewer
(5) Water

Any possessory interest in a lot or lots, including leasehold, coupled with the requisite occupancy, is sufficient to support a homestead claim. So a mobile home on a month to month lease suffices. Ownership is not required to form a homestead.

Question 73

Power to Transfer Homestead

Answer 73

If it’s homestead, then it doesn’t matter the management classification or if it’s separate property. You can’t do anything to take away or limit the homestead rights of the other spouse.

If it happens that one of the spouses has disappeared without any idea of where they are, then you can go ahead and sell it without the joinder of the other party. If they are permanently disabled, and that can be proved up, then you don’t need the joinder of spouse.

Can’t avoid paying IRS under Homestead

Question 74

Homestead upon Divorce

Answer 74

When homestead is split between H and W at divorce, the just and right division extends to an order to (1) allow children to live in house until youngest child turns 18 and (2) subsequent sale of house and division of proceeds. W had an undivided interest in the house and a present right to possession in entirety of the house whereas H only had an undivided interest in the house – but not a present right to possession of the house. So when youngest child turns 18, then the parties could sell house and divide proceeds as proportionate to their award amount. Creditors could take what H owed then, W would get the balance.

H and W not TIC because co-tenancy is formed when 2+ persons share unity of exclusive use and possession in property held in common. Present right to possession of the prop is essential because one who is never entitled to possession of prop held in common is not a cotenant. So H and W not TIC until youngest child turned 18 (since prior to that time W was given exclusive right to use and possession).

Homestead of a single adult or family is protected from forced sale for payment of private debt unless the debt is for purchase money on the homestead, for work and materials used to construct improvements on the homestead property, or for unpaid taxes.

If Spouse violates court order, wife may lose right to possession and use of entire homestead. Non-possessory spouse has homestead right suspended during this time. When possessory spouse violates court order, both spouses obtain present possessory right as TIC, and both are entitled to a homestead exemption as far as their tenancy in common goes.

Question 75

Debt/Creditors & Homestead

Answer 75

Court has the right to set aside property for use of W and children until a certain time period. So creditor can take H’s title, but W stays until her possessory right terminates because of her homestead.

(1) Ex-spouse A may own property in fee single although ex-spouse B has full, possessory homestead rights in the property. (2) Neither spouse alone can renew debt against the homestead, extend time of payment, or in any way change the debt after the homestead right has been perfected. (3) Possessory ex-spouse is necessary party to foreclosure proceeding of mechanic’s lien on homestead.

Question 76

Death of Spouse

Answer 76

The surviving spouse has continuing homestead right in coupe’s homestead

Question 77

Sale, Conveyance, Encumbrance of Homestead

Answer 77

neither spouse may sell, convey, or encumber homestead w/out joinder of the other spouse (except as provided by other rules) no matter if the homestead is SP of one spouse or CP of both.

Except that:
Sale of Separate Homestead After Spouse Judicially Declared Incapacitated – spouse who owns as SP may do so w/out joinder of other spouse
Sale of Community Homestead After Spouse Judicially Declared Incapacitated – competent spouse may do so w/out joinder of other spouse

Question 78

Sale of Separate/Community Homestead Under Unusual Circumstances

Answer 78

If homestead is SP of one spouse, he may file a sworn petition w/description of the property, facts that make it desirable for sale/conveyance/encumbrance w/out joinder of the other spouse, and allege the other spouse has:

(1) Disappeared and their location remains unknown to petitioning spouse
(2) Permanently abandoned the homestead and petitioning spouse
(3) Has permanently abandoned the homestead and the spouses are permanently separated, or
(4) Been reported by an executive dep’t of the US to be a prisoner of war or missing on public service of the US