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116 Cards in this Set
- Front
- Back
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What is separate property? 5
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- property owned or claimed by either spouse before marriage
- property acquired during marriage by gift, will or inheritance - Can be produced by a written partition or exchange of CP - tracing principle: property purchased w/ separate funds is separate - tort recovery for personal injury |
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SP must be established by:
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clear and convincing evidence
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What kind of tort recovery is not SP? 2
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- recovery for earnings/lost wages
- medical expenses to the extent the community incurred the obligation |
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Community property
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property, other than SP, acquired by either spouse during the marriage
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examples of CP 2
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- salary and wages of either spouse
- income from community assets |
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Income from SP is CP unless: 2
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- spouse's agree in writing that such income shall be spouse's SP
- Income from gift from one spouse to the other spouse |
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H gave W 100 shares before marriage. Once married, the income (dividends) from that stock is:
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CP
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H gave W 100 shares while married. Income (dividends) from that stock is:
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W's SP
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Community presumption
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property possessed by either spouse on dissolution of a marriage is presumed to be CP
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Community credit
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all assets acquired on credit during the marriage are presumptively acquired on community credit
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Who bears the burden of proving an asset is SP and what is the burden?
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On the party so contending
clear and convincing evidence |
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What if a tort recovery does not distinguish between damages which would be SP and CP?
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Absent evidence that proves the separate nature of a portion, it's community
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inception of title rule
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character of an asset as SP or CP is determined at the time the asset is acquired
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Do payments of the remaining purchase price with community funds of an asset acquired before marriage affect the asset's characterization?
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Never, but they can create a claim for reimbursement
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two cases in which inception of title rule does not apply bc they are considered part of a spouse's earnings
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- employee retirement benefits
- stock options |
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What can the community do if community funds are expended to reduce secured debt or make capital improvements on SP?
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has a claim for reimbursement
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How is the community divided upon death of one spouse?
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50/50
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How is the community divided if the marriage is dissolved by divorce?
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just & right division (trial court's discretion)
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How is reimbursement for funds expended by the marital estate for improvements to another marital estate measured?
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by the enhancement in value to the benefited marital estate
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Can a claim for reimbursement be offset by benefits for use and enjoyment of the property?
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Yes, so long as the property is not a primary or secondary residence.
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Does a reimbursement claim yield an ownership in the benefited property?
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No
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So how is a reimbursement claim secured upon dissolution of the marriage or upon death?
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the court can place an equitable lien on the property
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By statute, reimbursement is not allowed for: 5
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- payment of child support, alimony, or spousal maintenance
- living expenses of a spouse or child of a spouse - contributions of property if a nominal value - payment of a liability of a nominal amount - student loan owed by a spouse |
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Is there an equitable claim for reimbursement when CP funds are expanded for the benefit of CP?
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No, a reimbursement claim must exist between marital estates.
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If title is in one spouse's name in a common law state and the couple then moves to Texas, is it CP or SP after the move?
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still SP
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How is SP brought from another state treated upon death?
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still SP
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How is SP brought from another state treated upon dissolution of marriage in Texas?
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quasi-CP subject to just and right equitable division
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Does Texas have an elective share statute or recognize tenancy by entireties?
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No, surviving spouse always takes 1/2 CP on death of spouse
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Community credit presumption
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property acquired on credit during marriage is presumed community as is the credit
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What must be shown to overcome the presumption of community credit?
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creditor agrees to look solely to the separate credit of the borrowing spouse
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H buys house with proceeds from H's SP, H signs note, deed names H as grantee. How should the home be characterized?
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CP
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Does how title is held affect characterization of property?
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no
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Does separate security or separate collateral overcome the community presumption?
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no
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Exception to inception of title rule
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a spouse can use SP and take title in other spouse's name and make it a gift to other spouse's SP
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Can a spouse offer testimony to contradict a deed?
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As long as the spouse participates in the transaction (absent fraud or mistake), the parol evidence rule will bar such testimony.
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When does property acquired by AP become SP?
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when one enters under a rightful claim
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when does property acquired by AP become CP?
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When it is acquired by a naked trespasser and has no rightful claim
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What determines the SP or CP character of life insurance policy?
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the first premium payment
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When does a surviving spouse have an equitable claim for reimbursement of CP expended on insurance premiums paid to a third party?
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when the policy is SP, not when it is CP
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Characterization of employee retirement benefits accumulated during marriage
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CP, whether or not vested at time of divorce
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How do you divide up retirement benefits that were accrued before and during marriage
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years married & employed
______________________ total year employed |
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What two ways can a divorce decree entitle a spouse to retirement benefits that the other spouse is not yet eligible for?
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- "if, as, and when received" language entitles spouse to benefits at a later date
- cash out - award other assets of equal value and leave entire pension plan with spouse |
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When does a non-participating spouse in a retirement plan have an interest in it? When do they not?
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Upon divorce
If they predecease the participating spouse |
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What would be the CP to come from a defined contribution plan? 2
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- additional contributions to the account during marriage
- interest and dividend income on the account |
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do spouses of military personnel have CP rights in a military retirement plan?
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Yes
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Is military disability retirement pay CP?
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No
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To what extent is any disability insurance payment or worker's comp payment CP?
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if it is intended to replace lost earnings while married
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To what extent is any disability insurance payment or worker's comp payment SP?
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if it is intended to replace lost earnings while not married
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How are stock options characterized for purposes of division on divorce?
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pro rata
years from date options awarded to date of divorce _______________________ years from date option awarded to date option was exercisable |
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What is the community entitled to in claim for reimbursement against H's business interest?
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Value of time, toil, and talent expended by H to enhance SP beyond that reasonable to maintain SP less remuneration received for time and effort in the form of salary.
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Formula for reimbursement against H's business interest
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Value of time/toil/talent (beyond what's necessary to preserve SP) minus actual compensation received
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Commingled bank accounts
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community is drawn out first
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Can a divorce court divest SP of one spouse and award it to the other spouse?
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No, this is not allowed under the Texas constitution.
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What is the only power a court has over one spouse's SP?
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can be set aside for support of minor children of the marriage
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Factors an appellate court can consider in determining whether a particular division of CP was an abuse of discretion by a trial court 16
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- age
- abilities - education - size of the community estate - size of each party's SP - relative physical condition of the parties - earning power and business opps - needs for future support - length of the marriage - children of the marriage - child care responsibilities - fault in the breakup of the marriage - benefits innocent spouse would have received from continuation of the marriage - reimbursement - tax considerations for specific assets - community liabilities |
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Division of CP by a trial court will only be reversed if:
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division is so disproportionate as to be manifestly unjust and an abuse of discretion
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When is the only time a trial court's division of property will be automatically reversed?
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when there has been a divestiture of SP
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Can the court take fault into account in a no-fault divorce?
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SC has yet to rule on it
Tx App. said no |
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Can an appellate court direct a different division of property than the trial court?
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no, must reverse and remand
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Can later discovered CP not partitioned at divorce be subject to a just and right division action in a separate proceeding?
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yes
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what is the SoL for later discovered CP?
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two years after the on in control repudiates the claim of CP, not two years after divorce
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What is necessary for on to be eligible for spousal support 3
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a) spouse seeking maintenance will lack sufficient property (including their SP) to provide for min. reasonable needs, and
1)spouse from whom maintenance is requests was convicted or received deferred adjudication for an offense constituting family violence, or 2) spouse seeking maintenance: i) is unable to earn sufficiently bc of disability ii)has been married 10+ years and lacks ability to earn sufficiently, or iii) is custodian of child of the marriage who requires substantial care bc of disability |
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Max spousal support award
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lesser of 5K/month or 20% of spouse's avg monthly gross income
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duration of maintenance order for marriage less than 10 years based on family violence
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5 years
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duration of maintenance order for marriage 10-20 years
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5 years
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duration of maintenance order for marriage 20-30 years
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7
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duration of maintenance order for marriage 30+ years
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10
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exceptions to durational limits of maintenance support 2
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- spouse is incapacitated bc of mental or physical disability
- custodian of disable child |
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modification of spousal maintenance
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can be modified only downward on showing that circumstances of either party have materially and substantially changed
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Three things "like" alimony in Texas
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- temporary support - support payments prior to decree
- contractual alimony - periodic payments if referable to property not easily divided |
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When might periodic payments be the best option?
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If H and W owned a closely held corp as CP and it was managed by just W. Granting half to H would not be fair to W
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H has SP life insurance. He marries W and makes her beneficiary with X being the alternate beneficiary. H and W divorce, W will be treated as having predeceased H and will no longer be the beneficiary unless: 3
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- H renames W as beneficiary after divorce
- divorce decree names W as beneficiary, or - W is designated to receive the proceeds in trust on behalf of a child or dependent of either former spouse |
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Does the "divorce revokes" policy apply if the plan is one governed by ERISA?
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no
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H takes out insurance policy as CP. W is beneficiary and X is alternate beneficiary. The parties divorce and no mention of the policy is in the decree. What happens when H dies?
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W and X split evenly
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Can good will be divided upon divorce?
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not unless it is separate and apart from a person; it must have commercial value
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If a court awards W contribution to H's degree obtained during marriage, is that proper?
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No, a professional degree is not something that can be divided.
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Can the spouse who supported another spouse while they received an education file a valid claim for reimbursement?
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no
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H leaves W and marries X where X has no knowledge of W. H and X acquire 200K from H's salary? Who gets what?
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X is a putative spouse and this is a putative marriage so X gets 1/2 and H and W have 1/2
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H leaves W and marries X where X has knowledge of W. H and X acquire 200K from H's salary? Who gets what?
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H and x's relationship is meritricious so X gets nothing and H and W have 200K CP
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H leaves W and marries X where X has knowledge of W. W dies. What happens?
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all future acquisitions of H and X would be CP
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What is the income from SP?
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CP
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Can the parties agree that income from SP shall be SP?
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Yes, in writing
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Exception to income from SP being CP
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gift from one spouse to another, income from interspousal gifted property is presumptively donee spouse's SP
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What if someone receives in trust the income of the trust but not the principal that generates the income?
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This is SP
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What mineral lease distribution is the only one that is considered CP?
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delay rentals
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What mineral lease distributions are considered SP
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everything but delay rentals like bonuses and royalties
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Of all corporate distributions, which is the only one that falls under the rule that income from SP is CP?
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cash dividends
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What corporate distributions are considered SP?
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all but cash dividends like stock dividends, additional shares, and capital gains
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H has a dog that is SP. While married the dog has puppies. What are they?
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CP
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Reqs of premarital agreements
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- must comport with TX Const.
- must be in writing and signed by both parties - no consideration required |
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Can an agreement govern disposition of property on separation, divorce or death?
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Yes
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Can an agreement waive the right to homestead?
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Yes
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Can the parties agree to waive spousal maintenance?
Can the parties agree to limit either party's obligation to furnish child support? |
Yes
No |
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In a premarital agreement, parties can contract on anything except: 2
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- to limit either party's child support obligation, or
- agree that after they marry, one spouse's SP shall be CP |
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Can the couple convert SP to CP after they marry?
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Yes
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Statutory defenses to prevent enforcement of a marital agreement (during marriage) partitioning CP into SP and/or making future earnings SP?
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same as pre-marital
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What must a party establish to be able to set aside a premarital agreement? 2
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1) that the agreement was not signed voluntarily or
2) the agreement was unconscionable when made AND a) there was no fair disclosure of other spouse's property, b) right to disclosure was not waived in writing, and c) spouse had no adequate knowledge of other spouse's property |
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Who bears the burden of proof on unconscionability that the agreement was signed involuntarily
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on the party trying to avoid the agreement
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Are common law defenses like fraud, duress and overreaching available to one seeking to prevent enforcement of a marital agreement?
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not unless the agreement was signed before September 1, 1993
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Is unconscionability a fact question for the jury or a matter of law to be decided by the court?
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matter of law for court
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Is pregnancy or the planning of a big wedding a valid basis for saying a premartial agreement was not voluntarily signed?
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no
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H buys stock that would be SP except he has it issued in names of H and W as CP. Is this CP?
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No, each spouse has 1/2 SP
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Partition
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where spouses take CP and agree to take fractional SP interests in the property
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fraud on the spouse's community estate
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one spouse can make reasonable gifts of CP to a 3rd party as long as such gifts are not so disproportionate as to be in fraud of CP
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Factors to consider in determining whether gift to third party was fraud on community estate 3
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- relationship of donee to donor spouse, gifts to unrelated parties are presumptively fraudulent
- amount of gift in relation to community estate - whether spouse is adequately provided for out of remaining community estate |
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Does the fraud on the community estate apply to life insurance?
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yes
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What should the court do if it finds fraud on the community estate? 2
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- calculate the value by which the community estate was depleted and the value of the reconstituted estate, and
- divide the value reconstituted btw spouse's in a just and right manner |
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What are the court's options in making a just and right division 3
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- award appropriated share of the community estate
- money judgment - both |
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Does divorce affect the right of pre-existing creditors?
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no
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Can creditor's hold W personally liable for H's preexisting debt?
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can't get the new spouse personally unless she later signed the note or H acted as her agent
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Can a creditor get jointly managed CP assets set aside to W?
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No bc judgment lien is valid only against judgment debtor
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five types of classification of marital property for management and liability purposes
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- H's SP
- H's sole management CP - Joint managed CP - W's sole management CP - W's SP |
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If a tort is committed during marriage by W, what is liable and what isn't?
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Everything but H's SP, including all CP
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What if W commits tort before marriage?
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Judgment creditor can only get assets W had control over so W's SP, W's sole management CP, and jointly managed CP
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What kind of K's is a spouse personally liable if the K was made by the other spouse?
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those for necessaries because of the duty to support, so SP can be gotten
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Can a homestead be mortgaged without the joinder of the other spouse?
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no
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