Community Property Tx Bar Exam

Front 1

What is Community Property?

Back 1

Property—other than SP—that is ACQUIRED by either spouse DURING the MARRIAGE

Front 2

CP presumption?

Back 2

all property owned at marriage is presumed CP

Front 3

To overcome CP presumption:

-Spouses must provide ______ that a particular asset is SP.

Back 3

Clear & Convincing evidence

Front 4

Homer buys a car the day after his wedding to Marge. CP or SP?

Back 4

CP, unless can prove by C&C evidence that it is SP.

Front 5

Inception of Title Rule?

Back 5

Property acquired before marriage is SP

Front 6

Property acquired during marriage by gift, devise, or descent is characterized as?

Back 6

SP

Front 7

Tracing rule?

Back 7

Property acquired during marriage but purchased with SP funds remains SP thru TRACING

Front 8

Homer’s father gives a car to Homer and Marge. Is the car SP or CP?

Back 8

SP, b/c it was a gift.

*but, H and W own it JOINTLY.

Front 9

Homer gets end of the year bonuses based on the safety at the plant during the calendar year. He marries just after the calendar year ends, but receives his bonus just after the wedding. Is the bonus SP or CP?

Back 9

SP.

inception of title rule looks to when H earned the right to the property.
(here a bonus for work performed before marriage)

Front 10

Title to an asset (whose name is on the deed to land) is NOT relevant to the assets characterization.

•except, Title is only relevant to whether one party intended to make a __.

Back 10

gift

Front 11

Homer buys a house with SP, but lists both himself and Marge on the deed. Is the house SP or CP?

Back 11

SP under the tracing rule.

*BUT b/c H put W's name on the deed it creates a presumption that he intended to give her a 1/2 interest in the house.

Front 12

Homer buys a house with CP and the deed names as the grantee: “Marge, as her sole and separate property.” Is the house SP or CP?

Back 12

SP.
-b/c the deed language is strong evidence a GIFT was intended.

*(spouse can gift their 1/2 CP interest to other)

Front 13

Inception of Title Rules W/ INSTALLMENT CONTRACTS:

where a party buys property before marriage and agrees to pay for it in installments. Then gets married and uses CP funds to pay the installments, the assets character is __.

Back 13

SP, b/c title was acquired before marriage.

*other spouse will claim reimbursement

Front 14

Just and Right division applies only to __.

Back 14

CP

-Ct cannot divest title and award SP to other spouse

Front 15

Quasi-Community Property is property that would have been CP had the spouses acquired it while ___ in Texas.

Back 15

domiciled

*divorce Ct divides quasi-CP in just & right manner.

Front 16

Quasi-Community Property is property that would have been SP had the spouses acquired it while ___ in Texas.

Back 16

domiciled

*quasi-SP not divided

Front 17

Homer and Marge live in New Jersey. Homer earns $100 while married. They move to Texas. How will a Texas court treat this $100 upon divorce?

Back 17

Quasi-CP

*divide in just and right manner.

Front 18

A spouse can receive Spousal Maintenance in four cases:

(i) __ + yrs of marriage;
(ii) family ___;
(iii) spousal ___;
(iv) child disability

Back 18

10;
violence;
disability

Front 19

Cash dividend and interest on SP stocks and bonds are __.

Back 19

CP

Front 20

Capital Gain on the sale of SP is __.

•Why?

Back 20

SP

•capital gain on sale of SP is NOT "income" for purposes of the income from SP is CP rule.

Front 21

Stock produced by a stock split of SP stock is __.

Back 21

SP

•stock splits & stock dividends from SP are not considered income from SP.

Front 22

Royalty income from SP land is __.

Back 22

SP

*royalties from Oil & Gas lease treated as sale of the underlying estate.

Front 23

Interspousal gifts Exception:

When one spouse makes a gift of her SP to the other spouse, courts will presume that this is a gift of both the underlying SP asset and the:

Back 23

income produced by it in the future.

Front 24

A trial courts division of CP will be overturned only if it is ____________ and constitutes an ____________.

Back 24

manifestly unjust;
abuse of discretion


*appellate cts usually uphold very unequal divisions

Front 25

Name some of the factors courts consider in dividing the marital estate:

(Non-exhaustive list of factors)

Back 25

•spouses' education, capacities, and abilities
•disparity of incomes
•disparity of earning capacities
•relative physical conditions
•relative financial condition and obligations
•disparity of ages
•size of separate estates
•size of the community estate
•length of the marriage
•whether one party has wasted community property
•benefits that an innocent spouse would have received had the marriage continued
•tax consequences of any proposed division

Front 26

Spousal maintenance terminates upon:

Back 26

•death of obligor or obligee;
•re-marriage of obligee;
•obligee's continued cohab in a permanent place of abode w/ a romantic partner.

Front 27

Modification of Spousal Maintenance Award:

• a maintenance order can be modified downward but NOT upward upon a showing that the circumstances of either party have ________________.

Back 27

"materially and substantially changed"

Front 28

when the community seeks reimbursement from a Secured Debt (mortgage), the value of the reimbursement claim is limited to the ____.

Back 28

PRINCIPLE

cf, unsecured debt = dollar for dollar

Front 29

H uses $100k of CP to remodel (make capital improvements) to a house he purchased before marriage. The property increased in value by $150k. Can community seek reimbursement?

Back 29

Yes.
-reimbursement claim value is $150k (entire amy of increased value)

Front 30

an appellate court will reverse a trial court division of CP if:

Back 30

only if division is so disproportionate as to be manifestly unjust and an abuse of discretion

Front 31

Mineral producing separate property character:

(i) bonuses paid from lease execution?

(ii) royalties?

(iii) delay rentals?

Back 31

(i) SP = bonuses

(ii) SP = royalties

(iii) CP (delay rental = rent)

Front 32

Corporate Distribution where the stock is owned as SP:

(i) stock dividends?

(ii) stock split?

(iii) capital gains?

(iv) cash dividends?

Back 32

(i) stock dividends = SP

(ii) stock split = SP

(iii) capital gains = SP

(iv) cash dividends = CP

Front 33

Mutual Fund held as SP:

(i) capital gains?

(ii) regular dividends?

Back 33

(i) capital gains = SP

(ii) regular dividends = CP

Front 34

cash dividends from SP stock is CP, but what about SP stock that appreciated in value during the marriage?

Back 34

appreciation in value of a SP asset remains SP.

*even if he sales it it remains SP.

Front 35

H owned 100 shares of Exxon before marriage. During marriage the stock tripled in value and H sold it. Is the income SP or CP?

Back 35

SP

-Appreciation of SP remains SP.

Front 36

Does inception of rule apply to stock "options"?

Back 36

NO.

pro-rata split b/w CP and SP

Front 37

H has a defined benefit plan that he has earned partially during M. W predeceases H. W's will left all her property sister. Does sister get a portion of H's retirement.

Back 37

NO. per ERISA, a predeceasing spouse has no devisable interest in a defined benefit plan.

*defined benefit plan is distinguished from a defined contribution plan. in a benefit pension only the company pays in, whereas in a contribution plan - employee pays in.

Front 38

H incorporates Acme Inc. during marriage using $1000 in SP and $3000 in CP. What character is Acme Inc.?

Back 38

SP - 1/4 (tracing rule)
CP - 3/4

Front 39

all four situations in which a spouse can seek spousal maintenance requires the seeking spouse to show:

Back 39

lack sufficient property, to provide for the spouse's minimum reasonable needs.

Front 40

Statutory limits on duration of all types of maintenance:

(i) maintenance is limited to the ______________ to allow obligee to earn sufficient income to provide for minimum reasonable needs.

Back 40

"shortest reasonable period"

Front 41

When does maintenance automatically terminate?

Back 41

by statute it terminates upon:
• death of obligor or obligee;
• re-marriage of obligee;
• obligee cohabs longterm w/ romantic partner in a permanent place of abode.

Front 42

Statutory cap on all types of maintenance payments?

Back 42

lesser of 20% or $5,000 of obligor's gross income.

Front 43

Factors court looks to in determine amount of maintenance payments:

Back 43

•each Ss ability to provide for their minimum reasonable needs independently;
• each Ss employment skills, and the time to acquire education or training;
•duration of M;
•age, employment history, earning potential, phys & emo condition of seeker;
•effect of C-support;
•excessive or abnormal expenditures/destruction of CP;
•contribution to others education, training, or job capacity;
•SP brought into M;
•Homemaker;
•marital infidelity;
•any history or pattern of family violence

Front 44

There is a rebuttable presumption that maintenance for 10+ yr marriage is not warranted unless the seeker has _____ _____ in either:
(i) earning sufficient income to provide for MRN, or
(ii) developing skills to provide for seeker's MRN during period of separation and period of dissolution suit.

Back 44

exercised diligence

Front 45

Statutory limits on duration of spousal maintenance payments for 10+ yr Marriages:

• 10-20yrs?

•20-30yrs?

•30+yrs?

Back 45

• 10-20yrs = max 5yr payment

•20-30yrs = max 7yr payment


•30+yrs = max 10yr payment

Front 46

for a seeker to get spousal maintenance based on his/her own disability, statute requires:

Back 46

physical or mental disability preventing seeker from earning sufficient income to provide for minimum reasonable needs.

*must also prove the standard req's

Front 47

where CP is used to pay secured debt, reimbursement claim is limited to the ____.

Back 47

debt Principle.

*no reimbursement for the interest paid w/ CP

Front 48

when would you seek reimbursement for "time, toil, and effort"?

Back 48

where spouse gives long hours of his "time, toil, and effort" to a closely held family corp and isn't paid a salary but just given stock.

*claim value is calculated by:
TTE beyond that necessary to maintain the SP biz
-minus-
value of any compensation actually received.

Front 49

reimbursement claims are an _____ remedy.

Back 49

equitable


-reimbursement is discretionary

Front 50

what might other spouse argue in hopes the court will reduce the reimbursement claim?

Back 50

OFFSET

-offsets can be used to deny or reduce a reimbursement claim.

Front 51

no OFFSET defense claim allowed for:

Back 51

primary or secondary residence.

Front 52

Spouse canNOT seek CP reimbursement claim for:

Back 52

•child support, spousal maintenance, temp alimony.

•necessaries/living expenses

•nominal contributions of property.

•nominal payments toward a liability.

•student loan debt owned by a spouse.

•spousal gifts

Front 53

can H seek reimbursement for the value of a gift he gave W?

Back 53

NO.

Front 54

FRAUD on the Spouse:

reasonable gift of CP to a third-party are allowed, but _____ or _____ gifts of CP might constitute fraud.

Back 54

excessive; capricious

Front 55

In determining whether a gift of CP to a third party is FRAUD on the community, a court looks at:

Back 55

•who the 3P donee was & size of the gift.
-child = likely read
-mistress = presumed fraud

•could the spouse be 'made whole' out of the remaining community estate.

Front 56

a gift of CP to an unrelated party is ___________.

Back 56

presumed fraudulant

Front 57

Remedy for Fraud on the spouse:

Back 57

as of Sept 1, 2011 in cases of divorce or death, court will calculate a "reconstituted estate" which consists of all property that woud have been in the community estate absent fraud.

Front 58

What is a "reconstituted estate?"

Back 58

remedy for fraud on the spouse in cases of divorce or death.

Ct calculates what the community estate would have been valued at. (reconstituted)

Front 59

upon divorce a court will split a reconstituted estate in a ____________.

Back 59

just and right manner.

*could be disproportionate; money damages; or both

Front 60

on death court splits reconstituted estate _____.

Back 60

50/50

i.e., CP estate worth $2M. H gave $1M to his mistress. thus the Reconstituted estate worth $2M.

innocent spouse gets $1M and H gets a fictitious million he gave mistress.