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What is Community Property in Texas?
1. What types of property are SP (5 types)? Property owned before the marriage; acquired during the marriage by gift; partitioned CP; property acquired w/separate funds; & tort recovery for personal injury (not medical or loss of earning potential)
2. What types of property are CP? Property other than SP acquired during marriage & income from SP unless the spouses agree in writing that the income will be separate; income from gift property of one spouse to other; or partitioned CP.
3. When is the status of property determined? The character of an asset is determined at the time the asset is acquired. This rule, the inception of title rule, applies to all assets but employee retirement benefits.
4. What is the community presumption? All assets acquired during marriage are presumed to be CP. All assets acquired on credit during marriage are presumed to be acquired on community credit. All assets on hand when the issue is raised is presumed to be community. The burden on proving property is separate is on the proponent by C&C ev.
5. What happens if community funds are spent on SP or separate funds are spent on CP? A claim for economic contribution arises at the termination of the marriage. A multiplier is figured by dividing the amount of contribution by the equity on the date of first contribution + all contributions & is multiplied by the equity on the date of termination of marriage. Contributions/Equity+Contributions * Equity = Claim
6. What is the status of property that was adversely possessed, begun before marriage & finished during marriage? If the spouse was a naked trespasser, the property is community. If the spouse entered under a rightful claim, the property is separate.
7. What is the effect of title being taken only in one spouse’s name? In common law states the person that takes title is the owner. In CP states the title does not determine characterization. Rather, under the inception rule it’s the time & circumstances of the acquisition. One exception is when one spouse, using SP, takes title to an asset in other spouse’s name. The presumption in that situation is that a gift was intended.
8. How are employee retirement benefit plans handled? The benefits accumulated during marriage are CP. Defined benefit plans are # years while married/# years total (freeze retirement benefit as of date of divorce). Defined contribution plans just subtract the value on day of marriage from current value. A deceased spouse has no interest in retirement benefits.
9. How are business increases during marriage handled? For business owned before marriage, the increases allow a reimbursement claim if the spouse spent more time than he was fairly compensated for & more than necessary to preserve the separate estate.
10. How is property divided upon divorce? A court will effect a just & right division of CP. The court may consider the age & physical condition of the parties, ability & earning power of the parties, needs for future support, size of the estate, benefit spouse would have received from continuation of marriage, & fault. (reviewed on manifestly unjust standard)
11. How is property discovered after a divorce is settled handled? Later discovered CP is subject to a just & right distribution in a separate action. Statute of limitations is 2 years from the point the other party repudiated the claim of community ownership.
12. How are commingled bank accounts handled? Community funds are presumed to be withdrawn first. Thus, the lowest intermediate balance will be considered SP.
13. When can spousal maintenance be ordered? If a couple is married at least 10 years, & one spouse lacks sufficient property to provide for her minimum needs. The spouse seeking support must be unable to support herself b/c of a disability, be a custodian of a disabled child, or lack employment skills adequate to provide for her minimum reasonable needs.
14. How much money can be awarded as spousal maintenance? A maximum of $2500.00 a month or 20% of spouses average monthly income. No more than 36 months unless spouse is disabled.
15. How is property of a bigamous marriage handled? If spouse is unaware of the bigamous marriage, she is called a putative spouse & the relationship is characterized as a partnership. If spouse is aware of preexisting marriage, the relationship is characterized as a meretricious relationship & the spouse gets nothing.
16. What are the requirements for a premarital agreement that would alter the character of community assets? It must be in writing & signed by both parties, no consideration is required, parties may agree that SP remains SP, agreement can govern the disposition of property upon separation, divorce, or death. Agreement can not agree that premarital property becomes CP after marriage. Cannot limit obligation to provide child support.
17. How can a premarital agreement be set aside? By proving that it was not signed voluntarily, or unconscionable when made & there was no fair disclosure of spouses property or obligations.
18. How can premarital SP be converted to CP? Spouses can agree in writing to convert SP to CP. Spouses can also agree to convert CP to SP & can even partition unequally.
19. Are survivorship agreements valid for disposition of CP? Yes, the agreement must be in writing & signed by both spouses, either spouse can revoke w/written notice to other, & a court order will be necessary to adjudicate the agreement valid (clear title)
20. What power does one spouse have to challenge the CP gift of another spouse? One spouse can make reasonable gifts of CP as long as such gifts are not so disproportionate as to be in fraud of the spouse’s community rights.
21. What effect does a divorce have on preexisting creditors? A divorce does not affect the rights of preexisting creditors. If only one party is personally liable b/c the other didn’t sign, creditor can go after CP in an in rem suit seeking to have a constructive trust placed on the property.
22. What is the liability for torts committed by one spouse? All CP is subject to judgment for torts committed during marriage. Only sole/joint management CP is available to satisfy a premarriage tort.
23. What is the liability of one spouse for contracts entered into by the other? Each spouse has a duty to support the other spouse & his or her minor children. Each spouse is personally liable for the other spouse’s contracts for necessaries. Other contracts where other spouse is not personally liable, creditors can only reach liable spouse’s property subject to his control.
Thank you for watching my video and reading the outline. My name is Chris Meyer. I am a family law attorney for the Houston area. I served my country's needs overseas in the U.S. Army and now I looking forward to serving your family's needs right here in Fort Bend and Harris Counties!
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(281) 845-2472
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© 2021 Christopher Meyer Law Firm, PLLC. All Rights Reserved. The information on this video is for general information, entertainment and educational purposes only. Nothing herein should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney client relationship. Please call (281) 845-2472 if you have any questions about this disclaimer. Christopher Meyer Law Firm, PLLC, Primary Office: 1418 Lake Pointe Pkwy Sugar Land, Texas 77478-3998