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Community Property/Marital Property
South Texas College of Law Houston
George, Pamela E.

Marital Property
Chapter One
The Texas Marital Property System
A.        Introduction
1.         Property possessed by either spouse during or on dissolution of marriage is presumed to be community property
            2.         This presumption can only be rebutted by clear and convincing evidence
            3.         Separate property defined Tex Fam Code 3.003 (b)
 
                        A spouse’s separate property consists of:
                        (1)        the property owned or claimed by the spouse before marriage
(2)        the property acquired by the spouse during marriage by gift, devise, or descent
(3)        the recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage
 
4.         Community property consists of the property, other than separate property, acquired by either spouse during marriage
5.         Characterization means to determine whether marital property was acquired at a time or in a manner, which would deem it, separate property of a spouse. If the property, by application, or constitutional or statutory definitions or judicial precedent is characterized as separate property, the community presumption has been rebutted
Hypo
H & W each put ½ of paycheck into joint and separate account in community property state but managed each account separately. Create one account where both have joint management control. Judge can award money in man’s separate account to wife for her living expenses if they were to divorce. 
Liability on the martial estateà Example, wife has charge account at a store. During summer months she was unable to pay bills. Third party files lawsuit (Neeman Marcus charge card). Three accounts (two separate and one joint). The account that is separate and in the husband’s name is not reachable but the other two are. But if both are listed on credit card then both are liable and everything is reachable
 
Notes, Comments, and Questions
Problem
            Range Rover is presumed Community Property.   Can rebut by clear and convincing evidence. Presumed community if other side stipulates. 
House is presumed community.   Client has a limp and cain. Personal injury settlement received eight months earlier. 200k gave 40% to lawyer for 120k remainder.
House, car, check for 120k. Presumed community must prove what portion is separate.
Since it was spent must trace the property. Hire C.P.A. lawyer as an expert witness. One must have documentation and proof.   A
 
 
B.        The Constitution of 1876
            1.         Provisions
                        Tex Constitution of 1876, article XVI section 15
All property, both real and personal of the wife, owned or claimed by her before marriage, and acquired afterward by gift, devise, or decent, shall be her separate property and laws shall be passed more clearly defining the rights of the wife, in relation as well to her separate as that held in common with her husband. Laws shall by passed providing for the registration of the wife’s separate property
 
                        Notes, Comments, Questions
1.         Community property cannot be made into separate property
2.         Wanted to protect the daughters of the big ranch owners
3.         If transfer occurs between spouses presumed to be a gift and thus separate property
 
Hypo
Two lots on Mountain made out tile to both H & W who received by gift. There can be no gift to the community by constitutional definition it is separate equally undivided separate interest in the lots. 
1.         Recovery for personal injuries is separate property but must be for injuries.
2.         Separate property on death can be dispose of anyway the decedent wishes. Community property can devise half
3.         Equitable distribution is the term used at divorce to partition the community.
4.         Upon divorce the court will look at:
            (1)        Earning capacity
            (2)        Children (who has custody)
            (3)        Length of marriage
            (4)        Fault
            (5)        Physical cruelty
Hypo
Own car get married and other spouse makes payments while you are in law school. The car is still separate property. Economic contribution or reimbursement is options for recovery.
 
Hypo
Enter marriage inherited home in heights 1st year of marriage give up job went to law school part time and worked to fix house.  Purchased FMV 80k increase due to work to 160k. 
This is more than economic contribution but community cannot be reimbursed .
 
Rights of third parties to collect from couple i.e., both borrow 1000k sighed at divorce wife is made to pay husband but judge cannot change the contract the husband and the community are still liable. Husband may be able to get indemnification from wife but still liable.
 
 
            2.         Statutes and Decisions, 1845-1947
                       
 
                        Deblame v. Hugh Lynch & Co.
Cotton grown on the separate property of the wife produced by the slaves of the wife was to be levied on by the creditor. The cotton was community property and subject to execution. Income and Revenues from separate property is community property
 
                        Notes, Comments, Questions
1.         The inequity that arises when crops are grown on separate land is characterized as separate property is that one spouse may employ the wives separate property (slaves) to work the husbands separate land thus increasing the husbands separate property.      
2.         The principle which lies at the foundation of the whole system of community property is, that whatever is acquired by the joint efforts of the husband and wife, shall be their common property. 
 
 
                        Stringfellow v. Sorells
 
                        The creditor attempted to levy on the increase value of animals that were                            the separate property of the wife. Live stock

.
 
 
                        Notes, Comments, Questions
1.         Community property can be used to create a joint tenancy with right of survivorship between the spouses, because such a transaction was not an interposal gift, but was an attempt to transfer a survivorship right or interest in community property between the spouses for a valuable consideration and since consideration paid by each spouse is derived from the community estate, the right or interest which each acquired would remain part of the community estate.
2.         Spouses may utilize separate property to create a valid joint tenancy with right of survivorship with the spouses as joint tenants
3.         A spouse utilizing community property, can create a valid joint tenancy with right of survivorship with the spouse and a third party as joint tenants.
 
Hypo
Obtain 10k from a bonus during marriage and put in bank with JTROS between spouse and child from other marriage. Sole management property not separate can set up joint tendency with ROS survivorship with anyone so long as no claim of fraud is made on the community. But if between spouses cannot do
 
            2.         Statutes and Decisions, 1948-1967
                        Williams v. Mcknight
1.         To create a joint tenancy with right of survivorship out of community property, the property must be transmuted into separate property by partition prior to the agreement creating the joint tenancy with right of survivorship. 
2.         Separate property of spouses, not community property may be the subject of a joint tenancy between them with right of survivorship.
                       
 
 
                        Notes, Comments, Questions
1.         In Jameson v. Bain, the partition/joint tenancy card was sighed in the wrong order; that is, the spouses did not first partition the property, but rather did so after creating the joint tenancy. The attempt was not successful.
 
 
            3.         Statutes and Decisions, 1968-1980
 
                        Few v. Charter Oak Fire Ins. Co.
1.         Suit was to recover lost wages that came about due to a personal injury.
2.         The wages lost are community and the husband is a mandatory party
3.         Joinder rules have since been relaxed and the family code section 3.001 (3) defines personal injuries as separate property. But earning capacity is community