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

 
Marital Property
George
Fall 2014
 
 
 
Marital Property is addressed in Family Code Chapters 1-9
The analysis of each case begins with the presumption
Focuses on the effect that marriage has upon property ownership, and the right to manage that property during marriage.
The right to manage property may affect whether or not the property will be liable for debts or obligations incurred prior to or during marriage
How property is disposed of upon death or divorce is affected its ownership.
 
The Marital Property System:
Governs ______ of all property possessed during and upon dissolution of marriage
1)      Ownership
2)      Management
3)      Liability
4)      And disposition
 
Texas is a community property state and is constitutionally driven. We have been a community property state since the 1940’s, remaining as such throughout all reconstructions of constitutions.
Estates are split as “just and right” NOT 50/50
 
Texas Art 16 § 15 (1876) (Amended in 1987, 1999)
–          separate property
1) that which is owned or claimed before marriage or
2) that acquired during marriage by gift, devise (via will), or descent (no will but you inherit because you’re an heir).
*Gifts can be tricky because at divorce, spouses often claim that what one spouse says is a gift (separate), the other spouse now claims is an investment in community property (community).
**In the example of the wife’s father buying a bungalow for the newlyweds in Bellaire, the wife didn’t put only her name on it but both husband and wife; so when they got divorced, it IS NOT community property, but two separate interests! PROBLEM! In Texas, a court cannot divest you of your separate property; yet you cannot split the house, literally. So then the house would HAVE to be sold, then proceeds divided.
–          Does not expressly define community property but provides some guidance through case law;
–          DeBlane v Hugh Lynch “community property is whatever is acquired by the joint efforts of the husband and the wife”
–          Graham v Franco; AKA acquisition under the doctrine of onerous title.
–          Arnold v Leonard; anything that does not meet the constitutional definition of separate property (using the doctrine of implied exclusion)
–          **The constitutional definition of separate property reigns supreme and cannot be impinged upon by legislature or husband and wife. (Though legislation has been crafted to further define wife’s rights)
 
Texas Family Code
–          defines both separate and community property
–          Separate property is defined the same way as Art 16 §15 3.001, but adds a third element of the recovery for personal injuries sustained by the spouse during marriage, except for loss of earning capacity.
–          Community property 3.002 consists of all other property, except for separate property, acquired by either spouse during marriage.
 
Characterization:
Required for determining who manages property, possesses it, and to what extent it is liable to obligations incurred before or during the marriage, as well as the order in which the property is subject to execution.
 
In a marriage, there is the community estate, the wife’s estate, and the husband’s estate.
 
If a man has 10k acres of prop before marriage; the property is separate. At the time of marriage, each acre was worth 1k an acre. By the time of dissolution, each acre is worth 10k. That 9k increase in value, in Texas, is considered separate property. In other states, it could be considered community.
 
When characterizing which type of property, you start with the principle of community property as the presumption; that all property that is POSSESSED at the time of death or dissolution. **TP*** This is the starting point of every marital property question.
 
ANSWERING A TEST QUESTION:
1)      “You start with the community property presumption. Upon dissolution of marriage, we assume that all property possessed at the time of marriage is community property.”
2)      Then determine whether you can rebut that presumption by clear and convincing evidence.
– The presumption can only be rebutted by clear and convincing evidence that the property is in fact separate property. The person that is claiming that it is separate property and not community property is the one that is shouldered with the burden to prove.
 
In death cases: Upon death, the testate deceased can only devise his separate property, and one half of the community property.
In divorce cases: the court is granted broad discretion in the division of community property, but cannot divest title to separate property.
 
Question p. 4
Client requests divorce: at the time he has: 1) a new corvette, 2) and an estate which is now worth 300,000 (was 500,000 at time of marriage).  How would you characterize the property?
A-    The corvette is community property clearly.
B-    We don’t know right off the bat the evolution or devolution of the estate- we would have to follow the money trail (“tracing”) to establish just how the money was used, to determine whether or not it is separate or community.
 
Constitutional Definition of 1876 (-1947): the single most limiting aspect of the definition of separate property is the word “wife.” There is no separate statute dealing with the man’s property, because it is just presumed that the man has separate property. This definition is a protection for the women as a distinction of Texas from the CL states, where their separate property got absorbed into the mans property.
 
The likely reason for a legislature of all men to draft these protections for women is likely due to them wanting to be able to protect their property and legacy for when their daughters got older and married.
But management rights didn’t come until later; so even though the wife could not be divested of her separate property, the man was still the one that would be managing it; not her.
 
DeBlane v Hugh Lynch- precedent for the characterization of crops
Stringfellow v. Sorrells- characterization of livestock and their progeny
Arnold v. Leonard- characterization of rents and revenues
Kellet v Trice- strict interpretation of Texas Const and the restrictions on individuals
North Texas Traction Co v. Hill- characterization of personal injury recoveries
 
DeBlane v Hugh Lynch
            Here, the husband had a debt and the creditor wanted to levy the debts against the crops on the wife’s property.

property, both real and personal of the wife, owned or claimed by her before marriage, and acquired afterward by gift, devise, or descent, 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 property as that held in common with her husband.
                                Laws shall also be passed providing for the registration of the wife’s separate property.
 i.      Limited to gift, inheritance, or before marriage property.
   ii.      You couldn’t agree that something would be separate property.
   iii.      You couldn’t agree to split something so half would be his and half would be hers
   iv.      Single most limiting aspect of the definition of separate property: gender. The constitution does not define separate of men.�The man manages the property, but the woman owns it
b.                          DeBlane v. Hugh Lynch: Judgment against H alone.� Judgment levied against cotton, which was produced by slaves and land that are separate property of W. Crops produced on separate property land is community property.� An increase in value of land that is separate property is separate property.
    i.      The definition of separate property includes the increase of all lands or slaves thus acquired.
    ii.      ��Increase� means the increase in value.� So if her separate property was worth $100 at the time of marriage and upon divorce it was worth $1000, that $900 is separate property.� But growing crops or collecting rent on that separate property is community property.
                                                           iii.      Note: keep this case in mind.� The character of the crops will not change as time goes on in the course of the law, but what will change is whether or not the crops can be used to satisfy H�s debt.
c.                          Doctrine of Onerous Title: Whatever is acquired by the joint effort of the spouses is community property.
  i.      Test: Was is acquired by the labor of spouses?� If yes�C/P.� If no�S/P.
 ii.      This principle lies at the foundation of the whole system of community property.
 iii.      Texas courts have adhered strictly to the doctrine that dividends, interests, rent, and other income derived from separate property of a spouse comprise community property.
**This is the second of the two doctrines of characterization.
 iv.      But see 3.005 Gifts Between Spouses: If one spouse makes a gift of property to the other spouse, the gift is presumed to include all the income and property that may arise from that property.