II.            Dissolution of Marriage

A.    Grounds for divorce

1.     No fault Divorce – Marriage is “insupportable” – only defense is “reasonable expectation of reconciliation. Other grounds used for property advantage perhaps

2.     Six Fault grounds – Cruel Treatment, Adultery, Conviction of Felony (imprisonment of at least 1 year), abandonment for at least 1 year, living apart for at least 3 years, confinement in a mental hospital for at least 3 years

3.     Defenses to Adultery – Abolished. Condonation (knowing about adultery and continuing to live) and recrimination (spouse drove the other to commit adultery) are abolished

4.     Damages btw Spouses – can recover for intentional infliction of emotional distress, but negligent. Note that spouse cannot recover both tort damages and a disproportionate amount of the community estate based on the same conduct

B.    Residence Qualifications; jurisdiction; venue

1.     Petition for Divorce

a.     durational residency requirement – both parties must reside in tx for 6 months and resident of county where filed for 90 days. One party might be enough. If on armed services, still resident

b.     If one spouse is resident, other spouse may sue for divorce resident’s county

2.     Suit for Annulment or voiding – only if married in tx or either party is domiciled in tx

3.     Long-Arm over Nonresident – if petitioner is resident, ct may exercise juris over nonres spouse if tx is last marital residence of the spouses and suit is commenced w/in 2 years after date on which marital res ended OR there is any constitutional basis for personal jurisdiction

C.    Procedure – applies to divorce, annulment, and voiding

1.     Pleadings – Must contain grounds relied on and whether a protective order for domestic violence is pending, NOT a detailed summary of evidentiary facts

2.     Court may order counseling for divorce cases – counselor has to report whether there is “reasonable grounds for reconciliation”, but cannot testify and reports not admissible

3.     Default Divorce not permitted – if respondent not show up, petitioner still has to prove grounds for divorce

4.     Custody and support of minor children – must include separate “SAPCR” (suit affecting parent-child relationship)

5.     Restrictions on Transfers of debt – void if intent is to injure rights of other spouse, but not void with respect to 3^rd parties if they have notice (given by filing a “lis pendens”)

6.     Temporary Restraining Order & Temporary Injunctions – Ex Parte TROs issued to prevent harassing actions; after notice and hearing, can be extended to TI (which can require sworn inventories and appraisals and can exclude one spouse from the residence and can require support from one spouse)

7.     Protective Order in case of family violence – after notice and hearing and showing that family violence occurred and is likely to reoccur à prohibits violence, communicating with family member, staying away from residence or job, stalking, harassing, annoying, etc. If ct finds clear and present danger, can issue ex parte temporary protective order

8.     Jury Trial – if demanded by either party, but only advisory on all issues except child custody

9.     Waiting period – 60 days btw filing of suit and granting of divorce. No waiting for annulment or voiding

10.   Divorce action abates upon death

D.    Alternative Dispute Resolution – ct can refer or parties can agree, but both parties must sign statement acknowledging awareness of methods

E.     Court-Ordered Alimony not valid – except for limited spousal maintenance (usually only after parties married 10 years)

F.     “Just and Right division of Community Property” – 2 year SofL to enforce division of property

III.           Parent-Child Relationship

A.    Generally

1.     Child = “minor” under 18, unmarried. 16 y/o can petition to remove disability status if living apart from parents and self-supporting and ct feels it’s in best interest

2.     Parent

a.     Mother - i) giving birth ii) adjudicated iii) adoption

b.     Father - i) unrebutted presumption of man’s paternity ii) acknowledgment of paternity iii) adjudication of paternity, iv) adoption v) man’s consenting to assisted reproduction by his wife, leading to child

c.     Presumption of Paternity in context of marriage - i) if Child is born during marriage or w/in 300 days of divorce (10 months) ii) man married the mother after the child’s birth, and hevoluntarily asserted his paternity by filing record with bureau of vital stats, named on child’s birth certificate, or promising in a record to support

-       challenge to presumption – brought w/in 4 years of birth unless ct determines that presumed father never lived with mother and never had sex during probable time of conception.

-       Only disproved by genetic testing, but ct can deny testing and adjudicate if conduct of parents estops claim of paternity and inequitable and not in best interests of the child

d.     Rights of Father if Mother is not married – father of non-marital child is entitled to service of process in any SAPCR and can be adjudicated the child’s parent in a paternity suit

e.     Assisted reproduction – child is not the child of the donor unless husband of the mother. Husband is father if he consents in writing to the assisted reproduction

3.     Rights and Duties of the Parent – right of custody; duty of care, support; rt to consent to marriage, medical treatment, military services, rt fo manage child’s estate, and inherit through the child

4.     Parental Notification of Abortion – 48 hours notice to parent or ct approval or physician determination of necessity

5.     Liability – for property damage of child’s negligence if reasonable attributed to negligent failure to exercise parental control or discipline. Liable for willful or malicious conduct of child 12 or older (limited to $25k per act plus costs and atty fees) plus actual damages limited to $5k for any theft

B.    Suit Affecting Parent-Child Relationship “SAPCR” – custody, visitation, support, adoption, paternity, termination

1.     Persons who may bring – parent, guardian, managing conservator, government, adoption agency, foster parent (for 12 months), perons with custody for 6 months, father of non-marital child can bring paternity action

2.     Venue – dissolution venue controls, otherwise county where child resides (cannot be modified by parties agreement)

3.     Continuing exclusive jurisdiction – after final decree is SAPCR, same court retains juris over all matters in connection with the child

a.     exceptions for moving outside of state

b.     Transfer to another county – mandatory when divorce pending or child has resided in new county for 6 months

4.     Long Arm Juris over nonresidents

a.     personally served in Texas

b.     Submits to juris of Tx by consent, general appearance,

c.     Resided with the child in texas or resided in texas and gave support to the child

d.     Child resided in texas bc of acts of the individual

e.     Individual had sex in texas and child could have been conceived by that act

f.      Any other constitutional basis

C.    Custody – managing and possessory conservators

1.     rights, duties, powers – if both parents appointed as conservator, ct will specify rights. In all cases, each parent will have the rt to info on child’s health, education, welfare.

a.     General rts – access to child’s records, consult with school officials, designated person notified in case of emergency, rt to manage child’s estate

b.     Period of Possession – rt to direct moral and religious training, duty of care, discipline, support

c.     Rts pwrs exclusive to sole managing conservator – rt to child’s services and earnings, decisions about child’s education, pwr to consent to marriage or military enlistment, pwr to receive disbursements for child support and spend them, etc.

d.     Nonparent Managing Convservator – all except duty to manage child’s estate and duty to provide medical care, but can consent to adoption if PC relationship terminated

2.     Sole Managing Conservator –

a.     Best Interest Test – Primary consideration

b.     Strong Preference for Appointment of Parent – absent special circumstances, must appoint parent. Can also do Joint managing conservator. Cannot use gender or marital preference to determine

c.     Agreement of parties – ct appoints person unless not in best interest

d.     Two or more children – should not be split unless clear and compelling reasons – use best interest test

e.     Child’s Preference – 12 y/o may choose MC subject to judicial veto. On motion by either party, judge Must interview the child to ascertain preference à result not binding on court

f.      Death of MC – does not terminate exclusive continuing jurisdiction. Surviving parent has superior rt to custody

3.     Joint Managing Conservator – Unless history of family violence, rebuttable presumption that JMC = best interest

a.     Not require equal periods of physical possession, and one of the homes usually becomes C’s primary residence. Jury verdict as to C’s primary residence is binding (cannot to JNOV)

b.     Requisites of Agreement of Order - i) establish C’s residence ii)include provisions not to disrupt C’s schooling, routine, friends iii) give rights exclusive to one JMC

c.     Duty of support – appt of JMC not affect ct ability to impose child support

4.     Grandparent may bring SAPCR – if i) child’s env with parents or present MC present serious and immediate questions concerning child’s health or welfare ii) both parents consents or iii) both parents deceased

5.     Possessory Conservator – noncustodial parent with visitation rights. Give possession of child over 3 whose parents live w/in 100 miles to noncustodial parents alternate weekends, Wednesday evenings in school year and 30 days in summer. Parties can agree to diff terms

a.     Parent denied access to child – history of family violence during 2 years preceding suit and shown by preponderance of evidence UNLESS ct finds i) awarding access will not harm child and is in best interest AND ii) enters possession order designed to protect C

b.     Possession cannot be conditioned on payment of support

c.     Ct can give Make-up days for lost possession

6.     Notice of Address change – give other party 60 days notice

7.     Modification of Order establishing conservators (heavily tested)

a.     Juris – court of continuing exclusive juris, or if child is in new county for 6 months, party motion is mandatory

b.     Grounds – best interest of child plus any of three tests:

-       circumstances have materially and substantially changed

-       Child is 12 y/o and filed name of conservator that child prefers

-       Ct appted conservator has relinquished primary care and possession for at least 6 months plus best interest

c.     Modification of Rt to determine primary residence w/in one year of order – show one of the following:

-       present env may endanger physical health or impair emotional development

-       person with rt to determine primary residence consents

-       person with rt has relinquished care and possession for  months plus best interest

d.     Modification of Order on conviction for child abuse or family violence – conviction = material or substantial change that justifies modification of earlier order appointing conservator

e.     Limitation of Temporary Orders – while case for modification is pending – ct may not enter temporary designation  of rt to determine primary res unless one of 3 tests is met:

-       temporary order is necessary bc present env may endanger C’s physical or emotional health

-       person designated voluntarily relinquishes plus best interest

-       child is 12 y/o and files with ct name of conservator that he wants

f.      Increased expenses bc of change of residence – if change of residence more expensive, ct can allocate farily and equitably, taking into account the cause of more expenses and best interest of child

D.    Enforcement of Custody Order – (important – Know habeus corpus, tort liability for “kidnapping”, and contempt)

1.     Habeus Corpus – sole purpose is to return possession of C to person entitled to possession under ct order. Writ is automatic, immediate, ministerial and MUST be ordered UNLESS i) finding of immediate serious question concerning C’s welfare or ii) relator has by consent or relinquished possession of C for months.

a.     Custody questions are not to be relitigated

b.     Parent asserting right of possession against non parent may bring habeus even w/o custody order

2.     Tort Liability for Interference with Child Custody – if noncustodial parent “kidnaps” or custodial parent conceals from possessory conservator with visitation rights. 30 days notice for all D (including aiding and abetting)

a.     Damages – actual to P, including costs of locating the child, atty fees, costs, mental anguish. Exemplary damages may awarded if D acted with malice or intent to cause harm to person whose possession was interfered with. Party that aids and assists can be J&S liable

b.     Frivolous Suits – D entitled to court costs and atty fees if suit dismissed or judgment awarded to D and ct finds claim for dmgs was frivolous or unfounded

3.     Criminal Liability – 3^rd degree felony

4.     Contempt of Court – ct order regarding custody enforceable by contempt, punishable by 6 months in county jail and/or $500 fine. Relinquishment of possession of C by MC is affirmative defense to contempt. MC can be contempt

5.     Bond or Security – If party fails to comply with custody arrangement on two or more occasions in violation of ct order, after notice and hearing, ct order party to furnish bond or other security conditioned on compliance

E.     Uniform Child Custody Jurisdiction & Enforcement Act – “UCCJEA” to help interstate disputes

1.     Primary Test – Home State Jurisdiction. State where C lived with parent for at least 6 months. Disregard temp absenc

2.     Exclusive Continuing Jurisdiction – until i) neither C nor one P have a sufficient connection with the state and substantial evidence relating to the matter is no longer available in the state OR ii) neither the C nor the C’s parents continue to reside in the state

3.     “Home State” rule does not apply: court will have juris when no other state has or accepts home state juris AND i) C and at least one parent have “significant connection” with the state and ii) “substantial evidence” concerning the C is available in the state. In addition, court has a juris to enter or modify child custody or visitation order if no other state has juris

4.     Court can decline juris when: it determines that it is an “inconvenient forum” and another state has more proper juris. Also, court can decline juris if the party seeking juris has engaged in “unjustifiable conduct” (kidnapping)

5.     Temporary Emergency Jurisdiction – in cases of Abandonment or Abuse (to protect the child).

6.     Enforcement of other state’s orders – custody or visitation orders can be registered in Tx and enforced.

a.     Can subpoena respondent and award physical possession to the petitioner

b.     Can issue warrant to take possession of C if imminently likely to suffer serious physical harm or be removed form the state

c.     Public Officer can locate, obtain, enforce custody order when requested by court of if reasonable belief that person holding the C has violated a criminal statute

7.     Parental Kidnapping Prevention Act – federal law – gives full faith and credit to other state’s custody determinations

F.     Grandparents may petition for Reasonable Access – GP have independent cause of action to obtain and enforce access rights under a SPACR unless enforcing is not in best interest of C or C has been adopted by new family.

G.    Child Support

1.     Duty of Support – Each parents has until C is 18 and thereafter until graduates high school. Also duty to support adult child disabled before 18. Marriage, removal of disability, or parent death terminates duty

2.     Order of Child Support – Ct may order either or both to pay. Made through local child support registry or atty general. Can reach parent’s spendthrift trust to get child support payments. Not dischargeable in bankruptcy.

3.     Amount of C support – not affected by bastard children. Factors = statutory guidelines, needs of C, ability of parents, amount of possession of C by parent.

a.     Statutory guidelines – 1 child = 20%, 2 C = 25%, 3 C = 30%, 5 C = 40%, more than 5 = 40%+

b.     Rebuttable presumption that statutory guidelines is reasonable and in child’s best interest

c.     Guidelines apply to first $6k/month of parent income. If parent makes more, ct can order more

d.     Multiple Families – taken into account in applying guidelines

e.     Net resources – earned income, passive income (dividends, interest, royalties), and other income (SS, disability)

-       if obligor parent is intentionally unemployed, ct applies guidelines based on what P could make

-       in computing net res, deductions limited to FICA, union dues, health ins for children, withholding allowed for single person claiming one personal exemption and a standard deduction

4.     Modification of Support Order – only by court of continuing juris.

a.     Can modify if i) circumstances of C have materially and substantially changed or ii) 3 years since order last modified and amt of support differs from stat guidelines by either 20% or $100

b.     Agreement not seek future increases in child support unenforceable as against public policy

c.     Parents have no authority to reduce or modify ct-ordered support or to settle claim for support arrearages w/o ct approval

5.     Ct Must order obligor to provide health insurance – either has to pay premium from either parent’s employment plan or provide from 3^rd party. If none of these exist, ct can order “a reasonable amount each month as medical support for the child” in addition to statutory support

6.     Support obligations not dischargeable in bankruptcy

H.    Enforcement of Support Order –

1.     Mandatory Withholding from earnings – final order for periodic support must provide for garnishing wages EXCEPT where good cause is shown or parties agree otherwise. (automatically kicks in if obligor becomes delinquent)

a.     maximum withholding – 50% of disposable earnings (not include investment income. Means gross earnings less FIT, SS, union dues, 401k contribution, med ins). Child Support withholding has top priority to other claims

b.     Arrearages – whichever is less of i) 20% additional withholding OR ii) amt needed to clear debt in 2 years.

-  No statute of limitations for this remedy.

c.     Self-Employed persons or others not subject to withholding may be required to give bond or other security

2.     Contempt – After notice (10 days) and a hearing, can be enforced by contempt ($500 or 6 mo county or both or suspend order of commitment and do 5 years probation)

a.     Inability to pay and actual support (MC voluntarily relinquished possession) – affirmative defenses

b.     Due Process Requirements – contempt order cannot be given in absentia and proven “beyond a reasonable doubt and indigent, informed of rt to have counsel appointed

c.     No Interstate Enforcement via Contempt – tx ct only give contempt for tx order. Exception: if other state order is registered via certified copy  of the order with tx court under Uniform Interstate Family Support Act, same as tx

3.     Suspension of Licenses and Disqualification – licenses (driver hunting fishing professional business) if obligor is i) 90 days in arrears ii) had opportunity to make payments under schedule iii) failed to comply with repayment schedule. Licenses restored when arrearages repaid. Also, delinquents cant get state grants, loans, contracts

4.     Interest – after notice and hearing where amt due is determined, ct can order amt plus % interest

5.     Child Support Lien for Arrearages – Statutory Lien arises by operation of law for all overdue support, even if no judgment yet. Attaches to all real property (except homestead) and all personal property (except exempt from creditor’s claims)  and claims for negligence, personal injury, workman’s comp

a.     beneficiaries – custodial parent, atty general, domestic relations office, atty appointed as friend of ct

b.     perfection of lien – by filing abstract of the judgement with appropriate authority or by filing child support lien notice that indentifies the case, names, addresses, and amount (if no final judgment yet)

c.     Effect of Lien – filing gives record notice. Property subject to lien cannot be sold, transferred, etc. until claimant signs release of lien, or ct orders release. After attachment, hearing to determine arrearage à judicial sale

d.     Interest of Obligor’s Spouse – if new spouse’s property or jointly owned, new spouse can petition to release lien if sale would be unreasonable hardship on her

e.     Levy and Execution of Obligor’s Financial Assets – judgment rendered à claimant delivers notice of levy to financial institution and to O à O has 10 days to pay arrearages or arrange to or to contest à levy paid by institution btw 15 and 21 days after notice

6.     Uniform Interstate Family Support Act “UIFSA” – method of enforcing modifications of support in other states

a.     enforcement – withholding order mailed directly to obligor’s out of state employer or to foreign support enforcement agency. If order registered with tx ct, becomes tx order

b.     modification – out of state support order only modified if i) issuing ct no longer has continuing exclusive juris ii) petitioner is a nonresident and iii) respondent subject to personal juris in tx

7.     Full Faith and Credit for Child Support Orders Act

I.      Termination of Parent – Child Relationship

1.     Involuntary termination – by statute if i) one of the grounds for termination is established and ii) best interest of C. Both of these proved by “clear and convincing evidence”

a.     Grounds

-       Abandonment – voluntarily left and i) expressed intent not to return ii) did not express intent to return, failed to support C, and stayed away for 3 months or iii) expressed intent to return but failed to support C and stayed away for 6 months. Precipitous abandonment = parent left w/o means of ID and C cannot be reasonably be ID. Father relationship can be terminated if he voluntarily abandoned pregnant mother and failed to support before or after birth

-       Imprisonment for more than 2 years – if knowingly engaged in crim conduct

-       Neglect – knowingly placed child in conditions that endangered

-       Abuse – P engaged in conduct or placed with persons engaged in conduct that endangered

-       Use of Controlled Substance – if P used in a way that endangered and failed to complete ct-ordered program, OR if parent was cause of C born with addiction

-       Criminal Act resulting in pregnancy – terminates P rights

-       Failure to support for one year – includes not paying child support. Indigence is a defense

-       Parental misconduct – failed to ct order relating to child abuse, or C not in school, or C absent from home w/o consent and w/o intent to return

-       Criminal Act towards child – cause of serious bodily injury to C or rts terminated to another C

-       Mental or Emotional Illness – unable to care for C and islikely to continue until C is 18

b.     Guardian Ad Litem – must be appted in suit to terminate PC relationship unless i) C is petitioner ii) atty ad litem appted or  iii) C interest adequately represented by a party to the suit. Must appt atty ad litem if state wants to terminate PC relationship. May be appted in other SAPCR.

c.     Jurisdiction – covered by UCCJEA

d.     Involuntary term of rts of alleged father – father has standing to challenge adoption, but if father is unknown or has no interest in child, statutory termination (unless father signed affidavit of waiver of interest):

-       Culpable Acts – if father committed any of the “grounds” for termination

-       Failure to respond to citation

-       Failure to file with paternity registry – tx bureau of vital stats w/in 30 days of C’s birth. If not, cannot contest paternity after rts terminated

2.     Voluntary Termination Petition – may be filed anytime after first trimester. No hearing or order until C is 5 days old

a.     Affidavit of Relinquishment of Parental Rights – witnessed, notary public, 48 hours after C birth à consenting decree so that not need ct appearance for termination. Once termination decree, affidavit is irrevocable

3.     Affidavit of Status of Child – after first trimester, says that child will be born out of wedlock and paternity not established. Also need info regarding father for due process claims.

4.     Affidavit of Waiver of Interest in the Child – Putative father disclaims interest.

5.     Effect of decree terminating PC relationship – final judgment and if no appeal, cannot be modified. Waives all rights except child can still inherit from natural parents unless rt is waived in decree

J.     Adoption

1.     Creates PC relationship as if C born to them

a.     Any adult can adopt as long as in C best interest. If married couple, both spouses must join.

b.     When may C be adopted? PC rel with natural parents terminated, step-parent; former stepparent only if i) C is 2 y/o ii) PC rel terminated to one parent iii) former stepparent has been C’s MC or has had actual care, possession for 6 months (if nonterminated P consents) or 1 year (if nonterminated P not consent)

c.     Per-Adoptive Home Screening, Criminal Record, Post-Placement Adoptive Report Required

d.     Consent of C over 12 required and consent of MC required. But ct can waive both requirements

e.     C must have resided with P for 6 months unless waived (in best interest of C)

f.      Venue – county where C resides or where P resides unless SAPCR tied to a divorce action

g.     No Jury trial

h.     Court attendance – adopting parents and C must appear at adoption hearing

i.      Death or Divorce – abates proceeding unless by 2 ppl and only one dies.

j.      Direct or Collateral Attack – not allowed to challenge adoption decree more than 6 months after decree entered

k.     Nonlicensed Adoption Placement Activities - misdemeanor

2.     Social, Health, Educational, Genetic History report – required before adoption granted. Report Summary available at adulthood, but names or parties is confidential unless both parties want to find each other.

3.     Adoption of Adult – if adult consents in writing. Still child of natural parents for inheritance although natural parents cannot inherit from him

4.     SAPCR standing rules for adoption cases – stepparent, adult in possession, any person with substantial contact

K.    Paternity

1.     Paternity suits – governed by Uniform Parentage Act. Brought by C or C’s mom, or if mom is dead, brought by alleged father. Father is usually respondent and suit is usually for support. Must have personal juris over father and suit must be brought w/in 4 years of C’s birth

2.     Genetic Testing – must be 99% and 100 to 1 paternity index. If genetic test fails, case is not dismissed à other evidence is admissible. If person refuses to do genetic testing, court can hold in contempt, or if person is alleged father, court can declare default judgment against him

3.     Temporary Order for Child Support – if any of i) presumed father of child ii) petitioning to have his paternity adjudicated iii) identified as father thru genetic testing iv) clear and convincing evidence that he’s father.

4.     Effect of Adjudicating Paternity – PC relationship, all rights and duties

5.     Acknowledgment of Paternity – in writing (can be by minor) signed by mother and putative father. If mother is married to a different man, he must sign denial of paternity

a. Challenges – may rescind before 60 days after acknowledgment is filed with vital stats. OR before 4 years if alleging fraud, duress, material mistake of fact – party contesting paternity has burden of proof

6.     Paternity Suit by another Man when child has presumed father – 4 year SofL

L.     Child Abuse – Professionals that believe child has been physically or mentally abused or neglected must report info w/in 48 hours. Cannot delegate the duty. Can testify in proceeding w/o crim or civil liablity

Community Property

I.              Introduction

A.    Separate Property

1.     Property owned by iether spouse before marriage

2.     Property acquired during marriage by gift will or inheritance

3.     Separate property produced by a written partition of community property

4.     Tracing principle – property purchased with separate funds

5.     Tort recovery for PI except medical expenses and loss of earning capacity (loss of consortium goes to other spouse SP)

B.    Community Property – All other property acquired during marriage ex. Salary/wages, income from community assets (bonus earned by spouse before marriage but paid to her after marriage = her SP)

1.     Income from Separate Property is community property (but sole management CP) unless

a.     spouses agree in writing that the income will be SP

b.     Gift from one spouse to another – presumably donee’s SP

c.     Delay rentals from oil and gas are separate property

d.     ?? in conviser

                       2.      CP upon divorce is subject to “just and right” equitable division

C.    Community Presumption

1.     All assets acquired during marriage presumptively belong to the community

2.     All assets acquired on credit during marriage are presumptively acquired on community credit

3.     All assets on hand whenever the issue is raised (divorce, creditor’s claim, death) are presum CP

4.     Burden of Proof – on party that claims property is SP, and must show “clear and convincing evidence”

5.     Even in tort injury, if recovery is not broken down in party for medicals and part for pain, ALL CP

II.            Characterization issues

A.    Inception of Title Rule – whether SP or CP determined at the time the asset is acquired. Subsequent events or expenditures never affect the initial characterization, they only go to a claim for economic contribution.

1.     Not apply to employee retirement benefits.

2.     If CP funds used to pay for house that is SP à spouse dies à other spouse gets i) homestead ii) economic contribution

B.    Community Funds expended on one spouse’s Separate Property

1.     Statute – if CP funds are used to reduce secured debt or make capital contributions on one spouse’s SP, community has claim for economic contribution that matures on termination of marriage (also if SP funds used for CP à contribution). If not secured debt or capital contr, can still be equitable claim for reimbursement

2. In cases of reduction of secured debt, economic contribution is the calculate contribution like this:       

    _                    CP contribution (to reduction of principal debt)                                         _    X      Equity = Contribution

    CP contribution + SP contribution (during marriage) + Equity on day of 1^st contribution   

3.     Cost of improvements using CP funds counted as economic contribution

4. Economic contribution does NOT include mortgage interest payments or property taxes, just secured debt reduction

5. Upon death or divorce, division of CP (1/2 to each) can be imposed by equitable lien on any property in the marital estate, not just the property benefited by community contribution (subject to homestead exemptions)

6. If SP spouse X used to build house on SP of spouse Y, house is considered fixture of land, and is Y’s SP, but X gets economic contribution for capital contribution

7. No reimbursement claims for living expenses, payment of student loans, contributions of nominal value

C.    Property brought to texas from another state

1.     In common law state, H salary his SP, W salary her SP; how title is held determines ownership; If SP in common law state, it is SP in texas after brought to texas

2.     “Quasi-Community Property” – property acquired in a common law state, which would have been classified as CP in Texas, is treated as CP for divorce purposes and subject to “just and right” equitable division”

3.     But upon death,  stays SP. Deceased Spouse estate would be his original SP + 1/2CP

4.     “community credit presumption” – goods  purchased on credit during marriage are CP and funds borrowed are community credit à mixed ownership (where 20% down payment is with SP and rest on mortgage à 1/5 SP 4/5 CP)

5.     Because of CP system, Texas does not have “elective share statute” or recognize “tenancy by the entirety”

6.     CP funds used to buy land in common law state and title to one spouse à Use Situs rule, thus SP of title holder, but other state will recognize other spouse’s ½ contribution à constructive trust

D.    Community Credit Presumption – can be overcome by one of 2 tests:

1.     Creditor agreed to look solely to the separate credit of the borrowing spouse. Be the result if H had signed the note “H, for his separate estate”

2.     Spouses agreed it was to be on separate credit of the borrowing spouse

**   Not matter that H secures loan with SP, signs note alone, deed in his name à still CP acquired on credit during marriage because title held not matter, signature presumptively on behalf of community, note security not only limited to SP (creditor can reach CP). Will only overcome community credit presumption if non-recourse note where borrowing spouse is not personally liable

E.     Effect of how title is taken; When does it affect classification?

1.     Generally – how title is held does not affect; use inception of title rule (time and circumstances of acquisition)

2.     Exceptions

a.     one spouse uses SP funds and takes title in other spouse’s name, presumption of gift to spouse à SP

b.     one spouse uses CP funds and takes title in other spouse’s name, community presumption applies, but only slight evidence needed to show gift to other spouse’s separate estate was intended

c.     one spouse uses CP funds and takes title in other spouse’s name, and deed says “W’s sole and separate property” à W’s SP assuming W participated in the transaction. If W did not, then it is CP

F.     Application of Inception of Title Rule to adverse possession begun before marriage, completed during marriage – if claimant entered under a “rightful claim” before marriage, land is SP. If claimant was a “naked trespasser”, then CP

G.    Life Insurance Policies – inception of title rule – first premium payment determines SP or CP for character of life ins.

1.     If policy started before marriage, it is SP. If started during marriage, it’s CP

2.     If CP funds used to pay premiums of SP policy à equitable claim for reimbursement (not economic contr)

3.     Even if CP policy paid to someone other than spouse (H’s sister), no reimbursement since CP funds for CP policy

H.    Employee retirement benefits

1.     Employment started after marriage = CP regardless of type

2.     Employment started before marriage = (inception of title rule not apply) – part before marriage is SP and part after is CP.

a.     defined benefit plan (amt of benefit tied to years of service) – years while married divided by total years. Payable either “if, as, and when received” or by “cashing spouse out” by giving her assets of equal value, leaving pension to working spouse.

-       if divorce, W gets her CP share of H’s pension à QUDRO (qualified domestic relations order) federal law

-       if W predeceases – no share, federal law preempts.

b.     Defined contribution plan – amt in retirement account at time of marriage = SP; rest up until divorce = CP

3.     Benefits earned after divorce = ct determines value of community interest at time of divorce (average of 3 years, etc.)

4.     Conflicts of Laws – benefits earned in different states, part is SP and part is CP under conflicts laws

5.     Military Benefits – spouse gets CP interest in retirement if she was married during 10 years of military service. Spouse has no interest in disability military retirement benefits

6.     Misc. – Spouse has CP interest in disability insurance benefits acquired during marriage (even if benefits paid after divorce). Social Security not divisible upon divorce bc of federal preemption. Worker’s comp determined by date of disability, not when earnings are received

I.      Close Corp Business Interests – SP if owned before marriage, but community estate entitled to reimbursement for:

1.     value of time, toil, talent expended by H to enhance his separate estate

a.     beyond the time that is reasonably necessary

b.     reduced by compensation in the form of salary, bonus, dividends, etc.

2.     Forumla = Value of Time, Toil, Talent (what execs in comparable positions would be paid)  MINUS value of the time reasonably necessary to preserve the estate MINUS actual compensation (wages, etc.)

3.     Ex. Can’t keep all your money in close corp and pay yourself $1/yr in wages and screw spouse – W will get some

4.     Alter Ego – might find CP

J.     Comingled Bank Accounts – community presumption applies where tracing to establish SP is difficult

1.     “Community Out First Rule” – presumed that community funds were withdrawn first, rest is SP

2.     “Lowest Intermediate Balance Rule” – lowest balance = SP

III.           Division of Property Upon Divorce

A.    Divorce Court cannot divest separate title of one spouse and award it to the other spouse (compensating with other property) – Trial court can only affect SP when support for minor children is at issue

B.    Trial Judge determinations hold a lot of weight – unequal divisions only reversed on appeal if so disproportionate as to be manifestly unjust and an abuse of discretion.

1.     Factors: age & physical condition, relative ability and earning potential, relative needs of future support, size of estate, benefits spouse would have received from continuation of marriage, fault

2.     Fault – Court can take fault into account even in no-fault divorce.

C.    Appellate judge cannot redistribute estate based on what he thinks is “just and right” – can only reverse and remand

D.    Later-discovered CP not partitioned at divorce subject to just and right distribution in a separate action.

1.     S of L = 2 years after other party repudiated claim of community ownership (not 2 years after divorce)

E.     Limited Spousal Maintenance –

1.     Eligibility

a.     Couple married for at least 10 years (unless other spouse convicted of family violence in last 2 years)

b.     Spouse must lack sufficient property to provide for her minimum needs and

c.     Spouse is seeking maintenance either i) unable to support herself bc of disability or ii) be custodian of a disabled child or iii) lacks employment skills adequate to provide her minimum reasonable needs

2.     Maximum award = lesser of $2500/month or 20% of spouse’s average monthly income – limited to shortest period that will enable spouse to obtain appropriate employment or develop an employable skill. Max time = 36 months

3.     Factors = lack of employment history and skills, her physical and mental condition, her contributions as homemaker and to earning ability, other spouse’s ability to meet his needs and child support obligations

4.     Modification – amount can be modified lower but not higher upon showing materially or substantially changed circumstances. Award terminates upon i) death of either party ii) remarriage of maintained spouse

5.     NO ALIMONY

a.     Exceptions: i) temporary alimony “until a final decree is entered”, ii) Contractual Alimony – parties agree iii) in rem periodic payments IF referable to property not easily divided.

6.     Life Insurance – divorce terminates former spouse’s rights as beneficiary unless i) spouse is renamed as beneficiary after divorce and ii) divorce decree names spouse as beneficiary

7.     Insurance follows the property – auto accident proceeds goes to owner of car regardless of who is named beneficiary

8.     Good will of professional practice – not property subject to division

9.     Earning of a professional degree – not subject to division, even though tuition paid from CP

10.   Bigamous relationship – if not legally married, no CP

a.     unaware spouse, called “putative spouse” characterized as partnership or joint venture

b.     use CP laws anyway – ONLY if spouse didn’t know

c.     if original spouse (nonbigamous) dies or divorces, then new relationship is legal

IV.           Income from separate property is community property – exception for gifts and written agreements

A.    Trust Income interests – interest from trust is SP unless he had unrestricted power to withdraw and didn’t

B.    Mineral Interests

1.     Bonus paid by gas company in consideration of oil and gas lease = SP

2.     Royalties = SP

3.     Delay rentals = CP

C.    Corporate Distributions –

1.     10% stock dividend = SP

2.     stock split resulting in more stock = SP

3.     Proceeds from sale of stock (capital gains) = SP

4.     CASH dividend paid = CP

5.     Stock options awarded during marriage = CP

D.    Animals increase – birth to new animals = CP

V.            Agreements altering the character of assets

A.    Premarital Agreements

1.     Uniform Premarital Agreement Act – key features

a.     in writing signed by both parties

b.     no consideration requied

c.     parties can agree that income from SP will be SP

d.     agreement can govern disposition of property on separation, divorce, death including making of will and trust

e.     can waive right to homestead, exempt personal property, family allowance, and can deal with any other matter including their personal rights and obligations

f.      Can agree to keep salary and wages as SP

g.     Can not agree before marriage to make inherited SP into CP (only agree to that after marriage)

h.     Can waive right to spousal maintenance and support

i.      Can NEVER limit obligation to furnish child support

2.     Invalidated if not signed voluntarily

3.     Invalidated if either:

a.     “unconscionable when made” OR

b.     no fair disclosure of property or financial obligations, right to disclosure was not waived, AND no adequate knowledge of property or financial obligations

c.     Burden of Proof of unconscionablity on party seeking to void the agreement – matter of law, not fact so no jury

B.    Marital Agreements – spouses can agree in writing to convert separate property into CP (advantage is that stock gets new basis upon death of one party, disadvantage is “just and right” division for divorce and that power of disposition lost over half of property)

1.     Gift given to both “as community property” or other acquisitions inended to be CP are still SP – need writing

2.     Spouses can make unequal distributions

a.     agreement is valid against preexisting unsecured creditors

b.     if land, agreement must be recorded in records office where county is located

c.     if intent is to defraud creditors, then not valid against creditors

3.     Can also make exchange agreement if recorded in county where located (for land)

C.    Community Property Survivorship Agreements – “spouses can agree that all or part of CP goes to surviving spouse upon death of one” – can be used for specific assets, all CP, CP not yet acquired, etc.

1.     must be in writing and signed by both parties (compare to other survivorship agreements, where party that survives must have signed it in order for it to be enforceable)

2.     Either spouse may revoke by written notice to other spouse

3.     Court Order Adjudging agreement valid – agreement valid w/o it, but since it is non-probate transfer, ownership rights won’t be established in probate proceedings w/o the order

4.     3^rd party dealing with decedent’s estate w/o notice of agreement are protected – BFP takes good title

5.     3^rd party dealing with surviving spouse w/o notice of revocation – six month rule – if purchaser takes more than 6 months after death à good title against decedent’s successors

D.    Palimony agreements – “on consideration of nonmarital conjugal cohabitation” must be in writing and signed by the party sought to be charged

VI.           Power To Challenge Gifts of CP

A.    Fraud  on the Spouse’s Community Share

1.     One spouse can make “reasonable” gifts of community property, as long as gifts are no so disproportionate as to be in “fraud of spouse’s community rights”

2.     Factors:

a.     relationship to donee – gift to unrelated party is presumed fraudulent. Absent special circumstances, gift can be set aside in its entirety during challenging spouse’s lifetime, ½ after challenging spouse’s death

b.     amount of gift in relation to estate

c.     whether special circumstances justify the gift

d.     whether gift was of the donor’s sole management CP

3.     Also use “fraud on the spouse” test if H, insured, names mistress or child from previous marriage as beneficiary

B.    “Illusory Trusts” – if one spouse uses CP to create  a revocable trust and also retains power to control it, it is illusory and can be set aside by other spouse

VII.          Management Powers and creditor’s rights

A.    Effect of divorce on preexisting creditors

1.     Divorce does not affect rights of preexisting creditors

2.     If both spouses sign a note, both will be liable.

3.     Judgment liens imposed after divorce not affect CP set aside for other spouse

4.     Bank’s option is to seek a constructive trust imposed on the property – action must be in rem and against property in other spouse’s hands since action against spouse is not possible.

B.    Classification of Marital Property for management purposes

1.     Different classifications

a.     W’s SP

b.     W’s Sole Management Community – W’s salary, income from W’s separate property

c.     Joint Management Community – if sole management properties of the two spouses are mixed, then subject to joint management, control, and disposition

d.     H’s Sole Management Community – H’s income, etc.

e.     H’s SP

2.     Property titled to one spouse’s name (or possession) is presumptively subject to that spouse’s sole management (policy is to protect BFP – imagine painting of H’s SP in W’s office and W sells it – BFP is valid against SP claim)

C.    Liability for Torts – all CP subject to tort liability of either spouse.

1.     Tort committed during marriage by H – can reach all property except W’s SP

2.     Tort committed before marriage by H – can only reach assets over which H had management power (H’s SP, H’s sole management CP, and joint management CP)

D.    Liability on Contracts – each spouse is personally liable for other spouse’s and minor children’s K for necessities.

1.     If not a K for necessaries, creditors can only reach property that debtor has management control over

2.     If H mortgages CP, creditor can reach all except W’s SP and W’s sole management CP.

3.     Liability created for both if one spouse acted as agent of the other