I.

Chapter 1 Basic Concepts ___________________________________________________ 3

A. Spanish system base ________________________________________________________________ 3
B. Two main tests _____________________________________________________________________ 3
C. Special Rules ______________________________________________________________________ 4
II. Chapter 2 Constitutional Boundaries __________________________________________ 6
A. Judicial Division ____________________________________________________________________ 6
B. Private agreements _________________________________________________________________ 6
C. P/E language examples ______________________________________________________________ 7
III. Chapter 3 Basic Characterization _____________________________________________ 8
A. Definitely SP _______________________________________________________________________ 8
B. CP presumption ____________________________________________________________________ 8
C. SP During marriage/SP separation ____________________________________________________ 8
D. Property during marriage __________________________________________________________ 11
F. Making arguments _________________________________________________________________ 12
IV. Chapter 4 Advanced Characterization _________________________________________ 13
A. Oil and Gas _______________________________________________________________________ 13
B. Trusts ___________________________________________________________________________ 13
C. Intellectual Property _______________________________________________________________ 14
D. PI recovery _______________________________________________________________________ 14
E. Retirement benefits ________________________________________________________________ 14
F. Insurance benefits _________________________________________________________________ 16
G. Business entities ___________________________________________________________________ 16
H. Stock options _____________________________________________________________________ 17
I. Goodwill _________________________________________________________________________ 18
J. Disability benefits _________________________________________________________________ 18
K. Social security ____________________________________________________________________ 18
L. Stocks/Dividends __________________________________________________________________ 18
M. Lottery prizes _____________________________________________________________________ 18
N. Future income ____________________________________________________________________ 18
O. Engagement rings _________________________________________________________________ 18
V. Chapter 5 Reimbursement __________________________________________________ 19
A. Balancing marriage books __________________________________________________________ 19
B. Only between CP/SP or HSP/WSP not CP/CP or HSP/HSP or WSP/WSP __________________ 19
C. Requires identifiable asset __________________________________________________________ 19
D. Nonreimbursement (FC 3.409) _______________________________________________________ 19
E. Cost/Enhancement _________________________________________________________________ 19
VI. Chapter 6 Management and Liability _________________________________________ 20
A. Generally ________________________________________________________________________ 20
B. Management categories _____________________________________________________________ 20
C. General/Contract liability ___________________________________________________________ 20
D. Tort Liability _____________________________________________________________________ 21
E. 3P is protected if had no notice ______________________________________________________ 21
F. Limitations on management _________________________________________________________ 21
VII. Chapter 7 Divorce Issues ___________________________________________________ 22
A. Cannot bind non-parties to suit ______________________________________________________ 22
B. Divides both property and debt ______________________________________________________ 22
C. Basic divorce rules _________________________________________________________________ 22
D. Appellate review __________________________________________________________________ 22
E. Homestead _______________________________________________________________________ 23
F. Alimony (Spousal Maintenance) _____________________________________________________ 25
G. Post-divorce property disputes _______________________________________________________ 26

VIII. Chapter 8 Division at Death _________________________________________________ 27
A. Intestacy _________________________________________________________________________ 27
B. Will/Agreement ___________________________________________________________________ 27
C. Non-TX Property __________________________________________________________________ 27
D. Widows Election __________________________________________________________________ 27
IX. Chapter 9 Non-Normal Marriage ____________________________________________ 28
A. Informal Marriage _________________________________________________________________ 28
B. Putative spouse ____________________________________________________________________ 28
C. Meretricious Relationship (Un-Marriage) _____________________________________________ 28
X. Defenses __________________________________________________________________ 29
A. Generally ________________________________________________________________________ 29
B. Pre- and Post-Marital Agreement for P/E of CP ________________________________________ 29
C. Agreement for SP to CP ____________________________________________________________ 29
D. Torts ____________________________________________________________________________ 29
XI. EXTRA ___________________________________________________________________ 30
A. TRIVIA __________________________________________________________________________ 30
B. Some case names should be known: __________________________________________________ 30
C. Maybe learn others for quick reference to semi-major law _______________________________ 30

Chapter 1 Basic Concepts
A. Spanish system base
i) TX adopted parts of Spanish law
(1) Real estate law, including water rights
(2) Civil procedure
(3) Marital property the community property system
(a) Marriage is a sort of partnership 2 people united for a common purpose
(b) Spouses could alter rules to suit themselves by agreement
(c) All business conducted by partnership is for profit of partnership
(d) What you have going into partnership stays yours
(e) Whatever deal you make as a partnership is honored

ii) General Texas Trends: Marital Property and Womens Rights
(1) TX became nation used (CL) Blackstonian theory that H&W were one person -> H
(a) W could get no property, all went to H
(2) Congress originally voted against CP, but one hot day Hemphill confused everyone, so they
voted for CP
(3) 1850s Texas was the most favorable jurisdiction for women in the United States.
(4) 1860s Texas law became less favorable as common law attitudes and management principles
were imported (Smith [p. 12] & DeBlane court [p. 19])
(5) 1920s Texas became more socially conservative (e.g., Arnold court [p. 29]), as the nation
became more liberal
(a) 1925 Arnold eliminated Legislatures right to define SP
(b) 1977 Eggemeyer eliminated trial courts right to divide SP
(6) Today:
(a) Partnership principles predominate nationally
(b) Texas is the worst state for women

iii) Can help policy arguments (binding/persuasive)
(1) CP is minority rule
(a) TX is CP, but minority is growing

iv) Clear and convincing standard of review (FC 3.003 (b))
(1) More than testimony needed (Garza v. Garza)
(a) Live with presumption of divorce and save everything
(b) Need documentation
(2) Unrefuted testimony may be enough
(a) But interested party testimony given little weight

B. Two main tests
i) Onerous efforts (Love v. Robertson, FC 3.003(a))
(1) Inclusive test, if made during marriage, then CP
(2) Ties go to implied exclusion below

ii) Implied exclusion (Arnold v. Leonard)
(1) Exclusive test, if not specifically SP, then CP
(2) SP as stated in Const. is (OGIMAPC)
(a) Owned/claimed before marriage
(b) Gift
(c) Inheritance
(d) Marital Agreements (written)
(i) Heavy emphasis on paper itself, courts dont want to get involved
(e) Other things created by law
(i) Mutation SP to get property retains SP name
(ii) Personal injury money money for SP in PI is SP
(iii) Credit lender agrees to look only at SP
C. Special Rules
i) 3 Main rules, used strictly in order
(1) Acquisition over time (inception of title)
(a) ONE exception is some retirement plans
(2) Acquisition by multiple estates
(a) Proportional ownership
(3) Reimbursement between estates

ii) Tracing
(1) Process by which property (usually SP) mutates from one form to another and stays SP
(a) If not traced, then commingled
(2) Mutation (Love v. Robertson)
(a) Swapping out one property for another

iii) Income (Howard v. York; DeBlane v. Hugh Lynch & Co.)
(1) Profit/income that can be separated from original without harm to original is CP (Dixon v.
Sanderson)
(a) Excludes future income
(2) Examples:
(a) Stock dividends are CP
(b) Lottery winnings are CP
(i) This is a prize, not a OGIAMPC
(ii) Ticket itself may be SP (so keep until divorced)
(3) From Spanish CP law
(a) American CP law is income from SP = SP
(b) TX is minority of CP minority because of this

iv) Mule rule (Stringfellow v. Sorrels)
(1) Natural appreciation in value of SP is not CP
(a) May have reimbursement
(b) Increase in amount of property is CP
(2) Examples:
(a) Stock appreciation is SP
(b) Stock split is SP, same % owned
(c) Retained earnings are SP

v) Insolvency (Dixon v. Sanderson)
(1) May not transfer SP to CP to avoid
(2) TX Fraudulent Transfer Act
(a) Transfer is fraudulent to creditor if
(i) Debtor actually intends to defraud OR
(ii) Not receiving reasonably equivalent value AND
1. Remaining assets too small for current contemplated transaction OR
2. Debtor intended or expected to incur excess debts
(b) Badges of fraud
(i) Insider
(ii) Insider cut-out
(iii) Concealment
(iv) Debtor keeps property
(v) Skips town
(vi) All-asset transfer
(vii) Litigation threat
(viii) Insolvent or close
(ix) Proximate debt
(x) Equivalent value transfer to insider

vi) Proportional ownership
(1) HSP and WSP - % of each
(2) SP and CP - % of each (CP is then shared just and right)

vii) Non-Texas property?
(1) For divorce only, pretend everywhere is Texas
(a) Doesn't matter where you acquired the property
(b) If you leave TX, then TX no longer applies
(2) If you die, than go back to that state to see how it was characterized

II. Chapter 2 Constitutional Boundaries
A. Judicial Division
i) Judge cant divest SP (Eggemeyer v. Eggemeyer)
(1) Rationale for decision (use on test)
(a) Legislature did not intend to omit language
(b) FC lets SP be administered for child support, but not spousal support
(c) Statutory power to divide Estate of the parties just means power to divide CP
(d) Creates SP in a way not permitted by Constitution
(e) Federal Due Process violation
ii) Divesting CP if fine if not abuse of discretion (Whorrall v. Whorrall)

B. Private agreements
i) Const v. statute on agreements

ii) Types of agreements
(1) Partition and Exchange Agreement
(2) Alimony/Maintenance Agreements
(3) Agreements to Change Character of Property
(a) Convert SP into CP (post-marital).
(b) Convert CP into SP (post-marital).
(c) Waive Homestead Rights.
(d) Agree in advance to division of property at divorce (pre-marital).
(e) Agree that income from SP will remain SP (post-marital).
(4) Incident to Divorce Agreements
(5) Trust Agreements
(6) Agreements Regarding Children
(a) CANNOT alter child support below statute
(b) Any agreements regarding children are subject to the high scrutiny of the Court.
(7) Courts will uphold all other written agreements b/t spouses

iii) Definitions
(1) Partition split CP into 2 SPs
(2) Exchange to trade one CP for another CP to get SP

iv) Issues:
(1) Spouse agreement
(a) Constitution: Yes
(b) FC: Partition or exchange (in this order)
(2) Unmarried agreement
(a) Constitution: Partition or exchange
(b) FC: Yes
(3) Unmarried income
(a) Constitution: Partition or exchange property to be acquiredincome?
(b) FC: Yes
(4) Know differences and language
(a) FC allows you to agree on everything as a spouse
(b) FC allows you to pre-agree on all but child support
(c) Constitution allows all, but must P/E if unmarried

v) Post Beck (1980), income from SP can be agreed upon
(1) Cite to family code for premarital agreements and once married, redo agreement with a
marital/post-nuptial agreement.
(2) Professor likes premarital agreement stuff for exams know Beck and Dokmanovic
(a) Beck stated 1980 Const. Amend. was retroactive to PMA pre-1980

C. P/E language examples
i) Good
(1) Dokmanovic
(a) Shall remain separate property
(b) Shall be treated as separate property
(2) Fanning
(a) Is and shall remain the separate property
(i) Regarding income into SP account
(3) Beck
(a) All property shall be considered as SP
(4) Winger
(a) Waive all rights to CP
(b) Reserve full ownership in property listed
(5) Paulsen says
(a) use the word partition, and use we hereby exchange, agree, partition, and bifurcate

ii) Bad
(1) Fanning
(a) PMA referenced Constitution regarding spouses
(i) Invalid because agreement dealt with pre-spouses, not spouses
(2) Bradley
(a) Will partition each year in the future
(i) Cant require future action

III. Chapter 3 Basic Characterization
A. Definitely SP
i) Property acquired before marriage
ii) Property gained post-divorce
iii) Constitutional exclusion (OGIMAPC)

B. CP presumption
i) Commingled = CP presumption
ii) During marriage = CP presumption
iii) Paid off w CP = CP presumption
(1) Onerous efforts
(a) Time, toil, effort

C. SP During marriage/SP separation
i) Refuting CP presumption (to get SP)
(1) Tracing SP testimony + documents (clear convincing)
(a) Establishing the separate origin of the property through evidence showing the time and
means by which the spouse originally obtained possession (Zagorski v. Zagorski)
(b) Types of tracing
(i) Classical one item for another
1. Formal chain of title not necessary (Maple v. Nimitz)
(ii) Value follow fungible assets through accounting
1. More recent test, less tested
(c) Presumptions in value tracing
(i) Community out first presumption (Hill v. Hill)
1. SP sinks to bottom
2. Black letter for BAR
(ii) Clearing house/identical sum
1. Deposit and quick withdraw rebuts CP out first
(iii) Minimum sum balance
1. Lowest amount above zero retains SP
2. SP amount does not increase unless more SP deposited
3. If 0 reached, no SP ever exists
(iv) Dollar for dollar account
1. Show each and every dollar deposited/withdrawn
2. Need more than mere possibility of source (Latham v. Allison)
(v) CP insufficient for purchases, so had to use SP
(d) Methods of rebutting CP out first
(i) May use trust theory trustees property used first (Silbey v. Silbey)
1. Equity imposes constructive trust of CP
2. Thus, trustee funds (HSP) come out first to avoid breach of trust
3. If both H & W have SP in account, use proportional account
(ii) This is backwards from general CP presumption at divorce
(iii) But Sibley is terrible case
1. Did not apply their own rule
2. Butchers marital property law
3. Not clear/convincing case
(iv) 1987 clear/convincing statute designed to eliminate CP out first

(2) Inception of title
(a) Look to when deed/contract signed (Evans v. Ingram; Marriage of Murray)
(i) When the RIGHTS accrue
(ii) Improvements to land by community are SP with reimbursement (Welder v. Lambert)
(iii) In both names makes it CP (Duke)
(b) Argue gift if both names on deed
(i) HSP before marriage, deed after
1. Wife on K before marriage using HSP, presume gift
2. Wife on K after marriage using CP, presume gift
(ii) HSP AND deed before marriage
1. Mentions both on K, presume cotenants
2. Can argue gift because wife is on K
(c) Future earnings/rights are SP (Loaiza v. Loaiza)
(i) If rights have not yet vested
(ii) Must vest during marriage
(d) Examples
(i) Homestead right time of settlement determines character
(ii) Adverse possession right accrued after running of SOL
(iii) Life insurance right incepts when policy is acquired
(iv) Disability benefits determined when loss of earning occured

(3) Gift
(a) Gift elements:
(i) Intent
(ii) Delivery
(iii) Acceptance
(b) Gift to community SP each
(i) Must be to community, not one spouse
(ii) To one spouse as CP not enough
(c) Can convey to spouse, SP gifted spouse
(i) Presumption, can be rebutted by no intent
(d) Significant recitals (no parole evidence)
(i) H must be involved AND
1. Shows notice and implied assent
(ii) Must be recited to W as her SP
(iii) Otherwise parole evidence allowable
1. Can use equitable grounds to get around this
2. I.E. Fraud/mistake/duress/etc.
(e) Close family presumes gift
(i) Refute with parol evidence
(ii) Presumption valid before because
1. Women had no managerial rights
2. Clear and convincing statute had not been enacted
3. Now, requires SP claim to prove it
(f) Spousal gift includes income from SP
(i) Rental house gift includes income from rent
(g) Cannot create agreement after deed is taken

(4) Mule rule, increase in SP is SP

(5) Separate credit can agree only to look to HSP/WSP
(a) Unconstitutional Violates Arnolds implied exclusion rule (p. 323)
(b) Inconsistent with MP theory Use of SP land to secure credit is like use of SP land to
generate rent; should be CP
(c) Unworkable Provides no answer in one common situation; circular reasoning

ii) Defenses to SP (to get CP)
(1) Tracing
(a) Not clear/convincing
(b) Integrated beyond separation
(c) Conflicts in favor of CP
(i) Conflicting testimony supports CP
(d) Must be more than possibility of SP as source

(2) Inception of title
(a) Not clear/convincing
(b) More than mere expectancy
(c) Title in both names is CP
(d) Title acquired during marriage is CP
(3) Gift
(a) Consideration
(i) Low/high
1. The more paid, the less presumption of gift
(ii) Paid from CP
1. If paid from CP, must have been for CP
(b) No intent
(i) Need more than interested witness
(c) Can argue that clear/convincing statute eliminated presumption altogether
(i) Old rule only required, I had no intent
(ii) The gift presumption is an artifact from another century that doesn't make a lick of
sense today (Paulsen)
1. Usually H SP to W
2. IF other way around, usually presumed to be fraud by H
(iii) The intent of the Family Code is there IS NOT GIFT PRESUMPTION.
1. Wrong century
2. Wrong burden of proof
3. Presumption of gift
4. How much to dislodge that presumption
a. Any evidence and presumption goes away
b. A disappearing presumption
5. The RULE is to demonstrate knowledge
a. Know there are gifts and know the elements

(4) Mule rule
(a) Not increase
(i) Is profit
(ii) Is income

(5) Separate credit rule
(a) Creditor looked to HSP
(b) Need clear/convincing (more than testimony)
(c) Problems w/ Separate Credit SP
(i) Unconstitutional Violates Arnolds implied exclusion rule
(ii) Inconsistent with MP theory Use of SP land to secure credit is like use of SP land to
generate rent; should be CP
(iii) Unworkable Provides no answer in one common situation; circular reasoning

iii) Rebuttal to Defenses (to get SP)
(1) Gift
(a) Lack of intent not clear and convincing (new rule)
(b) Nominal consideration is fine between close family members
(i) Thus could still be SP
(c) If still SP, try reimbursement (below)

D. Property during marriage
i) Rebutting presumption of CP (to get SP)
(1) Tracing
(a) Same as above
(2) Inception of Title
(a) Same as above
(3) Gift
(a) Same as above
(4) Increased value
(a) Same as above
(5) Separate credit rule
(a) Same as above

(6) Proportional ownership
(a) If CP and SP mixed on payment of property presume CP/SP both
(i) Divided up based on % of each
(ii) Example
1. House is 50K
2. 20K SP down payment
3. 30K CP paid off
4. Owned 2/5 SP, 3/5 CP

(7) Reimbursement right
(a) CP used on SP, can get some back
(b) If SP used to enhance CP
(i) Reasonable efforts used to maintain
(ii) No reimbursement
(c) Synthesis of case law:
(i) SP contributed to SP
1. Cost
(ii) SP contributed to CP
1. Cost
(iii) CP contributed to SP
1. Enhancement

E. Clear/convincing standard
i) Codified in 1987
(1) Previously, was whatever standard courts chose
(2) Could have email and testimony very lenient (Zagorski v. Zagorski)

ii) Heightened standard on appeal too
(1) Factual sufficiency
(a) Preponderance verdict is so against the great weight and preponderance of the evidence
that it is manifestly erroneous or unjust
(b) Clear convincing consider all the evidence and whether trier of fact could reasonably
conclude that the existence of the fact is highly probable

(2) Legal sufficiency
(a) Preponderence the evidence was enough to enable reasonable and fair minded people to
reach the verdict
(b) Clear convincing consider evidence in favor of verdict and look to whether a reasonable
trier of fact could have formed a firm belief or conviction in their finding

F. Making arguments
i) Distinguish facts
ii) Narrow holding, state court did not address your issue
iii) Argue analogous area of law is applicable
iv) Your case has been consistently followed
v) Your case is consistent with objective/policy of law/statute using
(1) Plain meaning
(2) Other courts interpretation
(3) Outside jurisdiction with similar statute
(4) Result wanted is consistent with intent/objective of law
vi) Adverse authority has been criticized
(1) TXSC agreed/disagreed
vii) Policy

IV. Chapter 4 Advanced Characterization
A. Oil and Gas
i) Definitions
(1) Mineral interests include 5 sticks (property rights)
(a) Right to develop
(b) Right to execute leases (administrator)
(c) Right to royalties
(d) Right to bonus
(e) Right to delay rentals
(2) Royalty % payment on production (sale of realty)
(3) Bonus consideration paid for lease of mineral land (sale of realty)
(4) Delay rental payment made in lieu of drilling (sale of realty)
(5) Working interest portion of lease not reserved as royalty, i.e. the mineral interest granted to
lessee
(6) Overriding interest essentially a royalty from lessee to another (usually how the lessee pays
others)
(7) Production payment the right to receive a portion of the production (a set amount, as opposed
to the overriding interest)

ii) Production/sale of realty is SP if traced
(1) Royalties
(2) Bonus
(3) Delay rentals
(a) But CP because just rental payments (Norris v. Vaughan)

iii) Working interests
(1) Before marriage SP
(2) During marriage CP

iv) Overriding interests
(1) Before marriage SP
(2) During marriage CP

v) Production payments
(1) Before marriage SP
(2) During marriage CP

B. Trusts
i) Spouse as trustee
(1) No property right
(2) Trust only gives legal right to title

ii) Third party created
(1) Corpus SP
(2) Undistributed income is SP (Marriage of Long)
(a) Distributed income considered a gift SP
(b) If undistributed but right acquired, its CP
(3) Can be CP under implied exclusion (In re Long case)
(a) Look to trust language

iii) Trust created by spouse
(1) Income is CP
(2) Corpus follows origin SP->SP, CP->CP

C. Intellectual Property
i) Use inception of title
(1) 3 theories
(a) When concept sufficiently developed to generate plan to build
(b) Invention actually built
(c) On effective date of patent

ii) Patent in name of one is CP if during marriage

iii) Income/royalties are CP

D. PI recovery
i) SP
(1) Past/future pain and suff.
(a) Could argue onerous efforts (helped spouse recover)
(2) Disfigurement
(a) Your body is yours (Graham v. Franco)
(3) Mental suffering
(4) Loss of consortium (McGovern v. McGovern)
(a) Can argue no consortium without the community
(5) Tort damage for pre-marriage claim
(6) Disability before marriage (Lewis)

ii) CP
(1) Medical expenses (unless paid before payout traced to SP)
(2) Lost wages
(3) Loss of earning capacity
(4) Disability during marriage (Lewis)
(5) Punitives
(6) Pre- and Post-judgment interest (proportional for part during marriage)

iii) Requires clear/convincing
(1) Must segregate all SP from CP or presumed CP (Kyles v. Kyles)
(2) Must show amount for each category claimed

iv) Issue with disfigurement
(1) Lewis requires CP if earnings during marriage
(2) However, FC 3.008 says proceeds retain property character, so body is SP
(3) Now, use FC

E. Retirement benefits
i) Definitions
(1) Defined Contribution
(a) funded by contributions of a specified amount that are invested or placed in a trust fund
Shanks, citing Brown
(i) Usually a payment by employee is matched by employer
(b) A savings account (maybe)
(i) Example: Pelzig
(2) Defined Benefit
(a) future benefit based on a specified formula that often takes into account earnings, length
of service, or both Shanks, citing Brown
(i) Usually additional payments for great work done, incentives to work hard
(b) A promise
(i) Example: Everything but Pelzig

ii) Generally
(1) Retirement is not an expectancy but is a contingent interest
(2) Unearned part is deferred payment, is CP (Cearley)
(3) Benefits accrued prior to marriage is SP (Taggert)
(a) Need clear/convincing
(4) Post-divorce COLA/change in plan is CP (Grier)
(5) Post-divorce increase for compensation is SP (Berry)
(a) If CP, then reducing fraction
(6) Know development of benefit formulas
(a) Dont need to know ERISA stuff
(i) ERISA does not preempt QDROs (qualified domestic relations order, which gives
non-employee spouse right to other spouses benefits)

iii) Defined contribution plan formula
(1) Proportional to years married
(2) Formula: (Pelzig v. Berkebile)
(a) Balance at divorce MINUS
(b) Balance at marriage date
(c) % B
d
B
mu

(d) *% means just/right percentage (usually )

iv) Defined Benefit plan
(1) Either both fractions are retirement OR divorce, cant have one of each
(2) Applies before or after retirement
(a) Taggert is only before
(i) *Usually use Taggert if retired before divorce
(b) Used if wife can still work
(3) Current formula will probably include COLAs
(a) Not needed for bar though
(i) DO use for class (Phillips v. Parrish; Grier v. Grier; Shanks v. Treadway)
(ii) Berry and Grier support COLA
(b) Dont include Grier or Shanks
(4) Formulas:
(a) No dispute or Retire before divorce
(i) %* TIMES
(ii) FRACTION of PLAN
1. # months during marriage OVER
2. # months in total plan TIMES
(iii) Value of plan
(iv) %
Months
mcr
Months
plcn
Ioluc
pIun

(v) *% means just/right percentage (usually )

(b) Dispute or Retire after divorce
(i) %* TIMES
(ii) FRACTION of PLAN
1. # months during marriage OVER
2. # months in total plan TIMES
(iii) Value of plan
(iv) %
Months
mcr
Months
di
Ioluc
d
+ C0IA.
(v) *% means just/right percentage (usually )
(vi) **Essentially assume retired at divorce

v) Retirement bonus/severance pay
(1) CP if compensation
(2) CP if payment for early retirement
F. Insurance benefits
i) Non-life insurance
(1) CP if paid by CP and covers CP

ii) Casualty loss
(1) Takes on asset that got casualty, SP->SP CP->CP

iii) Disability/Workers Comp
(1) CP to extent replaces earnings (similar to PI)

iv) Life insurance
(1) Inception of title
(a) Reimbursement for CP payments on premiums
(b) Premiums paid by employer are considered income, the policy is CP
(2) Need to redesignate spouse after divorce
(a) Otherwise goes to alternative beneficiary
(3) Cash value bought during marriage is CP
(4) If on life of 3P is CP if during marriage
(a) H/W buys for 3P
(b) W/H is beneficiary
(c) Payout is CP

v) Division at Divorce
(1) Goes to property holder
(a) If proportionally owned, use that %
(2) To person insurance relates to for health/life

vi) Notes
(1) Whole life insurance
(a) Probably treated like savings account if still alive
(b) Definitely valuable
(2) Distinction from property and casualty
(a) Non-PI awards are compensatory and follow underlying property SP->SP, CP->CP
(i) Mutation, with possible reimbursement
(b) Characterization codified in FC 3.008(a)
(3) Annuities A contract sold by an insurance company designed to provide payments to the
holder at specified intervals, usually after retirement
(a) Another hybrid; Pelzig
(4) FC 9.301 change of beneficiary
(a) Presumption of change to estate at divorce
(b) But ERISA trumps Texas marital property law.
(i) As a practical matter, because of the federal involvement with most retirement plans,
QDRO (qualified domestic relations order) require specific language for ERISA.
(ii) Divorce decrees must be written in a way to satisfy federal regulations.
(iii) Typically, a court order is required to put in the retirement benefits file to explain what
needs to be done down the road

G. Business entities
i) Corporations
(1) CP presumption
(a) Shares are SP, then remain SP
(b) Inception of title
(i) When right accrues, not possession
(c) Tracing
(i) SP capital makes shares SP
(d) Can get reimbursement though (Vallone)
(i) Useful with closely held corporations
(ii) T/T/E increase in SP stock can have reimbursement (stays SP)
1. If CP used
2. If beyond spouses efforts/labor
3. However, does not create community interest
(iii) Must specifically plead reimbursement

(2) Can attack with
(a) Fraud/Alter ego
(i) Fraud intent to deceive
(ii) Alter ego such unity between entity and individual that they cease to be separate
(b) Transforms SP to CP
(c) Ignores corporate form

ii) Sole proprietorship
(1) Essentially entity is ignored and basic principles apply
(2) SP remains if done before marriage
(3) Income is CP
(a) Ignore future income

iii) Partnerships
(1) TUPA applies partnership is entity
(a) Entity gets all things, thus nothing is CP
(i) Property not CP
(ii) Judge cant touch entity property
(iii) Right to management not CP
(b) Except interest in partnership, will be SP
(i) Spouse gets assignee right only
1. No right to manage
2. Only right to get payout (including future)
(c) Distributions during marriage are CP

(2) Old rule partnership was aggregate
(a) Similar to sole proprietorship
(b) Nothing goes to entity, so all is CP

iv) Arguments from other spouse
(1) CP because profit from SP
(2) H Can rebut with mutation (return of capital)

H. Stock options
i) Definitions
(1) Option date date option is created
(2) Grant date date option given to spouse
(3) Marriage date date married
(4) Divorce date date divorced
(5) Payment date date payment given

ii) Formulas
(1) Before marriage
(a) Option date until marriage PLUS
(b) Divorce date until grant ALL OVER
(c) Option date to payment
(d)
otc
opt-mu
+otc
d-gunt
otc
opt-pu


(2) After/During marriage
(a) Divorce date until payment OVER
(b) Grant date to payment
(c)
otc
d-pu
otc
gunt-pu


I. Goodwill
i) Degrees not divisible (not property)
ii) Goodwill divisible only if separate from skills (Guzman v. Guzman)
(1) Can be limited by agreement
iii) Two prong test (Nail v. Nail; Geesbreght v. Geesbreght)
(1) Does goodwill exist independently of personal ability of spouse
(2) Does goodwill have commercial value that the community estate is entitled to share

J. Disability benefits
i) During marriage is CP
ii) Entire disability before marriage, SP

K. Social security
i) SP

L. Stocks/Dividends
i) Dividends in cash are CP
ii) Stock split is SP (mule)
iii) Merger dividends are SP (mutation)
iv) Mutual fund dividends are CP
(1) Reinvested capital gains are SP
(2) Distributed capital gains are SP (return on capital)

M. Lottery prizes
i) Prize, not OGIAMPC, so CP

N. Future income
i) SP

O. Engagement rings
i) Qualified as a conditional gift subject to good faith towards marriage
ii) SP of W unless
(1) W is shown to be at fault for break up
(2) W signs a written agreement that waives her right

V. Chapter 5 Reimbursement
A. Balancing marriage books
i) You get back what you put in (Schmidt v. Huppman; Harlock v. Harlock)

B. Only between CP/SP or HSP/WSP not CP/CP or HSP/HSP or WSP/WSP

C. Requires identifiable asset

D. Nonreimbursement (FC 3.409)
i) Reasonable effort to maintain SP (nominal CP paid on SP)
ii) Payment of child support
iii) Living expense of spouse or child of spouse
iv) Contribution of nominal value
v) Payment of nominal liability
vi) Student loans of spouse

E. Cost/Enhancement
i) Initial balance look to cost (Schmidt)

ii) T/T/E uses Jensen formula
(1) Jensen formula on PPT
(a) Positive side
(i) Owner efforts
(b) Negative side
(i) Reasonable efforts
(ii) Salary non-objectionable
(iii) Bonuses non-objectionable
(iv) Dividends (extra credit to point this out)
(v) Other fringe benefits non-objectionable
(c) Gives CP reimbursement
(i) Make sure to state the measure of reimbursement

iii) Improvements look to enhancement value (FC 3.402; Anderson v. Gilland)
(1) Used to be lessor of either (Lindsay v. Clayman)

iv) Debt payoff look to either cost or enhancement (Penick)
(1) Deals with cost vs. enhancement
(a) Consider the fairest measure

(2) Favoring Enhancement
(a) Analogous to Anderson and Jensen
(b) Dollar for dollar accounting inconsistent with equitable approach in Anderson
(c) Payment of debt and improvement are similar, so same measurement

(3) Favoring Cost
(a) Tax benefits offset sums advanced by community to reduce principle of debt
(b) Dakan provided reimbursement for advances at cost to contributor
(c) General rule that contributor need not show enhancement to get reimbursement

(4) Courts thoughts
(a) Most are now enhancement
(b) Dallas is cost but weak
(c) Eastland/Tyler are unknown

VI. Chapter 6 Management and Liability
A. Generally
i) Separate rules and analysis from characterization
ii) Legislature can set up rules for how property is managed during marriage
iii) Abuse of management is generally a breach of trust
iv) 3P can sue H or W, but not the community
(1) Judge/jury sorts out liability
v) Not liable on any instrument unless signature appears (FC 3.201(c); Latimer v. City National
Bank)
vi) No such thing as community debt
(1) Debt follows property

B. Management categories
i) SP
(1) Each controls their own (FC 3.101)

ii) SMCP
(1) Control CP that would have been SP if single (FC 3.102(a))
(a) Can sue/be sued without other spouse joined (may still join)
(b) If only one spouse works, SMCP is all theirs
(2) Authority needed unless agency found
(a) Cockerham agency found, no authority needed
(b) Nelson no agency found, authority needed
(c) Joint enterprise case factors:
(i) Agreement amount members
(ii) Common purpose
(iii) Community of pecuniary interest
(iv) Equal right of direction/control

iii) JMCP
(1) Commingled SMCP or any other CP
(a) This is presumed until proven SMCP
(b) Both spouses have equal control
(c) Includes:
(i) Property acquired with joint credit
(ii) Frozen embryos
(iii) Earnings of children (FC 151.001(a)(5))
(2) Title in both names
(3) Split in authority
(a) Some say none
(b) Some half
(c) Some say must agree on all
(d) *(state that there is a split and what it is)
(4) May convert JMCP -> SP
(a) Must have agreement of other spouse (Marriage of Morrison)
(b) Good to always have both spouses sign conveyance (meets all authorities)

C. General/Contract liability
i) 3P goes only from SP to JMCP, not other SMCP
ii) Can go past if
(1) Contract for necessary
(2) Acting as an agent
(a) Need more than simply being married

D. Tort Liability
i) Joint enterprises
(1) Can go to all but other spouse SP
(2) Pecuniary purpose (commercial)

E. 3P is protected if had no notice
i) Presumed SMCP if in that spouses name
(1) Mild presumption, any contrary evidence enough to rebut

ii) 3P can rely on authority if
(1) Property presumed subject to SMCP AND
(2) 3P is
(a) Not a party to fraud on other spouse AND
(b) Does not have actual/constructive notice of lack of authority

F. Limitations on management
i) 3P not liable for fraud by spouse of SMCP unless other spouse has interest in it (Medenco v.
Myklebust)

ii) Spouse recovers based on contract regardless of partition/divorce
(1) Old rule was spouse may not benefit from other spouses crime
(a) Needed SP interest in policy property to recover
(2) Now, only recover the innocent spouses portion
(a) BUT, court says insurance companies can amend contract to preclude all insureds

iii) Actual/constructive fraud (fact issue)
(1) Actual intent to deprive of liability
(a) TXSC never held proof of actual necessary to avoid excessive or capricious gift
(b) Elements
(i) Material representation
(ii) False
(iii) Knowing or reckless
(iv) Reliance
(v) Damages
(2) Constructive
(a) Elements (Givens v. Girard Life Ins. Co. of America)
(i) Size of gift compared to total community estate
(ii) Adequacy of remaining estate to support spouse
(iii) Relationship between donor and donee
1. Gift to 3P is presumptively constructive fraud
(iv) Special circumstances justifying gift
(b) Precluded in business statute
(3) Beneficiary has burden to justify CP gift

VII. Chapter 7 Divorce Issues
A. Cannot bind non-parties to suit
i) If divorced, must sue both spouses to attach both property (Cooper v. TX Gulf Industries)
(1) Rights of W with regard to that property may only be affected by suit which W is called to
answer.
(a) Neither spouse may virtually represent the other.
(2) Was W indispensable to prior suit?
(a) Court says no, it was proper to resolve issues in prior suit without W in this case.

ii) Creditors may intervene in divorce proceeding

B. Divides both property and debt
i) Secured creditor lien remains with property
ii) Unsecured creditor need a judgment against the correct spouse

C. Basic divorce rules
i) Can either agree (preferred by judges)
(1) Agreement rules apply
(2) Must be just and right (FC 7.006)
(3) Can divide CP and SP

ii) Or contest with judge (or jury)
(1) Must be just and right (FC 7.001)
(a) May have to prove fraud to overturn
(2) Use Murff factors
(a) Fault
(b) Disparity of earnings or earning capacities
(c) Benefits innocent spouse would have derived from continuing marriage
(d) Business opportunities
(e) Education
(f) Physical condition
(g) Financial conditions and obligations
(h) Disparity of ages
(i) Size of separate estates
(j) Nature of the property
(k) Allocation of attorney fees
(l) *Helps determine just and right
(3) If jury trial
(a) Jury characterizes
(b) Judge divides

iii) Other decrees?
(1) Temporary orders (FC 6.502)
(2) TROs (FC 6.501)
(3) These last up to 14 days and then you need a hearing

D. Appellate review
i) SP divested is harmful error = immediate reversal
ii) CP divested is abuse standard
(1) Look to Murff factors
(2) Significant error is not discretionary (McElwee)
iii) Render or remand?
(1) Can ignore small problems with CP but NOT with SP
(2) Cant divide property themselves

E. Homestead
i) Types of Property
(1) Urban
(a) Property which, at the time of its designation, is located within a municipality and is
served by police and fire protection as well as three of the following municipality services:
electric, gas, sewer, storm sewer, and water.
(b) Limited 10 ten acres
(c) May combine contiguous lots, but subject to the size limit

(2) Rural
(a) Limited to 200 acres
(b) A single adult is limited to 100 acres.
(c) No definition of rural homestead in Property Code.
(i) Essentially anything that is not urban

(3) Business
(a) The definition of urban homestead includes lots used for both an urban home and a
place to exercise a calling or business.
(b) To get exemption from this, must use for urban family home as well

ii) Types of Persons
(1) Family
(a) Family is defined as a relationship by blood or marriage in which two factors are present.
(i) The head of the family has a legal/moral obligation to support other members
(ii) The other members are dependent on the head of the family for support.
1. Includes common law marriage but not unrelated persons
2. A divorced father of 3 sons may maintain a family homestead if he shows these
(b) Property claimed must be used for the purposes of a home, or as both an urban home
and a place to exercise a calling or business, of the homestead claimant.
(c) Improvements and fixtures to land are also included
(d) Unmatured crops/minerals are also treated as part of homestead realty
(i) Once they are harvested/removed, then they go from realty to personal

(2) Single Adult
(a) Someone separated but not divorced is not a single adult
(b) Limited to 10 urban acres, 100 rural acres

(3) Surviving Spouse
(a) Upon the death of either the husband/wife/both, the homestead property shall descend
and vest in like manner as other real property of the deceased. Prob. Code 283.
(i) Can use as homestead as long as treat it as such
(ii) Cant eliminate this right through divesting in a will either

(4) Surviving Minor Children
(a) The surviving minor children are entitled to a constitutional survivors homestead
(i) Cant remove this right by will
(ii) Parents can still screw it up while alive, though, and pass on liability

iii) Benefits
(1) Creditor protection (while alive)
(a) Generally not subject to attachment, execution, or forced sale by creditors.
(b) Must reinvest within 6 months of sale of home to keep protection, nine exceptions:
(i) Purchase Money Liens
(ii) Ad Valorem Taxes
(iii) Mechanics and Materialmans Liens
(iv) Owelty of Partition Lien
(v) Refinancing
(vi) Home Equity Loan
(vii) Reverse Mortgage
(viii) Manufactured Home Refinancing
(ix) Preexisting Lien
(2) Creditor protection (after death)
(a) Homestead exemption passes to survivors
(3) Special Occupancy Rights
(a) Surviving Spouse
(i) A survivors homestead lets you stay there as long as you want
(ii) Only lasts as long as house is occupied/used
1. Dont have to reside there to be considered using
2. For example, the survivor could rent the land
(iii) Get all rents and revenues as well as occupancy rights
1. Still required to pay taxes and maintain the home with no reimbursement
(b) Minor Children
(i) If both parents die, kid could get it
(ii) Lasts as long as they are minors
1. If youre just an unmarried bum at home, too bad
(4) Tax Savings
(a) Single adults and families are allowed $3,000 exemption
(b) Adults also get $15,000 exemption towards school taxes

iv) Designation
(1) No formal designation required, protection arises with evidence of intent to use/occupy as
such
(2) Formal designation has two requirements
(a) Description sufficiently identifies property
(b) Description contains statement that property is to be homestead
(c) If rural, must also include acreage
(i) If multiple surveys, include amount in each

v) Abandonment
(1) Protection is lost upon abandonment as primary residence
(2) Elements
(a) Discontinued use
(b) Intent to permanently abandon

vi) Transfer/Conveyance
(1) Must have both spouse to sell/convey/encumber home
(a) Doesnt matter if CP or SP

F. Alimony (Spousal Maintenance)
i) Policy against permanent alimony (Cameron)
(1) Might be natural consequence of CP system
(2) No alimony per se, but there is spousal maintenance
(3) Passed to help keep people off of welfare

ii) Exceptions
(1) Temporary (FC 6.205)
(a) Pendent lite (pending litigation)
(b) Under a temporary order to pay

(2) Contractual (Francis)
(a) Can incorporate into final decree
(b) Enforcement limited, no contempt for violating

(3) Spousal maintenance (1995 statute)
(a) Violence within past 2 years?
(i) Requires conviction/deferred adjudication
(ii) Requires showing of actual violence

(b) Married 10+ years?
(i) Insufficient property?
(ii) Cant earn?
(iii) Diligently searched?
(iv) Disabled spouse/child

(c) Time limit
(i) 3 year generally
(ii) No limit if disabled spouse/child
(iii) Lasts until death/remarried/cohabitate

(d) Look to discretionary factors for maintenance (FC 8.052)
(i) Financial resources of souses and ability to meet needs
(ii) Education and employment skills
1. Time needed to acquire training/education
2. Availability of training/education
3. Feasibility
(iii) Duration of marriage
(iv) Age/employment history/earning ability/physical and emotional condition
(v) Ability of spouse to meet maintenance requirements
1. While paying their needs
2. While paying child support
3. And while paying personal needs of other spouse
(vi) Acts of fraud/concealment of either spouse
(vii) Financial resources of spouses (medical/retirement/insurance)
(viii) Contribution of spouse to education/training to other spouse
(ix) Property brought to marriage by spouses
(x) Contribution as homemaker
(xi) Marital misconduct of seeker
(xii) Effort of spouse to pursue employment counseling

(e) Amount paid
(i) Max is $2,500 or 20% of income
(ii) Can reduce time
(iii) Can only reduce amount (no increases)

G. Post-divorce property disputes
i) Property must be divided by court at divorce
(1) Personal property (FC 9.003)
(a) Must enforce within 2 years of judgment
(b) Or 2 years after property comes into existence
(2) Real estate
(a) Usually easily divided at divorce after characterization
(3) If property NOT divided at divorce
(a) Tenancy in common
(i) Has 4 year SOL after repudiation
(b) Suit to divide must be done within 2 years after repudiation
(i) Divided just and right with attorneys fees (FC 9.201)

VIII. Chapter 8 Division at Death
A. Intestacy
i) Driven by CL
ii) CP
(1) No kids/shared kids all CP to wife
(2) Other kids split 50/50 with wife (75% wife 25% kids)
iii) SP
(1) No kids/shared all real property, personal
(2) Other kids 1/3 of real and personal
(3) No heirs, all remaining

B. Will/Agreement
i) If valid, it controls
ii) Able to transfer all of their SP and of CP
(1) That is all they own

C. Non-TX Property
i) Assume laws of acquisition state apply

D. Widows Election
i) Anything contrary to W/Hs true rights (above)
(1) I.E. when dead spouse disposes of more than his/her share of CP
(2) Applied on item-by-item basis
ii) She can elect to either stick with the will or take CP

IX. Chapter 9 Non-Normal Marriage
A. Informal Marriage
i) Factors (FC 2.401)
(1) Agreement
(2) Lived together in TX as H/W (cohabitate)
(3) Holding out as married
(4) *Present intent of parties irrelevant
(a) Can still find informal marriage even if both parties now deny
(b) Only requires preponderence

ii) May cause inception of title issue (when did all three elements occur)

iii) 2 main uses
(1) Declaration from court to gain benefits of married couple
(2) Upon breakup to attack CP
(a) Presumption of agreement for common law marriage
(i) 2 year SOL destroys presumption
1. *1989 law created 1 year, but was found unconstitutional in 1997
(ii) Just makes it harder to prove (reverse presumption: no agreement)

iv) There is no CL divorce, but can be terminated by
(1) Death of a spouse
(2) Legal decree (like divorce decree, but not)

B. Putative spouse
i) All marriages are valid (FC 1.101)
(1) Only one valid marriage at a time
(a) But can mistakenly have multiple wives
(2) Most recent presumed valid (FC 1.102)
(a) Can rebut to show not divorced from prior

ii) Putative spouse if
(1) Good faith believe
(2) Status lasts as long as good faith stays
(a) Knowledge of prior marriage destroys status
(3) Get rights to property like lawful wife during relationship
(a) Includes right to spousal maintenance
(b) Lose rights to anything after knowledge of prior marriage
(i) Or showing bad faith

C. Meretricious Relationship (Un-Marriage)
i) Cohabitation by persons knowing they are not married
(1) Often exists with homosexual couples

ii) No direct remedy exists for this, but could use other civil remedies
(1) Breach of Trusts
(2) Unjust enrichment
(3) Joint venture liability
(4) Partnership liability

iii) Could get rights using the following
(1) Domestic Partnership agreement
(2) Contractual palimony

X. Defenses
A. Generally
i) Marital property is low level law (second level)
(1) Other laws may trump it
(2) No relevance outside of marriage
(a) Inapplicable to 3Ps
(b) Inapplicable to other areas of law
ii) Agreement rules apply (const. vs statute)
(1) Defenses cumulative of CL before 1987
(2) Exclusive of CL after 1993 (Daniel)
(3) Date of agreement controls
(4) Any part touching child support is invalid as MoL)
iii) Contract rules can apply as well (pre-1987)

B. Pre- and Post-Marital Agreement for P/E of CP
i) Not Constitutional
ii) SoF applies
(1) Must be written and signed (FC 4.002; FC 4.104)
iii) Unenforceable elements (FC 4.006; FC 4.105):
(1) Involuntary signing OR
(2) Unconscionability PLUS (matter of law)
(a) No fair and reasonable disclosure of financial obligations/property of other spouse
(b) No voluntary, express waiver of other spouse property disclosed
(c) Lack of reasonable knowledge of other spouse property

C. Agreement for SP to CP
i) Not Constitutional
ii) SoF applies (FC 4.203)
(1) Must be written
(2) Signed
(3) Describe property affected
(4) Specify described property will go from SP to CP
iii) Unenforceable elements (FC 4.205):
(1) Involuntary signing OR
(2) No fair and reasonable disclosure of warning
(a) Warning is given in FC 4.205(b) only describes legal effect of converting to CP

D. Torts
i) No longer an interspousal tort immunity (Price)
(1) Spouse can now sue in tort for other spouses SP
ii) Cant sue for NIED (Twyman)
(1) Yes for IIED
iii) Cant sue for fraud on community (Schlueter; Chu v. Hong)
iv) Must combine contract and tort
v) Bifurcate to avoid double-dip
(1) Tort tried separate from contracts to get SP and then CP

XI. EXTRA
A. TRIVIA
i) First woman juror in Texas occurred in 1954 (Paulsen's birth year)
ii) Judicial Code Phrases
(1) PHRASE
(a) my learned colleague
(b) the brief is unconvincing
(c) the argument is intriguing
(d) the dissents novel view
(e) our ruling is limited to its facts
(f) with all due respect
(g) obviously
(h) common sense
(2) MEANING
(a) that fool
(b) It couldnt be wronger.
(c) laugh-out-loud funny
(d) What has he been smoking?
(e) Oopsie.
(f) with great disrespect
(g) not at all clear
(h) no legal authority

B. Some case names should be known:
i) Eggemeyer
ii) Arnold
iii) Jensen
iv) Vallone
v) Loaiza
vi) Beck

C. Maybe learn others for quick reference to semi-major law
i) DeBlane (income is SP)
ii) Love (onerous efforts)
iii) Stringfellow (mule rule)
iv) Family Code?
v) Constitution?