matrimonial regimes class

community vs. separate property

i. Civil law = community property ii. Common law = separate property iii. U.S. is mixed between the two 1. 9 states (including LA) are community property

a. Death Effects:

i. Community = equal division ii. Separate = maybe elective share, maybe nothing (will)

. b. Divorce Effects:

i. Community = equal division of community property ii. Separate = equitable division of community property

i. IRA: Individual Retirement Arrangement - another defined contribution plan

1. Major difference between IRA and 401(k): IRA is not typically an employer-provided plan. a. Makes IRA popular among small businesses and self-employed people 2. "Roth IRA" - a variation which makes it opposite of 401(k) and traditional IRAs in that it does not lower the owner's current income tax. a. BUT the payoff is that distributions from a Roth IRA at retirement are not subject to income taxation. b. This makes Roth IRAs popular for young employees whose tax liability is actually lower now than it will be at retirement.

i. Best known Contribution Plan: 401(k) Plan

1. 401(k) plan is an employer created plan created and administered with Section 401(k) of the Internal Revenue Code. 2. They allow employees to reduce tax liability during working years and defer payment of taxes until retirement (when income and tax liability will presumably be lower) 3. Effect: employee designates a certain portion of each paycheck to be added to his 401(k) plan, and in doing so, reduced his taxable income for the year.

i. Spouses can opt-in to the American rule under article 2339 via a Declaration of Paraphenality

1. A spouse may reserve them (fruits) as his separate property by a declaration made in an authentic act or in an act under private signature duly acknowledged. A copy of the declaration shall be provided to the other spouse prior to filing of the declaration. a. 2 ways to do declaration i. Authentic act ii. Private signature duly acknowledged 2. As to the fruits and revenues of immovables, the declaration is effective when a copy is provided to the other spouse and the declaration is filed for registry in the conveyance records of the parish in which the immovable property is located. 3. As to fruits of movables, the declaration is effective when a copy is provided to the other spouse and the declaration is filed for registry in the conveyance records of the parish in which the declarant is domiciled 4. Effect: protects the FRUITS OF SEPARATE PROPERTY and keeps them separate property. ii. Potential reason not to declare under art. 2339: 1. Hard conversation to have since we have to deliver a copy to spouse (even though consent not needed) 2. People don't know it exists, or understand much about civil fruits. iii. Art. 551 1. The usufructuary is entitled to the fruits of the thing subject to usufruct . . . iv. Art. 552 1. A cash dividend declared during the existence of the usufruct belongs to the usufructuary. [Fruit] 2. A liquidation dividend or a stock redemption payment belongs to the naked owner subject to the usufruct. [Not a fruit] 3. Stock dividends and stock splits declared during the existence of the usufruct belong to the naked owner subject to the usufruct. [Depends on the facts] 4. A stock warrant and a subscription right declared during the existence of the usufruct belong to the naked owner free of the usufruct. [Not a fruit] v. Main issue/debate around paraphernality declaration: whether the property in question is properly classified as the fruit of separate property or whether it represents earnings from the effort, skill or industry of a spouse. 1. If fruit: declaration of paraphernality applies and the declared property is separate 2. If earnings: declaration of paraphernality is pointless and the earnings are community a. Ask: did they work to gain the stuff in question or did it happen without effort?

i. Harrell v. Hochderffer

1. Classification of punitive damages depends on the nature of the underlying action.

General fruit v. Earning/Product analysis:

1. Fruit v. Product: look for diminution of the source a. Fruit = subject to declaration b. Product = community property 2. Fruit v. Earning: Look for skill, labor, or industry of spouse vs. function of law or juridical act a. Fruit = subject to declaration b. Earning = community property

i. Allen Sneed Jackson (269)

1. H dies, W1 and W2 fight over the life insurance policy a. W1 claims ownership because she was beneficiary initially and it was community property policy b. W2 is the re-named beneficiary 2. Here: W2 gets the money! Proceeds go to the beneficiary (W2) and community property (policies) go to W1. Here, the policy is worthless because the proceeds were paid out. 3. Issue 1: There is a distinction between ownership of a life insurance policy and ownership of the proceeds of such a policy. a. Ownership of the policy: determined by the marital status of the owner at the time the policy was issued. i. Here: both policies were acquired during the community between H and W1. Therefore the policies are owned by the community between them. b. Ownership of the proceeds (if beneficiary is someone other than the estate of the deceased): belong to the validly designated beneficiary i. Here: W2 was the named beneficiary at the time when the policies accrued upon the death of Allen Jackson. Therefore, she is the exclusive owner of the proceeds and is entitled to them. 4. Issue 2: there is a distinction between policies acquired prior to the marriage and those acquired during the marriage. a. Policies acquired prior to marriage: Separate property of the spouse acquiring them and the community is entitled to restitution only when the cash value of the policy has increased during the community's existence. (1/2 the increase in value) b. Policies acquired during the marriage: community property and the community is entitled to reimbursement according to the value that the policy had at the time of the dissolution for the community. i. Here the term insurance policies never had a cash surrender value therefore meaning the accounting is due to the community for premiums paid.

i. Kambur v. Kambur (263)

1. H is insured by life insurance, policy is community property and the W gets the life insurance policy on 2. Law: a. Life insurance proceeds, if payable to a named beneficiary other than the estate of the insured, are not considered part of the estate of the insured. i. Proceeds do not come into existence during the life of the insured, never belong to him, and are passed by virtue of the contractual agreement between the insured and the insurer to the named beneficiary. b. There is a clear distinction between ownership of a policy of life insurance and the right to receive the proceeds of life insurance policy after the death of the insured.

i. Ross v. Ross (164)

1. Insurance Contracts are things capable of producing revenue a. See: art. 551 b. Things = CAPABLE of producing fruits. Enter fruit v. product analysis - hinges on diminution of source 2. H claims renewal money from insurance contracts = fruit subject to a declaration of paraphernality a. BUT: H worked every day so clearly not purely a function of law/juridical act i. work = earning, not fruit b. H work: maintaining relationship with clients. 3. Work happened during marriage, leading to payment after divorce, leads to that payment being community property. 4. Concurrence: a. Dispute on whether the insurance contract is a thing capable of producing a fruit. i. if not a thing, then there is no possibility of fruit being produced. b. If H didn't do any work, outcome woulda been way different - would have been fruit sheltered by a declaration.

i. Giselson v. Deputy (185)

1. Interest paid on separate student loan during marriage = community obligation?

ANALYSIS CHECKLIST - THIS IS HOW TO ANSWER A QUESTION

1. Is the underlying property separate or community? 2. Is the separate property a thing capable of producing fruit? 3. Is the asset in question a fruit or an earning? 4. Has there been a proper declaration of paraphernality via 2339? 5. Is apportionment allowed?

i. Tree farms: dimunition of the source??

1. Is timber a fruit or a product? a. It depends! - Is the manner of harvesting the timber one that seriously depletes the substance of the property b. Clear cut = product (community regardless) c. Sustainable cut = fruit (if declaration exists)

i. Morris v. Morris (230)

1. Issue: Are punitive damages classified as community or separate? 2. Law: a. Art. 2344 is not applicable here because the damages received by H are not compensatory damages due to personal injuries: they are "society's sanctions against a tortfeasor's inexcusable conduct." b. Damages due to personal injuries = separate property (usually) c. Punitive damages = community property (because they are for more than just providing aid for the injured spouse - it's a societal sanction per art. 2315.3) i. 2338: not specifically listed as seprate property 3. Issue 2: H contends he is entitled to share of proceeds from W car accident. a. 2344: damages due to personal injuries sustained during the community by a spouse are separate property. a. Community: the portion of damage award attributable to expenses incurred by the community as a result of the injury, or in compensation of the loss of community earnings

i. Succession of Patricia Goudreau (272)

1. Simultaneous Death: 22:645 a. Kids of each parent argue over proceeds as community/separate property b. If H outlived W, proceeds go to designated beneficiary instead of what happened here 2. Issue: What happens when both the insured and the beneficiary die at the same time? 3. Law: a. Art. 939 is applicable because no spouse survived the other. This means Patricaia is presumed to have survived Willie, and Willie's heirs (Goudeaus) are not entitled to recover on the policy from Patricia. b. 22:645: where the individual insured and the beneficiary have died and there is no evidence to prove that they didn't die simultaneously, the proceeds are distributed as if the insured had survived the beneficiary.

i. Fowler v. Fowler (274)

1. Son is insured, mom is beneficiary, and premium paid with community funds a. Son dies & proceeds are paid during the marriage i. Presumption is that it would be community. BUT, mom is named the beneficiary here. Since life insurance proceeds are Sui generis, it is governed by contract law and is mom's property, not the community. ii. Why: insurance is foreign to civil law (and therefore not governed by it) 1. Seen as "gambling" to civil law tradition 2. Counter argument: we are a pro-community property state. Proceeds, like other assets possessed by a spouse not specifically named as specific should be community property. 3. THE RULE: Proceeds of a life insurance policy given to the beneficiary spouse is that spouse's separate property. a. An exception to our laws because this shit is sui generis

i. Paxton v. Bramlette (160)

1. The wife filed a declaration of paraphernality concerning the stock she owns in a company she inherited from her previous husband. 2. Question: Is the annual money she received from the company earnings or fruits? a. Earnings = Derived from labor and industry of the spouse = community b. Fruits = Revenue produced by the underlying separate capital= subject to declaration of paraphernality 3. All or nothing: a. Court usually doesnt divide the money as "mixed" between fruits and earnings for declaration of paraphernality purposes i. She worked in the case, so ALL the money from the company was considered an earning, and therefore not protected by the declaration, so 2339 made the money community property ii. There is an open question: could split instead between earnings and fruits 1. BUT this is less popular because we oppose the idea of mixed separate & community property re-classification.

a. ERISA and Apportionment i. Judith Romero v. Dean Halverson (349)

1. Theme: dispute between H and W over division of H's pension plan benefits in the community property partition 2. Facts: H was a pilot for Delta since 1964. H and W married in 1967. H and W divorced in 1979. H was member of Delta retirement plan. 3. Issue 1: whether W is entitled to remove her interest in the pension plan Immediately. a. Sims held the non-employed spouse is entitled to receive the proportion of the benefits attributable to the other spouse's employment during the existence of the community "if and when they become payable" i. "If and when they become payable" = must wait until the spouse actually retires (USUALLY) b. This is an exception to Sims: the facts allow W to get her share immediately before H's retirement without prejudice to H's interests. i. W argues that H has served 3 of his last 10 years of employment, so her share of the pension benefits can be valued & calculated now as if they were payable now and waives the possibility that she could get higher benefits if she waits. She wants his money now. Also if H dies before he retires, she gets nothing. ii. See the five reasons for this on pg. 351 iii. ERISA starts on 351.

i. Reynolds v. Reynolds (182)

1. Trust income is a thing capable of producing fruits/earnings 2. Here, wife failed to file a declaration, so although her income was a fruit, it went to the community anyway (2339) 3. W had money distributed to her by a trustee via trust sitting in a private account and more money in the account of the trustee representing undistributed earnings of the trust estate (interest) a. Wife argues the sums are her separate property and that she is entitled to the money she spent from her separate account on things in benefit of the community b. Husband argues that the sums are "fruits" of the paraphernal property of his former wife which, since she didn't execute an affidavit of parapernality via art. 2386, formed part of the community. 4. Held: the money distributed to her by the trust is community property. The money not yet distributed to her (earnings via interest) in the trustee's account is still separate property.

i. Lambert v. Lambert: $3,000 out of $9,000 is not inconsequential

1. Whether or not a camera purchased for 9,000 using mixed funds was community property: a. 6,000 of W's separate funds b. 3,000 of community funds 2. 2341: "Property acquired with separate and community things is separate property when the value of the community thing is inconsequential as compared to the value of the separate things used" 3. Court: "we don't think 3,000 is inconsequential when compared to 6,000, so the camera is community property" ii. Reeves: 18% community is inconsequential

definition of matrimonial regime

A matrimonial regime is a system of principles and rules governing the ownership and management of the property of married persons as between themselves and toward third persons."

community property

i. Assets & gains acquired by either spouse in marriage are community property ii. Marriage is a financial partnership and labor and capital each spouse provides to the partnership is shared.

1. Retirement Plans (Not subject to federal preemption or other special legislation) (287)

a. Two flavors of retirement plans: i. Defined benefit plan ii. Defined contribution plan

Chapter 2: What is Property? (43) 1. Article 2325: Matrimonial regime

a. "A matrimonial regime is a system of principles and rules governing the ownership and management of the property of married persons as between themselves and toward third persons"

1. Property Acquired Through Effort, Skill, or Industry: Earnings

a. "Earnings" - property acquired during the existence of the legal regime due to effort, skill, or industry of either or both spouses i. Practice: 1. Stock options acquired during marriage that are not fully "vested" until after the marriage: a. Community 2. Options acquired after marriage that are not fully "vested" until after marriage: a. Separate

1. Community Property: Article 2338

a. "The community property comprises: property acquired during the existence of the legal regime through the effort, skill, or industry of either spouse; property acquired with community things or with community and separate things, unless classified as separate property under Article 2341; property donated to the spouses jointly; natural and civil fruits of community property; damages awarded for loss or injury to a thing belonging to the community; and all other property not classified by law as separate property." i. Basically, anything not listed as separate in Article 2341.

Fruits and Revenues of Separate and Community Property (158)

a. 2341: Separate property defined i. Go read b. 2338: Community property defined i. Go read c. 2341 cmt. (c): Real Subrogation i. Go read d. 551: Fruits defined i. Fruits are things that are produced by or derived from another thing without diminution of its substance. 1. Contrast with what an earning is ii. There are two kinds of fruits; natural fruits and civil fruits. 1. Natural fruits are products of the earth or of animals. 2. Civil fruits are revenues derived from a thing by operation of law or by reason of a juridical act, such as rentals, interest, and certain corporate distributions. a. Dividends are civil fruits of stock

1. Presumption Formulas

a. 3 flavors: i. Possession Formula (LA) 1. Predicate fact: that either spouse possessed the property during the marriage. If so, then the property is presumed to be community property. 2. La: Art. 2340 3. Ex: Texas - see pg. 114 for Texas code article 4. Property possessed by either spouse during or on dissolution of marriage is presumed to be community property. 5. The degree of proof necessary to establish that property is separate property is clear and convincing evidence. ii. Acquisition Formula 1. Predicate fact: the property was acquired during the marriage by either spouse. a. More limited in application than the possession formula. b. Criticism: problematic where there is no credible evidence regarding the date of acquisition of a given asset. 2. Property acquired during marriage by either husband or wife, or both, is presumed to be community property 3. Ex: New Mexico iii. Unlimited Formula 1. Predicate fact: that either spouse has property. a. Much more generous than other two formulas 2. The timing or acquisition of property is not relevant 3. General: All property of spouses is marital property except that which is classified otherwise by this chapter . . . 4. Presumption: All property of spouses is presumed to be marital property.

McGeehee v. McGeeHee (99)

i. Case law suggests that individual good will is not treated as a community asset and does not form a part of the corporate assets in the case of a sole practitioner such as an attorney or physician. 1. "An insurance agency could maintain some degree of perpetual operation regardless of the presence of the insurance agent himself." ii. Issue: was the value of the insurance agency attributable to the goodwill of the agent? 1. Opposite holding than Depner (prior to 2004 statute)

Increase in Value of Separate Assets (80)

a. Art. 2368 - Increase of the value of separate property i. "If the separate property of a spouse has increased in value as a result of the uncompensated common labor or industry of the spouses, the other spouse is entitled to be reimbursed from the spouse whose property has increased in value one-half of the increase attributed to the common labor" 1. Requires the court do an apportionment in the form of a reimbursement claim ii. The community has no claim to the increase in value of separate property during the marriage, so long as no community resources are expended upon the asset. iii. All labor's value goes to the community - even if it is done to a spouses separate property. So if a spouse does labor that is not compensated, there is value owed to the community that was not added to the pot. So, if that labor helps increase the value of a spouses separate property, the other spouse who is supposed to get the half value of the other spouses labor which went uncompensated is now entitled to half the amount of the increased value of the separate property that was created due to the uncompensated labor. 1. Avoids a spouse doing work and avoiding having to share the work's value by going uncompensated b. Process: i. To make a claim under art. 2368, claimant must prove: 1. The improved property is separate; 2. The property increased in value during the existence of the matrimonial regime; 3. That common or community labor of the spouses was expended on the separate property; and 4. That the common labor expended was uncompensated or undercompensated ii. If established, the burden shifts to the owner of the separate property to prove that some or all of the enhancement in value occurred because of factors other than under compensation or uncompensated community labor. 1. The claimant spouse does not have to show that this/her labor was expended on separate property - it is enough to show that the labor of either spouse was so expended. iii. If all this works, the claimant is entitled to one-half the enhanced value of the separate property, even if that value exceeds the value of the uncompensated labor. iv. EXAM- 1. What if increased value was because property values increased over the years? If so, that isn't due to uncompensated labor and therefore not owed under this article (2368) a. Make sure to subtract increase in value not due to the labor (like market value increase) b. Bordelon case didn't, so mention this case and that price too. Mention the discrepancy.

1. Real Subrogation (136)

a. Article 2341 - Comment C i. Comment (c): The principle of real subrogation is applicable to both separate and community property. Thus, when a thing forming a part of the separate property of a spouse is converted into another thing, the mass of the separate property is not diminished. The new thing takes the place of the old: "Subrogatum capit naturam subrogate."

1. Assets Acquired Over Time

a. Courts are hesitant to allow mixed title to assets i. The asset must be classified as either community or separate b. Cases allowing a pro-rata apportionment do exist i. three considerations affect classification of an asset as community or separate: 1. Inception of the right/Timing of the acquisition 2. The source of the funds of the acquisition 3. Pro-rata c. Inception of the Right/Timing of the acquisition: assets acquired before marriage are separate; assets acquired during marriage are presumptively community property. i. Difficult: when assets are acquired over time ii. Two doctrines to determine timing of acquisition 1. Inception of title doctrine: the status of property is determined at the moment the spouse first acquires an ownership interest in the property a. Applied typically to immovable classification 2. Inception of right doctrine: looks to the beginning of the transaction to determine when a spouse first acquired an enforceable right or interest. d. Source of the funds of acquisition: determines property classification i. Real subrogation: when property bought with separate money is separate and property bought with community money is community. ii. Mixed funds: La usually requires the asset be entirely community or entirely separate. 1. See: 2341 (separate property = property acquired by a spouse with separate things or with separate and community things when the value of the community things is inconsequential compared with separate things used) 2. REIMBURSEMENT: If property acquired with a mix of community and separate funds is considered separate property of a spouse pursuant to art. 2341, art. 2366 provides that the other spouse is entitled to reimbursement for one-half the amount or value that the community had at the time it was used. 3. If property acquired with a mix of community and separate property is considered community property pursuant to 2338, then 2367 provides that the spouse who contributed his or her separate property is entitled to reimbursement for one-half the amount or value that the property had at the time it was used. iii. When asset is acquired during marriage with mix of community and separate funds, classification of the asset as community or separate hinges on whether the value of the community contribution is inconsequential in comparison to the value of the separate contribution. e. Pro Rata: concurrent ownership by community and separate property i. Traditionally not permitted, but courts are moving toward it. ii. Looks at the % paid by community/separate spouse over time.

1. Basic Exam Answer:

a. Default rule b. Here are the exceptions . . . c. Here is what is happening here: _______

1. Limits on the Scope and Applicability of the Community Presumption (129)

a. Estoppel (129) i. Art. 2342(A) 1. "A declaration in an act of acquisition that things are acquired with separate funds as the separate property of a spouse may be controverted by the other spouse unless he concurred in the act. It may also be controverted by forced heirs and the creditors of the spouses, despite the concurrence by the other spouse." ii. Ford Motor Co. v. Corbello (130) 1. Rule: spouses and creditors can both rely on the presumption of community a. Here the presumption is successfully rebutted against a creditor b. Ford had actual knowledge that the asset in question was separate property 2. Creditors cannot avail themselves of the presumption of community if they have actual knowledge that the asset in question was separate property. 3. H bought a car using community funds. Fell behind on payments and lost the car. Ford tried to collect the owed amount by taking W's car. W claims the car was separate property and therefore cant be taken. a. This court agrees that the car cannot be taken and is separate property of W 4. W owned a house before marrying H, sold the house, opened a bank account that same day, put the money from the house sale in that account, and then bought the car in question using that money. a. W's separate property can't be seized to satisfy H's note i. H was only obligor on note ii. Community obligations can be satisfied using community property and the separate property of the spouse that incurred the obligation

Acquisition of Undivided Interests in Property (255)

a. Exception to the rule against mixed title! b. Art. 2341.1 i. A spouse's undivided interest in property otherwise classified as separate property under Article 2341 remains his separate property regardless of the acquisition of other undivided interests in the property during the existence of the legal regime, the source of improvements thereto, or by whom the property was managed, used, or enjoyed. ii. In property in which an undivided interest is held as community property and an undivided interest is held as separate property, each spouse owns a present undivided one-half interest in that portion of the undivided interest which is community and a spouse owns a present undivided whole interest in that portion of the undivided interest which is separate. c. Example: Spouse A inherits a 1/3 interest in a family home. At a later time, she uses community funds to purchase a 2/3 interest in the home from her siblings. i. How does 2341.1 apply during the marriage? 1. 1/3 of the home stays separate, so creditors of other spouse can't touch 1/3 of the house. a. 2341.1 rebuts creditor's presumption of community ii. How does 2341.1 apply at divorce? 1. Spouse A claim: 1/3 of the house and ½ of the 2/3 part 2. Spouse B claim: ????????? iii. How does 2341.1 apply at death (intestate) of the Spouse with the 1/3 SP interest? 1. Children of A get all of the 1/3 interest and ½ of the 2/3 interest, but spouse B gets usufruct of that portion still.

1. Donations Between Spouses (205)

a. When a donation between spouses transforms separate property into community property or community property into separate property = Principle of Transmutation. b. Donations between spouses are subject to a different set of rules i. 2343 - Donation by spouse of interest in community 1. "The donation by a spouse to the other spouse of his undivided interest in a thing forming part of the community transforms that interest into separate property of the donee. Unless otherwise provided in the act of donation, an equal interest of the donee is also transformed into separate property and the natural and civil fruits of the thing, and minerals produced from or attributed to the property given as well as bonuses, delay rentals, royalties, and shut-in payments arising from mineral leases, form part of the donee's separate property." 2. Default: transmutation to separate property = separate a. using community funds to buy a gift to donate to spouse transmutates those funds into separate property for the donee spouse/person 3. Example: a. Spouse A buys Spouse B a diamond bracelet for her birthday using his wages (community funds), the gift transforms the bracelet into Spouse B's separate property. b. Note: Fruits of the separate property are also separate property. NOT the Spanish Rule for Art. 2343! ii. 2343.1 - Transfer of separate property to the community 1. "The transfer by a spouse to the other spouse of a thing forming part of his separate property, with the stipulation that it shall be part of the community, transforms the thing into community property. As to both movables and immovables, a transfer by onerous title must be made in writing and a transfer by gratuitous title must be made by authentic act." 2. Form requirements: a. Authentic Act: Gratuitous title b. In writing: onerous title 3. Absence of writing = no community property a. Manual gift of the separate property to spouse to be their separate property is okay though 4. Example: a. Spouse A buys a house prior to the marriage. She donates her interest in the separate property (house) to the community by authentic act. This is a transfer by gratuitous title and the house becomes community property. b. Spouse A inherits a gold watch. She gives the watch to Spouse B once they are married. There is a manual donation with no act stipulating that the watch is community property, so the watch becomes Spouse B's separate property. i. A gift between spouses becomes the donee spouse separate property unless there is a stipulation that it is a donation from one spouse to the community: to donate to the community you have to stipulate you are doing so otherwise it ends up being separate property.

1. Career Assets: Professional Degrees and Licenses (66)

a. Generally: degrees and licenses are not property and therefore not subject to division upon divorce i. There can be some inequity in this, which leads to variance when it comes to situations where a spouse contributed to and supported the other spouse while getting the degree/license and suffers some inconvenience because of it during the marriage. b. Art. 121: in a proceeding for divorce or thereafter, the court may award a party a sum for his financial contributions made during the marriage to education or training of his spouse that increased the spouses earning power, to the extent that the claimant did not benefit during the marriage from the increased earning power" The sum may be in addition to a sum for support and to property received in the partition of community property. i. "contributions" - direct educational training expenses paid by the claimant for the other spouse such as tuition, books, and school fees as well as financial contributions made to satisfy living expenses of the supported spouse. ii. Limitation: the extent that the claimant did not benefit during the marriage iii. Calculation for award under art. 121: 1. Working spouse's financial contributions to joint living expenses and education costs of student spouse - less - Working spouse's financial contributions plus student spouse's financial contributions less cost of education - equals - equitable award to working spouse iv. 3 factors to consider from Santistevan case c. Art. 122: "The claim for contributions made to the education or training of a spouse is strictly personal to each party" d. Art. 123: "The sum awarded for contributions made may be a sum certain payable in installments" e. Art. 124: "the actions made for contributions for education/training prescribes in three years from the date of signing the judgment of divorce or declaration of nullity of the marriage"

1. Patrimonial vs. Extrapatrimonial

a. If your client is not the breadwinner, you want to prove the other spouse's shit is patrimonial in nature i. Patrimonial rights are property for community property context ii. Patrimonial rights are considered part of the aquets & gains, and therefore are part of the community the spouse is entitled to an interest in. b. Client is the breadwinner; you want to prove their property is Extrapatrimonial where you can! i. Extrapatrimonial rights are not considered part of the community for mat regimes.

1. Goodwill (92)

a. L.A. R.S. 9:2801.2 (2004): In a proceeding to partition the community, the court may include, in the valuation of any community-owned corporate, commercial, or professional business, the goodwill of the business. However, that portion of the goodwill attributable to any personal quality of the spouse awarded the business shall not be included in the valuation of a business. b. Two flavors of goodwill i. Enterprise goodwill: an asset of the business and accordingly is property that is divisible in a dissolution to the extent that it inheres in the business, independent of any single individual's personal efforts and will outlast any person's involvement in the business. 1. Most courts agree enterprise goodwill should be included when valuing assets at divorce. ii. Individual Goodwill: courts aren't willing generally to include individual goodwill when valuing assets at divorce. c. Clare Ryan Explanation: i. The revisions to R.S. 9:2801.2 in 2004 changed the law in response to the jurisprudence of both the Depner and Ellington cases. Remember that in the Depner case, the court refers to individual goodwill applying to doctors and lawyers (ie. the professions). Look then at the Ellington case, in particular page 108 of the textbook and read the middle paragraph. Mr. Ellington is a businessman and not in one of the "professions" so he doesn't get the benefit of individual goodwill. In other words, all of the "goodwill" belongs to the enterprise and can therefore be included in the value of the business (which Mr. Ellington does not want, because the higher the value of the business, which is community property, the more he will have to pay his wife to balance out their assets at partition). ii. That is why he goes to the legislature and introduces the revision to the statute, which states: "In a proceeding to partition the community, the court may include, in the valuation of any community-owned corporate, commercial, or professional business, the goodwill of the business. However, that portion of the goodwill attributable to any personal quality of the spouse awarded the business shall not be included in the valuation of a business."

1. Assets Acquired over Time: Life & Disability Insurance (258)

a. Policy v. Proceeds i. Proceeds: money received once insured person dies 1. Beneficiary receives the funds 2. Sui generis: treated differently from policy itself a. Not governed by matrimonial regime community/separate law ii. Policy: contract itself that sets up proceeds b. Life Insurance: life insurance policies purchased before marriage = separate property i. Community gets reimbursed for amount paid into policy premiums

1. Medical Expenses

a. Rule: Damages attributable to expenses incurred by the community are community property. b. Example: During the marriage, Spouse A is sexually harassed at work. He sues his boss for intentional infliction of emotional distress. A also develops an ulcer as a result of the stress from the harassment. He goes to see a doctor for the treatment, which costs $10,000. He pays the bill will his salary. The settlement is for $50,000 after attorney's fees. Classify the $50,000. i. His salary is community property.

Strength of the Community Presumption (120)

a. Talbot v. Talbot (120) i. Proper burden of proof under art. 2340 to fight presumption of community property is preponderance of the evidence 1. As opposed to "clear and convincing" - the standard used before 2340 eliminated the double declaration rule (which is retroactively applied thanks to Tullier) 2. "preponderance" is "51%" - "more likely than not" ii. Reason: more fair for people that should be able to fight the presumption of community since it is already so hard to rebut.

1. Acquisitions with Separate and Community Property

a. The question: i. Separate $ to buy an asset = separate property ii. Community $ to buy an asset = community property iii. Separate $ and Community $ to buy an asset = ????? b. Article 2341: Separate property i. "The separate property of a spouse is his exclusively. It comprises: property acquired by a spouse prior to the establishment of a community property regime; property acquired by a spouse with separate things or with separate and community things when the value of the community things is inconsequential in comparison with the value of the separate things used" 1. If inconsequential and therefore separate, the other spouse would get reimbursement for ½ of the community funds used to buy the thing. 2. If not inconsequential, the result on the mixed thing itself has 70% separate and 30% community. 2341.1 allows an exception to the typical rule against mixed title. Look up 2341.1 result/effect. c. Issue: we don't know what counts as "inconsequential" i. It is up to court discretion! Three sources of authority: ii. Art. 2341; Comment (d): 1. The value of the community things at the time of acquisition should be used for determining whether it is "inconsequential" in comparison with the value of the separate things used.

1. Separate Property: Article 2341

a. The separate property of a spouse is his exclusively. It comprises: property acquired by a spouse prior to the establishment of a community property regime; property acquired by a spouse with separate things or with separate and community things when the value of the community things is inconsequential in comparison with the value of the separate things used; property acquired by a spouse by inheritance or donation to him individually; damages awarded to a spouse in an action for breach of contract against the other spouse or for the loss sustained as a result of fraud or bad faith in the management of community property by the other spouse; damages or other indemnity awarded to a spouse in connection with the management of his separate property; and things acquired by a spouse as a result of a voluntary partition of the community during the existence of a community property regime.

a. Article 302: Definitions

i. "Burden of persuasion" is the burden of a party to establish a requisite degree of in the mind of the trier of fact as to the existence of nonexistence of a fact. Depending on the circumstances, the degree of belief may be by a preponderance of the evidence; by clear and convincing evidence, or as otherwise required by law ii. A "predicate fact" is a fact or group of facts which must be established for a party to be entitled to be benefits of a presumption

a. Donations:

i. 1468: Donations inter vivos 1. A donation inter vivos is a contract by which a person, called the donor, gratuitously divests himself, at present and irrevocably, of the thing given in favor of another, called the donee, who accepts it. ii. 1469: Donations mortis causa 1. A donation mortis causa is an act to take effect at the death of the donor by which he disposes of the whole or a part of his property. A donation mortis causa is revocable during the lifetime of the donor.

a. Inheritances:

i. 874: Testate successions 1. Testate succession results from the will of the deceased, contained in a testament executed in a form prescribed by law. ii. 875: Intestate successions 1. Intestate succession results from the provisions of law in favor of certain persons, in default of testate successors.

General Law: damages award

i. Any portion of an award intended to compensate for the pain and suffering incurred by a spouse is that spouse's separate property 1. It is essentially compensating for an Extrapatrimonial loss ii. Awards for lost wages are classified as either community or separate depending on the period of time in which the loss of wages occurred 1. Any portion of award for lost wages that is intended to compensate for wages lost during the existence of the community is community property iii. Any portion of an award for lost future wages (wages that would have been earned after termination of the marriage) are generally classified as separate property. 1. BUT, if the marriage ends because of divorce or the death of the non-injured spouse, then the wages are separate property of the injured spouse 2. BUT, if the marriage ended in the death of the injured spouse, then the wages are community property.

1. Damage Awards (217) a. Introduction:

i. Art. 2338: provides that sums of money awarded to compensate for damage to community property are classified as community ii. Art. 2341: provides that sums of money awarded to compensate for damage to separate property are classified as separate 1. Also provides that damages awarded to one spouse because of the other spouse's breach of contract, fraud, or bad faith management are separate property. iii. Art. 2344: Offenses and quasi-offenses; damages as community or separate property. 1. "Damages due to personal injuries sustained during the existence of the community by a spouse are separate property" 2. "Nevertheless, the portion of the damages attributable to expenses incurred by the community as a result of the injury, or in compensation of the loss of community earnings, is community property. 3. If the community regime is terminated otherwise than by death of the injured spouse, the portion of the damages attributable to the loss of earnings that woulda accrued after termination of community regime is the separate property of the injured spouse" iv. WAGES: An award of damages may be partly community and partly separate property of the injured spouse 1. Any portion of an award intended to compensate for pain and suffering incurred by a spouse is that spouse's separate property a. This is because it is compensating for an Extrapatrimonial loss 2. Awards for lost wages are either community or separate depending on the situation a. Any portion of damages for wages lost during the existence of the community regime is community property b. Any portion of damages for lost future wages (wages earned after termination of the marriage) are separate property unless death of injured spouse. 3. Termination of the marriage and lost wages: a. Divorce or death of non-injured spouse: wages are separate property of the injured spouse b. Death of the injured spouse: wages are community property

a. Louisiana uses the Spanish Rule

i. Art. 2339 1. The natural and civil fruits of the separate property of a spouse, minerals produced from or attributable to a separate asset, and bonuses, delay rentals, royalties, and shut-in payments arising from mineral leases are community property. Nevertheless, a spouse may reserve them as his separate property as provided in this Article. 2. Fruits of the community property of a spouse are community

a. Tullier v. Tullier (116)

i. Art. 2340 can be applied retroactively 1. Substantive law usually doesn't, but this is an exception i. Reason: the wife will not be deprived of any property which is truly community property. 1. So H has to break presumption to prove property is sole property and not in community: a. Here, he proved that it was separate property because the facts show the property was either given to him via cash sale or a donation 2. Courts cant make substantive law, but the retroactivity of 2340 is a procedural matter and doesn't change the substantive law concerning community property - this is important go back and read!!!

a. Louisiana approach: Possession formula

i. Art. 2340: Presumption of community 1. "things in the possession of a spouse during the existence of a regime of community of aquets and gains are presumed to be community, but either spouse may prove that they are separate property." a. Effective: January 1, 1980 ii. Prior Louisiana law and retroactivity of current law 1. Before 1980 a wife could overcome the presumption of community without a double declaration (that the asset was acquired with separate funds and spouse intended it to be separate property) BUT the case law required proof of (1) the use of separate funds; (2) that the wife administered those funds; (3) that the funds were invested by her; and (4) if a credit card purchase, of the ability to accumulate separate funds in the future to pay the price 2. This old law was killed off: a. Fourth requirement concerning credit purchases was eliminated in Curtis v. Curtis because more women were entering the work force. b. This old rule also violated equal protection law iii. Example: Your client owns a house. She gets married and she still has the house. She acquired ownership before marriage—that very clearly makes it her separate property. But, because she possess the property during the marriage it is presumed to be community and you will have to try to rebut that presumption by showing that she got ownership prior to marriage.

Patricia Thompson v. Rickey Martin (197)

i. Court makes clear that son did not work to receive the winnings of parents because if he does anything to get money then its an earning, not a donation. 1. Keep in mind subrogation here too though. 2. Be on lookout for an earning disguised as a donation ii. Law: 1. 1523: three types of donations inter vivos a. Purely gratuitous: made without condition and merely from liberality i. Applies here b. Onerous donation: burdened with charges imposed on the donee c. Remunerative donation: the object of which is to recompense for services already rendered.

Common issue: the treatment of deferred compensation at death or divorce

i. Courts have readily allowed a pro-rata apportionment of funds attributable to these plans. ii. 2 types of apportionment are used: 1. Time apportionment a. Best for dividing a defined benefit plan (Smith) 2. Money apportionment a. Best for dividing a defined contribution plan iii. Separate annuities approach: court determines the present value of the pension, then orders the employee spouse to pay the non-employee spouse a lump sum award. 1. Then, the court may divide the retirement plan into two separate plans, one for each spouse. 2. This approach requires the court to apportion ownership of the retirement plan as of the date of divorce and then order the retirement plan administrator to divide the existing funds into two separate retirement accounts or annuities, one for each spouse.

McNorris v. McmMorris (250)

i. Damages from pre-marital injury 1. Generally: a cause of action for damages due to personal injuries sustained before the marriage is property acquired by the spouse prior to the community property regime - and therefore separate property. a. Such damages are not converted into community when settled by payment during the marriage (since injury and damage determination happed before community regime) 2. 2315: allows loss of consortium damages only to persons who would have had a cause of action for wrongful death of an injured persons a. 2315.2 limits wrongful death actions to sue on that cause of action exclusively to spouses and children, then parents, then siblings. ii. Contract payments during community for pre-marital disability 1. Monthly payments for disability became due before the marriage, under terms of an employment contract that was entered into before the marriage. a. Her right to those payments were property, and that property was acquired by her when she became disabled by injury before her marriage so it is her separate property. iii. Commingling 1. Art. 2341: makes separate any property acquired before marriage, or acquired by a spouse with separate things or with separate and community property when the value of the community things is inconsequential in comparison with the value of the separate things used. a. Mixing of funds in the same account does not automatically make the separate funds community. If there is indiscriminate commingling such that one cant differentiate among the funds, then the funds might all become community 2. Art. 2367: separate property used for the acquisition, use, improvement, or benefit of community property is reimbursable as to half by the other spouse, only to the extent of the other half's half of the community net of community debts.

a. Level of formality:

i. Donations in the form of a testament or some other formality (such as a notarial act) usually specify the donee. See Art. 1541. ii. BUT: Art. 1543 - The donation inter vivos of a corporeal movable may also be made by delivery of the thing to the donee without any other formality [manual gift] 1. This means we aren't sure sometimes who the donation was for: a spouse individually (separate) OR both spouses jointly (community) a. Key: intent of the donor

Louisiana system a. Art. 2336: Community Property in Louisiana

i. Each spouse owns a present undivided one-half interest in the community property. Nevertheless, neither the community nor things of the community may be judicially partitioned prior to the termination of the regime. During the existence of the community property regime, the spouses may, without court approval, voluntarily partition the community property in whole or in part. In such a case, the things that each spouse acquires are separate property." ii. "one-half undivided interest" - like co-ownership

a. The similarities & differences between Community and Separate Property jurisdictions (30)

i. Equal division and equitable distribution compared 1. Equal division: continues the automatic sharing of marital assets by requiring that marital or community property be divided equally between the spouses. a. Predicable: leaves judge with little discretion to alter the portion of marital assets to which each spouse is entitled. b. Bad: strict formulaic approach can result in unfair/inequitable outcomes. 2. Equitable division: Civil law flavor division which each spouse is entitled to one half of the spouses' marital or community property. a. Requires the court divide the property owned by the spouses "equitably" between them. b. Similar to equal division because judge has little discretion in altering the division of assets and because of the automatic concurrent ownership of community property during marriage. c. Each spouse retains his or her separate property and is entitled to one half of the community property d. LACC: 2369.1: Application of co-ownership provisions i. After termination of the community property regime, the provisions governing co-ownership apply to former community property unless otherwise provided for e. LACC art. 2369.2: ownership interest i. Each spouse owns an undivided one-half interest in former community property and its fruits and products.

a. Defined Contribution Plan: more popular plan in which an account is kept for each employee participating in the plan and periodic contributions are made by the employee, the employer, or both, to the account

i. Examples: 1. 401(k) Plan 2. Profit Sharing/ Stock Bonus Plan 3. Traditional IRA ("Individual Retirement Account") 4. Roth IRA 5. SEP ("Simplified Employee Pension Plan") ii. If an employee changes jobs, he can usually take the account with him. 1. Availability of the funds does not depend on the continued existence or solvency of the employer (avoids pitfall of defined benefit plan) iii. Retirement plan (offered by an employer or as an individual plan) where taxpayer contributes money periodically to be invested. 1. Amount available at retirement depends on investment success. 2. 401K plans are a common example. iv. At retirement, the employee is entitled to the funds in the account, plus or minus investment gains/losses. v. In many, the employee can manage the investment funds himself and withdraw them at earlier date than retirement if needed. vi. Receive special income tax treatment. vii. ERISA 1. Federal Statute: Employee Retirement Income Security Act 2. Applies: Most retirement plans offered by a private employer

a. Angelo John Longo v. Ruth Damont Longo (253)

i. Facts: 1. H and W started living in sin together in a house owned by H's brother while H was married to another woman. 2. After divorcing first W, H buys the house using money and relinquishing interest in a restaurant 3. After buying house, H and W marry. 4. Before and during marriage, H and W pooled funds to pay for living expenses and do repairs/renovations to the house (after physical separation) ii. Held: The house was acquired by H while unmarried and is his separate property. b. PRACTICE QUESTIONS: PAGE 254

Bordelon v. Bordelon (87)

i. Facts: 1. H had separate property (land) that he did a lot of work on during the marriage, uncompensated, that led to that property increasing in value. ii. To make a claim under art. 2368, claimant must prove: 1. The improved property is separate; 2. The property increased in value during the existence of the matrimonial regime; 3. That common or community labor of the spouses was expended on the separate property; and 4. That the common labor expended was uncompensated or undercompensated iii. If established, the burden shifts to the owner of the separate property to prove that some or all of the enhancement in value occurred because of factors other than under compensation or uncompensated community labor. 1. The claimant spouse does not have to show that this/her labor was expended on separate property - it is enough to show that the labor of either spouse was so expended. iv. If all this works, the claimant is entitled to one-half the enhanced value of the separate property, even if that value exceeds the value of the uncompensated labor. v. EXAM- 1. What if increased value was because property values increased over the years? If so, that isn't due to uncompensated labor and therefore not owed under this article (2368) a. Make sure to subtract increase in value not due to the labor (like market value increase) b. Bordelon case didn't, so mention this case and that price too. Mention the discrepancy.

a. Michel v. Michel (50)

i. Facts: 1. W argues her publishing contracts on her books are not "patrimonial" and therefore isn't community property a. Doesn't want H to get a % in divorce b. Wife argues that: i. The works are still in progress ii. Contacts were formed after the divorce ii. Issue: whether the value of pending literary works of a spouse is considered part of the community property and if so, whether it should be split 50% 1. A writers literary works constitute a patrimonial asset which forms a part of the community insofar as its value based upon the writer's services performed during the existence of the community. iii. Law: 1. If you are working during the marriage, earnings are part of the community property. a. It doesn't matter if you get paid after divorce b. You have to figure out how much of the labor occurred during the marriage and attribute the earnings from that amount to the community i. Can be difficult ii. "pro rata" share is the definition iv. Held: 1. Lesson: It matters when the work was done, not when the party was paid.

a. ERISA

i. Federal law preempts state law 1. Applies to retirement plans provided by private industries ii. Retirement Equity Act: retirement plans are divided according to state law at divorce, but there must be a qualified domestic relations officer (QDRO) 1. State law governs as long as it involves a QDRO iii. LOOK THIS UP MORE IDK WHAT IS HAPPENING iv. Boggs v. Boggs (336) 1. In a conflict between federal law (ERISA) and state law (community property rules), which prevails? 2. GO LOOK AT THIS CASE IN CASE SUMMARY DOCUMENT - EXPLAINS ERISA TOO

a. The intent of the donor determines if the donation is to one or both spouses and in turn whether the donation is community or separate

i. Gift to the spouses jointly: community property 1. Art. 2338 - "property donated to the spouses jointly is community property" 2. Deciding whether a joint donation or not is easy if it is in the form of a testament or accompanied by some other formality a. The line blurs in inter vivos donations (1543) where no formality is needed and physically delivering the thing to the donee without any other formality is enough. 3. Absent proof of donor intent, the presumption of community can take over and the donation is community property. a. Ex: wedding shower gifts ii. First, prove an intent by the donor to give. 1. The donee bears the burden of proving the alleged donation. 2. If the donee can successfully prove the intent to donate and actual possession of the corporeal movable property simultaneously, then it may be necessary to establish whom the donor intended the gift to be given to. a. If the donor intended the donee to be one spouse alone, then the donated property is separate property. If the donor intended the donee to be both spouses jointly, then the donated property is community property.

a. La. Retirement System v. McWilliams (298)

i. Held: a former spouse is entitled to her share of the survivor benefits payable under H's retirement plan and that the retirement plan should have been ordered to pay such benefits directly to her ii. Facts: H married W1, got a LASERS plan working for the state, divorces W1, marries W2, and then dies. Who gets the survivor benefits? iii. Issue: whether the exclusion of the "former spouse" from the list of persons whom survivor benefits are distributed to under 11:471 operates to deprived a former spouse of her community property interest in these benefits which have already been recognized as community property and awarded as such. 1. Answer: 11:471 does not operate to deprive W of her community rights to these benefits. iv. Law: 1. Art. 2338 and case law holds that the right to share in a retirement plan is a community asset, co-owned by the spouses, and subject to division upon dissolution of the marriage 2. Retirement benefits and community property principles: a. An employee's contractual pension right is not a gratuity, but a property interest owned by him; b. To the extent that the right derives from the spouse's employment during the existence of the marriage, it is a community asset subject to division upon dissolution of the marriage. c. The right to share in a retirement plan is a community asset which, at the dissolution of the community, must be so classified even though the right has no cash value at the time of dissolution of community. 3. Survivor benefits are community property under art. 2338. a. Considered income, not a gratuity. b. Survivor benefits are "other benefits payable by a retirement plan" and are therefore community property, making spouses co-owners of that benefit.

a. Egan v. Egan - Workers Compensation Benefits

i. Held: workers compensation paid after the divorce and dissolution of community is separate property. ii. Issue: Are worker's compensation benefits more like damages for personal injury under Art. 2344 or more like disability retirement benefits? iii. Law: 1. Distinguishes Johnson in which injured spouse's right to receive benefits was based on his contributions to the disability fund, done with community funds. 2. HERE, the workers comp benefits did not flow from a community endeavor. a. H was injured on the job, so its his benefits. 3. Still community: The portion of the damages attributable to expenses incurred by the community as a result of the injury or in compensation of the loss of community earnings a. If the community is terminated otherwise than the death of the injured spouse, the portion of damages attributable to the loss of earnings that would have accrued after termination is the separate property of the injured spouse.

a. Hamilton v. Hamilton (190)

i. Here court missed big issue: donation happened before the wedding 1. WDK how this affects the status of the donation - big discussion here ii. Rule: 1. Validity of manual donations is dependent on: a. the intention of the donor to give; and b. The delivery of the thing to the donee 2. The intention of the donor is key - it controls the identity pf the done or donees. iii. Held: 1. Despite the gifts being given at a bridal shower, the intent of the donors is controlling and the mode by which the donation is made is secondary. 2. Since there is no proof of the intent of the donors: "Absent any proof of the intent of the donors, it must be presumed that gifts of the nature here involved, which would appear to be for the use of both parties, are jointly owned by them (community).

a. Individual Retirement Accounts (IRAs) (357)

i. Individual Retirement Accounts are not subject to ERISA preemption. State law governs ownership of an IRA. 1. Several issues are unresolved ii. At divorce, state community property laws apply to the classification of the IRA. 1. If the IRA is community property it could be allocated entirely ot owner-spouse with an equalizing payment/property award allocated to other spouse 2. BUT, the IRA can be divided among the two spouses. a. This division can result in unfavorable tax consequences iii. IRAs = not subject to ERISA preemption. 1. Divorce = IRAs treated like other retirement plans/ financial assets. 2. Death = L.A. R.S. 9:2449 iv. Any benefits payable by reason of death from an individual retirement account established in accordance with the provisions of 26 U.S.C. 408, as amended, shall be paid as provided in the individual retirement account agreement to the designated beneficiary of the account. Such payment shall be a valid and sufficient release and discharge of the account holder for the payment or delivery so made and shall relieve the trustee, custodian, insurance company or other account fiduciary from all adverse claims thereto by a person claiming as a surviving or former spouse or a successor to such a spouse. v. La. Rev. Stat. 2449: Individual retirement accounts; payment of benefits (governs rights to IRA upon death of owner-spouse) 1. See Succession of Earl Ernest Egan a. Summary: kids of marriage 1 versus wife from marriage 2 fighting over IRA accounts of dead dad - some of which begun before marriage to wife 2. H named W2 the sole beneficiary of the IRAs. vi. La. Rev. Stat. 1426: Retirement plan; usufruct of surviving spouse (governs rights to an IRA at time of death of the other spouse) 1. See Succession of Lambert 2. W dies, and H's IRA becomes an issue after H remarries. After remarriage, the kids demand their half share in the account as part of the community assets. a. Question: pay status of the account 3. LA. R.S. 9:1426 a. (1) If a recurring payment is being made from a public or private pension or retirement plan, an annuity policy or plan, an individual retirement account, a Keogh plan, a simplified employee plan, or any other similar retirement plan, to one partner or to both partners of a marriage, and the payment constitutes community property, and one spouse dies, the surviving spouse shall enjoy a legal usufruct over any portion of the continuing recurring payment which was the deceased spouse's share of their community property, provided the source of the benefit is due to payments made by or on behalf of the survivor. b. This usufruct shall exist despite any provision to the contrary contained in a testament of the deceased spouse. c. The usufruct granted by this Section shall be treated as a legal usufruct and is not an impingement upon the legitime and a naked owner shall not have a right to demand security.

a. Charolette Chambers v. William Chambers (206)

i. Issue: Does Art. 2343 apply to spousal donations made after the termination of the community? ii. Termination of the community of acquets and gains = ownership of community property transforms into co-ownership in indivision. iii. Law - 2343: donation by a spouse 1. 2343 Only applies to donations made before termination of the community. a. 2356 says termination of community happens at separation of bed and board. iv. Here, parties separated before the donation, so 2342 doesn't apply and the car is still community property. Clare says that effect is the same?

Ellithorp v. Ellithorp (220)

i. Issue: How to apportion a damages award that includes: pain and suffering, as well as lost past and future earnings when the marriage terminates in divorce? ii. Here: 1. Settlement was 358,000 a. Subtracted insurance payout for medical bills and received salary b. 100,000: Husband's pain & suffering c. 258,000: H lost future earnings d. 1,000: W loss of consortium e. 1,000: Child loss of consortium.

a. Young v. Young (219)

i. Issue: How to classify an award for future wages pertaining to an accident that occurred before the marriage? 1. Note: exception to the principle of real subrogation. ii. Premarital injury damages: 1. Art. 2344: not applicable to damages incurred before marriage and paid during the community. 2. *Awards for damages when injury occurred prior to marriage is always separate property even if part of the award is for lost future wages 3. Broussard v. Broussard a. H's recovery during the marriage for an injury before the marriage was his separate property even though the damage was for loss of future earnings - which usually becomes community i. Why: at the time of the accident, W had contributed nothing to the non-existent community and had no influence on her future H's projected earning capacity. 4. HERE: a. An action for damages resulting from offenses and quasi-offenses suffered by a single man is his separate property. i. At the time of the accident, the W contributed nothing to the non-existent community and had no influence upon her future H's projected earning capacity - so she has no right to it now.

a. Shrewbridge v. Shrewbridge (70)

i. Issue: Is Beverly entitled to compensation for contributions to her husband's education and training ii. Holding: Beverly Shewbridge is entitled to reimbursement under Art. 121. 1. Therefore, even if the spouse is not earning significantly more, the education has increased the earning power. iii. Facts/Case: 1. W states that she worked 2 jobs during time H studied and that H's studies took away time together and their social life. She also testified that they agreed that once he got the degree and started working, shed quit and hed support her while she went back to get a nursing degree. She expected to benefit from this arrangement in the future when they would have a higher standard of living. 2. Court reasoning for award on pg. 74 a. H's earnings will likely rise and W will not benefit from the increase. Thus, she is entitled to compensation for the contributions she made which enabled H's increase in his earning power during the marriage.

a. Santistevan v. Santestevan (76)

i. Issue: Is Loretta entitled to reimbursement under Art. 121 for contributions made to her ex-husband's education and training during the marriage? 1. H was hurt in a car crash and was unable to make money. So he went to college during end of the marriage and, after divorce, got his BS degree a. Tuition was paid by LA Dept. of Vocational Rehabilitation, and W did not contribute to his student loans. 2. Factors to consider in making determination of whether an award under art. 121 is to be made: a. The claimant's expectation of shared benefit when contributions were made; b. The degree of detriment suffered by the claimant in making the contributions; and c. The magnitude of the benefit received by the other spouse. ii. Held: Loretta was not entitled to reimbursement under art. 121 1. She had not suffered any significant financial detriment because Alfredo was still attending school.

a. Goines v. Goines (208)

i. Issue: What does Art. 2343.1 require to transfer a house owned as separate property into community property? i. Held: Home was bought with separate funds, but the affidavit executed by both parties for refinancing the home stated the home was community property. 1. This is enough to show intent of H for the home to be considered community property ii. Law: 1. 2343.1 says that a spouse may transfer separate property to the community. a. A transfer by gratuitous title, or a donation, must be made by authentic act signed by the donor and donee at the same time and place. (see 209 idk wtf is happening)

a. Lanza v. Lanza (56)

i. Issue: Whether a State Farm Agency is community property subject to partition? Whether the ex-spouse is entitled to any portion of renewal commissions? ii. Applied: 1. Here, State Farm Agency is not a "thing" that H has ownership rights over. It is technically property of State Farm, not the agent/H. a. BUT commission earned based on H;'s labor during the marriage is part of the community b. If H could have sold the agency to someone else, then it would be part of the community because H actually "owns" the right - its patrimonial i. Since he couldn't really liquidate the K himself, it wasn't his and therefore isn't part of the community. c. H was an "independent contractor agent." His rights under that agreement did not constitute property for community property partition purposes. 2. Community property: "The community property comprises: property acquired during the existence of the legal regime through the effort, skill, or industry of either spouse; and all other property not classified by law as separate" a. LACC art. 2338 - community property defined b. If payment is made during the community for work done before its commencement, the money is separate. c. If the check is cut after termination, but is for work done during the community, the funds are community iii. Holding: The State Farm Agency is not a "thing" subject to partition. The commissions based on labor done on the renewal contracts during the marriage is part of the community property. 1. Therefore: Just because something has value does not mean it is "property" for the purposes of partition, the party must have "ownership rights." b. Class examples: patrimonial v. extra patrimonial i. Gym Ownership ii. Sick Leave iii. Frequent Flier Miles (maybe - has value) iv. Option to purchase a care via lease agreement (no)

1. Disability Insurance (279) Succession of Arabie (279)

i. Issue: Who inherits unpaid disability insurance? ii. Court: "inception of right" - K paying the proceeds was purchased before the marriage 1. Different from disability benefits because the payout is not compensating for lost wages (which would be community) 2. This is more for compensating a personal injury; which is traditionally separate property iii. Held: Unpaid disability benefit proceeds are separate property iv. Law: 1. Art. 2338 lists out the community property 2. Art. 2340 discusses the presumption of community 3. Policy was clearly H's: Obtained out of marriage, in his name, and payable to him alone 4. It doesn't matter when he got the cancer: The right to recover the benefits arose from the insurance contract which was the separate property of H formed before the marriage. a. H got the right to recover the proceeds before marriage, so the proceeds are separate

a. Noil v. Noil (152)

i. Issue: is prize money separate or community property? 1. Deeper: is it an earning?? ii. Competing reasoning: 1. Art. 2338 reasoning: W won the prize money using her labor so it should be community property a. Here, labor = completing a word search 2. Art. 2341 reasoning: "Prize money" is not specifically listed as separate property, so it falls under community property a. 2338: "all other property not classified by law as separate property" iii. Generally: winnings = community property 1. Test area: buy lotto ticket that was donated to you individually inter vivos by parent a. Clare says probably separate property: no labor (arguably scratching a ticket isn't labor) and comes from separate property via real subrogation from a donation (named as separate property specifically) subrogated to the winnings - assuming no labor, skill, or industry happened

b. Kees v. Kees (148)

i. Issue: is severance pay acquired after the marriage separate or community? 1. Presumption of community doesn't apply (remember the elements) a. ALWAYS do the whole analysis, including the presumption. ii. Rule: severance pay is H's separate property. 1. The severance pay was conditioned on getting fired, not compensation for past work. Thus, it is not an "earning" from during the marriage - not community. a. Not due to the effort, skill, or industry of the spouse 2. Severance pay was given a decade after divorce for a job held while marriage was still around 3. Court determines that the right to the severance pay was not acquired during the existence of the community - so its separate iii. The property acquired doesn't have to be money 1. Humble Oil case: royalties on land

a. Albert v. Albert (136)

i. Issue: is the apartment complex separate or community property? 1. Real subrogation applies 2. Vital: Is the new thing the same thing as the old thing, or did value change due to labor, industry, or effort of the community? ii. Rule: The apartments were the separate property of H. 1. Art. 2341: when a thing forming a part of the separate property of a house is converted into another thing, the mass of the separate property is not diminished. a. Donations inter vivos are separate property, so the original gift from H dad to H was H's separate property. b. Despite the Apartments changing form from apartments to money/interest, etc., "it" remained H's separate property. c. The subsequent cancellation of the note in exchange for the apartment complex was a real subrogation of H's separate property (stayed separate despite changing forms) iii. Trier of fact must trace the asset through time to see if it is the same thing as the original separate property which existed prior to the marriage. 1. Does not matter whose name is on the title of the thing! a. the test doesn't give a shit whose name is on it iv. Applied: Presumption of community (2340) was in favor of W, so H had to meet burden of proving real subrogation so his separate property is recognized as separate. 1. Property can be traced back to an agreement made before the marriage! Beware of labor, industry, effort expended that changed the value of the thing.

a. Hare v. Hodgins (323)

i. Issue: whether the court correctly partitioned a divorced couple's community property interest in the employee spouse's defined benefits pension after it matured. ii. Law: 1. Termination of the community does not freeze the value of each spouse's undivided interest in the community assets 2. Each spouse continues to be an owner of the assets unitil they are portioned and, are entitled to benefit from any appreciation in their value. 3. If substantial post-community increases in the pension benefits were due to the employee spouse's individual meritorial efforts or achievement, and not related to prior contributions ascribable to the community, the percentage of the pension asset recognized as community should be decreased accordingly 4. Valuating and Dividing the pension right a. In determining the value of each community asset, including the community interest in the pension right, the court valuates the asset as of the date of the partition trial on the merits i. Therefore, when the court paritions the community interest in a pension right by granting a former spouse money/property in lieu of an actual percentage of the pension payments, the court has to valuate the community interest in the pension right and the spouses portion of that right as of the time of the partition trial . 5. Comparable Equitable Principles a. Present value: the benefits payable must be adjusted and discounted for contingencies such as mortality, interest, probability of vesting, probability of continued employment, and retirement life expectancy i. Court calculates the present cash value of the community benefits and awards the non-employee spouse their rightful share in a lump sum or form of equivalent property. b. Fixed Percentage: court comes to a fixed percentage for the non-employee spouse of any future payments the employee spouse receives under the plan, payable if and when paid to the pensioner. i. Percentage is determined by dividing the length of tine worked under the plan during the marriage by the total length of time worked toward earning the pension. ii. AKA "Sims formula" iii. Applied: the pension right that belonged to the community was not partitioned prior to its maturity in 1988, so each spouse is entitled to a distribution based on the actual value of the fully matured pension. a. It would be erroneous to value the pension at partition at its maturity date in 1975 when the pension right was subject to contingencies preventing its maturity

a. Social Security benefits (352)

i. LA R.S. 9:2801.1 1. When federal law or the provisions of a statutory pension or retirement plan, state or federal, preempt or preclude community classification of property that would have been classified as community property under the principles of the Civil Code, the spouse of the person entitled to such property shall be allocated or assigned the ownership of community property equal in value to such property prior to the division of the rest of the community property. Nevertheless, if such property consists of a spouse's right to receive social security benefits or the benefits themselves, then the court in its discretion may allocate or assign other community property equal in value to the other spouse. ii. Comeaux v. Comeaux (353) 9:2801.1 Applies retroactively

a. Albritton v. Allbritton (191)

i. Law: 1. Focus: intent of the donors concerning their respective donations - were they to D in particular or to P and D jointly? a. The intention of the donor controls the identity of the donee(s). It is up to the supposed donee to prove intent of the donor. 2. The burden of overcoming the presumption of community property set in 2340 rests on the party that asserts property is separate. a. To meet this burden, proof must be clear, positive, and of legally certain nature that the property was separate instead of community Remember: discovering the intent of a dead donor is best determined by the Trial Court - not really appellate court's place to do such a thing.

a. Gautreau v. Gautreau (244)

i. Law: 1. The mere mixing of separate funds and community funds in the same account does not of itself convert an entire account into community property - it is community property only when separate funds are commingled with community funds indiscriminately so that separate funds cannot be identified or differentiated from community funds OR when the separate and community funds are mingled in the initial acquisition

taxation

i. Old Rule: community property states used to provide that couples could file a joint tax return and in turn pay less in taxes. Separate property states couldn't provide such a loophole and suffered for it. 1. During this time, it was a huge incentive for a state to switch to community property regime approach. ii. New Rule: both regimes (community and separate) can file joint tax returns

separate property

i. Ownership runs with title: each spouse owns their own property even in marriage 1. Could opt-in to share

a. Application of Presumption

i. Predicate facts to trigger the 2340 presumption of community property 1. Property is possessed 2. By either spouse 3. During the existence of community property regime

a. Defined benefit plan: employee earns the right to specified benefits after a certain amount of time on the job

i. Promise a specified monthly benefit when the employee retires ii. Neither employer nor employee actually makes a specified contribution to the plan, and there is often no account maintained in employee's name. iii. Rely on the assumption that the employer will be able to pay the promised benefits in the future: which doesn't always happen iv. Retirement plan (usually offered by an employer) where benefits are determined by reference to employee's years of service, salary, etc. v. Traditional "pensions" are defined benefit plans. vi. Examples: 1. FERS (Federal Employees Retirement System) 2. LASERS (Louisiana State Employee's Retirement System) a. A member who joined LASERS on or after July 1, 2006, will have his/her retirement benefit calculated as follows: b. [Years of Service] x [Formula %] x [60-month High Average Salary] = Annual Retirement Benefit i. Ex: 30 Years of Service x 2.5% x $30,000 = $22,500 3. NOMERS (New Orleans Municipal Employees Retirement System)

a. Tatiana T. Due v. Paul H. Due (45)

i. Property in question: H's contingency fee contract. 1. If a client fires a lawyer before the case ends, the lawyer can still charge for work done. Earnings for work done during the marriage typically = community property. ii. Holding: 1. Contingency fee contracts are community property, but the value of such contracts are not known at the time of divorce, meaning they could be worth nothing. a. Even if the value of a contract is not known or knowable at the time of divorce, that doesn't mean it can't be community property. b. Contracts that have an unknown value = aleatory contracts i. Aleatory contracts still are part of the community property regime because the K still has value. ii. If H dies, the heirs still get something - even if that "something" is unkown. iii. Law: 1. All property acquired by the labor and industry of the spouses during the marriage belong to the community of acquets and gains. 2. Just because a K is aleatory does not mean it isn't part of the community of acquets and gains. a. Aleatory K: rights and obligations of parties depend on the happening of an uncertain event and there is a chance of either gain or loss. b. The distinction of whether the contract is aleatory or not is not important - both create property right 3. BUT: contingent fee contracts which are the property of the defendant's law partnership cannot be assets of the community since the partnership is a separate entity. But, the husband's interest in the partnership is a community asset

a. Ownership of assets acquired over time

i. Purchase for entire amount: look for mix of funds and if community funds used are an "inconsequential" amount. ii. Third-party financed sale iii. Seller financed sale 1. Paying full price over time (installments) iv. Exception: Bond for deed/ acquisitive prescription/ conditional sales 1. Ownership transferred at final payment 2. "bond for deed" - no title is given to the immovable until the final payment is made a. Look for a Bond for Deed agreement: look at payment history for separate/community payments to see which, if either, is "inconsequential" v. There is no pure prohibition on mixed title concerning bank accounts (arguably) 1. Counter: bank amount = new thing a. This is not the Louisiana Courts' views 2. Louisiana Court View: Separate & community property can live together in the same bank account while staying separate! a. Exception: McMorris - indiscriminate commingling of funds i. "Mixing of funds in the same account need not extinguish the separate character [of the funds]; only indiscriminate commingling, so that one cannot identify or differentiate among the funds, results in the account being deemed community." (thanks to the presumption of community) b. Exception: Longo - mortgages i. Bought with separate property and made payments with community property = separate property! ii. The house was acquired before the marriage and is therefore separate property, even though mortgage payments were made with community funds.

a. CLASS HYPO - EXAM PREPARATION!

i. Question: 1. Spouse A is injured during the marriage and gets a payout of 300,000, with half to personal injury and half to lost wages. Before the injury, Spouse A made $50,000 per year. You know the couple divorced two years after the settlement. Attorney's fees are 30 percent of the total settlement. How much should Spouse B get in the partition at divorce? ii. Math: 1. 300,000 divided by half is 150,000 2. 100,000 of the 150,000 is for lost wages. 3. SEE USE OF % IN POWERPOINT EXAMPLE iii. Answer: 35,000

a. Spanish v. American Rule

i. Spanish: Fruits of separate property are community property. (Idaho, Wisconsin, Texas) ii. American Rule: Fruits of separate property are separate property. (Arizona, California, Nevada, New Mexico, Washington)

Earle v. Earle (78)

i. Summary: W doesn't get compensated because she lived with H for 6 years after he got the degree. 1. 6 years is long enough, but we don't know where the line is drawn. 2. How long is enough? What about 3 years? Make the argument. 3. Therefore, if the parties are married for enough time after the degree is obtained to enjoy the benefits of the increased earning potential, then there is no need for reimbursement. ii. Remember limit: "if a contributing spouse has already benefited from the other spouse's education through an improved standard of living or an accumulation of community property, there is no art. 121 award to give.

a. Depner v. Depner (94)

i. The corporation cannot share in a personal relationship between physician and patient" 1. Any "goodwill" attributed to corporation in that context is actually the individual good will (not enterprise goodwill) of the doctor and therefore not value of the corporation owned by the individual. 2. "individual goodwill" is good to argue for if you're the doctor because: a. Corporation is valued less (less to split with wife); and b. You don't split in pot any "individual goodwill" i. Not corporation's reputation (which is community property)

Succession of William E. Faget (211)

i. The donation here was over a single asset now, not a decision that will greatly affect a community in a future sense. 1. Therefore, article 2343.1 doesn't apply and there is no form requirement. ii. Issue 1: Does 2343.1 apply if there is a contractual matrimonial agreement that creates a separate property regime? iii. Issue 2: Does the transfer of one piece of property from separate to community create a matrimonial agreement that requires judicial approval? iv. Law: 1. Relevant Code Articles: a. 2329: Exclusion or modification of matrimonial regime i. Read it, shits long b. 2343.1: Transfer of separate property to the community i. "The transfer by a spouse to the other spouse of a thing forming part of his separate property, with the stipulation that it shall be part of the community, transforms the thing into community property ii. As to both movables and immovables, a transfer by onerous title must be made in writing and a transfer by gratuitous title must be made by authentic act. 2. Matrimonial agreements vs. interspousal agreements a. Matrimonial agreement: concerns the classification and management of future acquisitions i. Requires court approval b. Interspousal agreement: concerns existing assets, not future acquisitions i. Does not require court approval 3. The agreement only pertained to a single transaction over a single asset - therefore it is not a matrimonial agreement and therefore does not require court approval to be valid. a. Art. 2329: i. Permits spouses to enter into matrimonial agreements before or during marriage as to all matters not prohibited by public policy. ii. Allows spouses "to subject themselves to the legal regime by a matrimonial agreement at any time without court approval" b. Art. 2343.1 i. "the transfer by a spouse to the other spouse of a thing forming part of his separate property, with the stipulation that it shall be part of the community, transforms the thing into community property" 1. Does not require the legal regime to pre-exist an agreement to transfer. 2. Reconcile with the Chambers case: what they really meant was whether the transfer took place during the marriage, not the community regime. ii. Here, the residence agreement satisfies the elements of 2343.1 since it was executed by authentic act 1. Effect: makes the property community property.

a. Art. 2341: Separate Property in Louisiana

i. The separate property of a spouse is his exclusively. It comprises: 1. Property acquired by a spouse prior to the establishment of a community property regime; 2. Property acquired by a spouse with separate things or with separate and community things when the value of the community things is inconsequential in comparison with the value of the separate things used; property acquired by a spouse by inheritance or donation to him individually; 3. Property inherited or donated to the spouse individually 4. Damages awarded to a spouse in an action for breach of contract against the other spouse or for the loss sustained as a result of fraud or bad faith in the management of community property by the other spouse; 5. Damages or other indemnity awarded to a spouse in connection with the management of his separate property; and 6. Things acquired by a spouse as a result of a voluntary partition of the community during the existence of a community property regime.

a. Ellington v. Ellington (102)

i. The standard of review that the court of appeals is using for the trial court's determination of the value of the asset 1. The standard of review is manifest error on appeal 2. Deferential standard to trial courts: they know the facts better than the appeals court ever can. ii. 9:2801-2

a. Pellerin v. Cerise (82)

i. W fails to overrule TC determination that H's controlling interests in Pellerin Laundry Machinery Sales Co. was his separate property in which their community had no claim for enhancement in value or for dividends. ii. Issues: 1. Whether the wife is entitled to credit to the community for the increase in the husband's controlling interest in a family corporation that occurred during marriage; 2. Whether the corporation unreasonably withheld dividends on the company's stock, which would have fallen into community property during the marriage. iii. Court: 1. Wife has the burden of showing that the increase in value was the result of uncompensated labor during the marriage. 2. The labor was compensated via H's salary and bonuses already. So H's value already went in to the community pot. So, W is not entitled to more money under art. 2368.

a. Stratham v. Stratham (110)

i. Where one spouse holds a professional degree or license and the goodwill results solely from that professional's personal relationship with clients, the goodwill is not included in the community

a. Sims v. Sims - Defined contribution plan (289) i. Basic Calculation:

portion of pension attributable to creditable service during existence of the community/pension attributable to total creditable service x 1/2 x annuity (or lump sump payment) i. We can't fil in "pension attributable to total creditable service" yet! 1. Here, the court provided estimates of what it may look like, but cannot make a judgment until the spouse retires! a. We can fill in the top part of the equation once the spouse actually retires. ii. Law: The community interest in the pension plan or in payments made to or for the husband or as result of his employment or contributions to such plan during the community 1. The non-employed spouse is entitled to judgment recognizing that spouse's interest in proceeds from a retirement annuity/profit-sharing plan or contract, if and when they become payable, with the spouse's interest to be recognized as one half of any payments to be made, insofar as they are attributable to the other spouse's contributions or employment during the existence of the community. iii. Effect: wife has a proportionate interest in the retirement annuities, if and when they become payable, without fixing a present monetary value for the interest since it has none 1. Community interest in retirement plans have no immediate redeemable cash value. Until employee spouse dies, is separated from service, retires, or becomes disabled, no value can be fixed on his right to receive an annuity/lump sum payments 2. When the annuities do become due, they have a value, and the non-employed spouse is entitled to receive the proportion of them recognized as attributable to the other spouse's employment during the existence of the community iv. Applied: pg. 293 v. Held: wife is entitled to whatever amount can be attributable to H's employment for the 19 years and 5 months of work done during the marriage. Cannot be calculated until the works stops and the account becomes payable! vi. Subsequently: husband remarried and died before retiring. SO, he had collected no retirement benefits, and upon his death his right to the benefits ceased to exist. Wife 1 got no money since she had an interest in a contingent right.