Term
| Personal Injury Awards (classification) |
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Definition
RULE: If cause of action arose during the marriage = CP; if cause of action arose before marriage or after permanent separation = SP
At Divorce: CP personal injury awards will be awarded entirely to the injured spouse unless the interest of justice requires otherwise |
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Term
| Retirement Benefits (classification) |
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Definition
RULE: If earned during the course of the marriage = CP
At divorce, proration (time rule) = # years of service while married / total yrs of employment up to retirement age = CP%
At death, if nonparticipant spouse dies before EE-spouse, interest terminates on death (federal preemption) |
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Term
| Disability Pay & Worker's Comp Benefits (classification) |
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Definition
| RULE: Treated as wage replacement - classified according to when they are received, not when earned. If received after divorce, SP. |
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Term
| Severance pay (classification) |
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Definition
| Courts are split: If replaces future wages, after divorce or separation would be SP. If arose from collective bargaining agreement and was earned during marriage, CP. |
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Term
| Stock Options (classification) |
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Definition
RULE: If option is awarded during marriage, but does not vest until after economic community has ended, the proration formula that is used depends on primary intent of ER granting the option.
Scenario #1: if to reward for past services, Marriage of Hug formula (years from date of employment to date marriage ends / years from date of employment to date options become exercisable) = CP interest
Scenario #2: to encourage to stay w/ company, Marriage of Nelson (years from date options are granted to date marriage ends / years from date options granted to date options become exercisable) = CP interest |
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Term
| Goodwill (classification) |
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Definition
| ______ of a professional practice (to the extent acquired during the marriage) is CP subject to division on divorce. This includes those qualities that generate income beyond that derived from the professional's labor and reasonable return on capital. Established by expert testimony. |
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Term
| Educational Expenses (classification) |
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Definition
RULE: Generally, not CP, but the community may be entitled to a reimbursement if CP funds were used to pay for the education or training & the education enhanced the earning capacity of the spouse.
Exception: NO reimbursement if: (1) community already benefitted (10 year presumption), (2) other spouse received community-funded education to offset, (3) need for spousal support is reduced by education or training |
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Term
| Transmutation Requirements |
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Definition
| Define: A _____ is an agreement between spouses to change the character of an asset or series of assets. Must be: (1) made in a written express declaration, (2) signed by spouse who is adversely affected, (3) must expressly declare the change of ownership being made |
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Term
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Definition
Increase due to personal skills, effort, labor (favors CP)
Formula: Orig. Principal + (10%*Year*Value of Business @ time of marriage) = SP; rest is CP |
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Term
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Definition
increase due to valuable company or asset, capital investment was major factor in growth (favors spouse's SP)
Formula: Value of spouse's services at market rates x # of years - family expenses paid from CP*# yrs = CP; rest is SP |
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Term
| Reasons to deviate from equal division of assets at divorce |
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Definition
1. Misappropriation by one spouse
2. Liabilities exceed assets
3. Educational debts are assigned to spouse who received the education
4. Tort liabilities are assigned to tortfeasor spouse if liability was not for the benefit of the community
5. Family home may be awarded to person who is given custody of minor children |
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Term
| Reimbursement Rules (3 situations) |
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Definition
1. Spouse uses CP to improve own SP (feathering one's nest) - community has reimbursement claim for greater of cost of improvement, or enhanced value
2. Spouse uses CP to improve other spouse's SP, split (some presume gift, others allow for reimbursement)
3. Spouse uses SP to improve CP, anti-Lucas statutes (divorce - DIP), and Lucas statues (death) |
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Term
| Whole life insurance policy (classification) |
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Definition
| Proration rule: principle debt reduction by CP / purchase price |
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Term
| Term life insurance policy (classification) |
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Definition
| RULE: Last premium paid determines character. If last paid with community funds = CP. If separate funds = SP |
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Term
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Definition
When to apply: when spouse acquires property prior to marriage, but uses CP to pay off mortgage
Determine CP/SP interest by proration formula: principal debt reduction attributable to CP / purchase price = CP %
Principal debt reduction attributable to SP / purchase price = SP % |
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