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Click here for the full text of this decision FACTS:Karen and Danny Granger were married on May 24, 1999, and had two children during the marriage. In 2003, Danny purchased two life insurance policies, one from Monumental Life Insurance Co. in the amount of $150,000 and the other from Old Line Life Insurance Co. of America in the amount of $100,000. Danny named Helen Granger, his mother, and Elijah Granger, his brother, as beneficiaries of the Monumental policy. He named his mother, four brothers and two sisters as beneficiaries of the Old Line policy. Danny paid the premiums for both policies through automatic drafts from his Regions Bank account. The first Monumental policy premium was drafted on March 4, 2003, in the amount of $15, and the first Old Line policy premium was drafted in May of 2003. Danny died on Oct. 27, 2003. After his death, Monumental distributed the proceeds of its policy to Helen Granger and Elijah Granger. On March 22, 2004, Old Line filed suit, seeking to deposit funds in the court’s registry to resolve conflicting claims to the proceeds of its insurance policy. Karen, Helen and Danny’s four brothers and two sisters were named defendants. Karen filed a cross action against Danny’s mother, four brothers and two sisters, claiming that Danny’s gifts of her one-half community interest in the policies constituted fraud on her and on the community estate. The trial court ordered that Old Line’s policy proceeds be deposited into the registry of the court. After a bench trial, the trial court found that Danny had community funds in his possession when he purchased the Old Line policy and that one-half of the policy was Karen’s community property. The trial court, however, found that Danny used separate property funds to purchase the Monumental policy and, thus, the policy was Danny’s separate property. The trial court ordered that Karen recover one-half of the proceeds of the Old Line policy but that she take nothing on her claims regarding the Monumental policy. The trial court also ordered that Danny’s mother, four brothers and two sisters recover the other one-half of the proceeds of the Old Line policy. In its findings of fact and conclusions of law, the trial court stated as follows: “1. Danny and Karen were married on May 24, 1999, and ceased to live together as husband and wife approximately one year before his death as a result of an auto accident on or about October 27, 2003, in Lufkin, Angelina County, Texas. “2. Danny was totally disabled as determined by the Social Security Administration as of June 22, 2000, and was awarded Supplemental Security Income (“SSI’) which was paid monthly to him with payments being made to Sarah Reed for Danny beginning July 1, 2000. “3. Danny received $457.00 in SSI payments for each month during the year of 2003, through the month of his death in October 2003. The SSI payments paid to Danny because of his total disability was received by his sister, Sarah Reed, and thereafter paid over to Danny in cash payments. “4. Danny purchased a life insurance policy through Regions Bank accidental death insurance plan with an effective date of March 1, 2003, issued by Monumental providing for $150,000.00 for accidental death benefits. “5. Danny paid the monthly premiums to Monumental by a bank draft through Regions Bank in the amount of $15.00 per month with the first premium being paid on March 4, 2003. “6. Danny possessed no monies other than monies received by him through his SSI payments and gifts from family members at the time of the purchase of the life insurance policy on his life through Monumental. “7. Those funds on deposit on March 4, 2003, in Danny’s account with Regions Bank was the separate property of Danny. “8. Danny had no community property monies at the time of the purchase of the life insurance policy on his life with Monumental. “9. Danny designated his mother, Helen Granger, and his brother, Elijah Granger, as beneficiaries in equal shares of the life insurance proceeds to be paid under the policy issued by Monumental. “10. After Danny had purchased life insurance from Monumental on his life, he received a check from Willie Spikes, Jr., in the amount of $315.00 dated March 12, 2003, which was presumed to be community property of Danny and Karen. “11. Danny purchased a life insurance policy issued on his life by Old Line effective May 3, 2003, after Danny had in his possession those funds paid to him by Willie Spikes, Jr. in the amount of $315.00. “12. The cross-defendants proved that the life insurance policy issued by Monumental on the life of Danny was the separate property of Danny by rebutting the presumption that the same was community property by clear and convincing evidence. “13. At the time of inception of title by Danny of the Monumental policy[,] the policy was characterized as separate property because it was acquired by the use of separate property funds. “14. Cross-defendants failed to rebut the presumption that the life insurance policy purchased by Danny from Old Line during his marriage to Karen was not the community property of Danny and Karen.” An appeal followed. HOLDING:Affirmed. Under Texas Family Code �3.003(a), property possessed by either spouse during or on dissolution of marriage is presumed to be community property. To overcome the community property presumption, the burden is on the spouse claiming certain property as separate to trace and clearly identify the property claimed to be separate. A spouse’s separate property, the court stated, consists of the property owned or claimed by the spouse before marriage, the property acquired by the spouse during marriage by gift, devise or descent, and the recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage. Because Danny purchased the Monumental policy during the marriage, the policy is presumed to be community property. Danny’s relatives, however, with knowledge of his financial matters testified that he had no income from approximately October 2002 to March 4, 2003, other than his SSI benefits or their gifts to him, both of which were his separate property. Moreover, the relatives denied that he worked as a carpenter regularly during the last year of his life and said he was usually broke. Although Karen disputed their testimony, the court noted that in a bench trial the trial court is the sole judge of the credibility of the witnesses. Because Danny’s relatives testified that he did not have any income other than SSI and gifts from family from approximately October 2002 to March 4, 2003, and his bank records did not document any such income, the court found sufficient evidence to rebut the community-property presumption. Accordingly, the court held that the trial court did not abuse its discretion in finding the Monumental policy to be Danny’s separate property. OPINION:Griffith, J.; Worthen, C.J., and Griffith and Hoyle, JJ.

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