4) Particular Assets Flashcards
joint bank account
- -presumed to be CP at divorce
- -can overcome by: tracing OR written agreement (not just deposit agreement)
business owned by 1 spouse: how starts
1) before marriage
2) during marriage with SP funds
SP business: rule
–rents/profits from SP are SP
BUT, time, effort, and labor of spouse during marriage is community asset, profits from the SP business during marriage are from community efforts
SP business: how divide profits: ways
1) Pereira
2) Van Camp
Pereira: use when
owner spouse’s labor is major source of increase in value
Pereira: def
reasonable return on investment. Reimburses separate estate for return on separate capital, everything else is com property
Pereira; formula
(SP investment) x legal interest rate x years of business during marriage = SP share of increase
(plus whatever SP put in to start with) – everything else is CP
Pereira; result
benefits CP – awards greater amount to community
Van Camp: use when
increase in value is due to market forces or nature of capital (not labor of owner-spouse)
Van Camp: def
gives com reasonable salary for labors of owner-spouse, but the rest of the profits stay as SP
Van Camp: formula
Salary x (years of business/marriage) - any amounts paid for com expenses during years fo business = com share
Van Camp: result
usu benefits the SP more
Pereira vs VC: which to use?
as above, but courts will select whichever will award substantial justice between the parties
SP business that stays SP
was SP and owner spouse spends no labor, but paid someone else to do it out of the SP. All stays SP bc community did not enhance the value
CP business that turns SP: scenario
cp business but parties separate
CP business tha turns SP: result
apply reverse of VC or Pereira
partnership interest
CP if partnership was funded with CP funds
SP if p. was funded with SP funds (but salary = CP)
artistic work
if created during marriage, the art and copyright = CP
but if created before, = SP. remember when the labor performed
business + prof goodwill: def
intangible asset re reputation
business + prof goodwill: rule
CP if earned during marriage
business + prof goodwill: tests
1) market sales valuation (price it would command if business were sold), or
2) capitalization of past excess earnings (present value of future stream of income the GW generates)
degrees/licenses: rule
SP! (the diploma AND the debt–even if during marriage)
but, reimbursement
degrees/licenses: reimbursement
reimbursement available if:
1) community contributed to the edu
2) substantially enhances earning capacity
otherwise, com contribution = gift
degrees/licenses: reimbursement: com contributed
tuition, fees, books, supplies, transportation, spl living
NOT ordinary living expenses
*includes repaying premarital loans
can reduce if unjust
degrees/licenses: reimbursement: substantially increases earning capacity
presumed substantial benefit if payments made 10+ years before marriage ends (and not substantially bneefits otherwise)
no presumption for porfessional degrees / earning capacity – case by case
stock: if SP
then dividends, splits, appreciation, options to purchase more shares are SP (income or appreciation in value of SP is SP)
stock: exception
if you spend a ot of time managing your own stock that can be CP labor so then the profits become CP
unvested stock options as ee benefit
CP if stock agreement says given for past services + service was during marriage
stock options
if vests during marriage, CP
if awarded during marriage but vests after separation: prorated (determine share earned during marriage)
if awarded before marriage and vest after: SP
retirement bens
CP if earned during marriage (regardless of if vested) – a form of deferred compensation for income during marriage
retirement bens: valuation
if partly during marriage and partly before or after, must prorate
tetirement bens: time rule
calculated based on time spent at job–prorate based on years worked during marriage vs before/after
retirement benefits: contributions
calculate based on amount contributed while married (CP) vs not SP)
retirement benefits: how to actually give
if benefit not matured
1) court can retain jurisdiction til retire
2) present value calculated and other spouse gets that or assets of equal value
retirement: refusal retire
if ee spouse keeps working but retirement benefits have vested + matured, ex can start getting share
early/enhanced retirement bens
even of only offered/accepted after divorce, non-ee can still get share of enhanced bens
disability payments
CP if: designed to replace lost/reduced earning capacity to extent to which designed to replace earnigns during marriage
SP if: for loss of future earning capacity after marriage OR pain/suffering
military/va bens
fed preemption – must be SP
worker’s comp/DI
CP if lost earning capacity during marriage (even if received later–depends on when the injury was)
SP if earning capacity during unmarried times
disability vs retirement election
court won’t let you choose disability if sole reason is to detriment the com
effect of fed law
preemption, so if there’s a fed law like ex ERISA, then state law is preempted
severance pay
no clear rule
CP if: pay for work while married
SP if: for replacing future earnings and after marriage over
life insurance (-)
CP: cash-value policy paid for with CP funds
prorate if premiums paid partly from SP
life insurance: modern trend: whole life policy
pro rata division based on number of premium payments and which estate paid which
term life insurance policies: modern trend
series of divisible ks, final premium payment dictates character (Final Premium Rule)
life insurance + death
outside probate estate –> so probate court has no power to partition unless can prove fraud
property insurance: approaches
1) follows the characterization of the property it’s insuring
2) follows the source of payments for the policy
personal injury award
SP if for injury before marriage, or COA arose after separation OR bc of tortious conduct of other spouse
CP if COA arose during marriage.
courts can do interest of justice, injured spouse must get 1/2+
personal injury award: reimbursement
CP can get reimbursement if noninjured spouse paid expenses from SP or CP
credit acquisition: test
“intent of the lender”
intent of hte lender test
ch of property acquired on credit determined by what the lender is looking to for repayment of loan (SP or CP?)
SP only if creditor relied SOLELY on SP when extending credit (and old case “primarily”)
what did bank look at? down payment, marital income, good credit
loan SP –> CP
if started as SP (down payment) can become partially CP and need apportionment, if CP used to pay it down. Moore/Marsden calc. Figure out % paid by CP of the total mortgage to determine what CP gets from appreciation.
