ALL CP TERMS Flashcards
Community Property (CP)
California is a CP state. CP is property other than separate property, acquired by either spouse during marriage. All assets acquired during marriage are presumptively CP. Upon divorce, CP is divided equally, 1/2 interest.
Separate Property (SP)
All property acquired before marriage or after permanent separation, or after divorce is considered separate property (SP). In addition, any property acquired by gift, devise, or bequest is presumed to be SP. Any property acquired with SP funds are also presumptively SP. Upon divorce, each party retains their own SP.
Quasi Community Property (QCP)
QCP is property acquired while domiciled in a non-CP state that would have been CP had the couple been domiciled in CP.
Marital Economic Community
The marital economic community begins at marriage and ends at either permanent physical separation, divorce, or death of a spouse.
Here, the marital economic community began (date of marriage). It ended in (when there was physical separation - no intent to continue marriage.)
Distribution of Community Assets
Upon divorce, each spouse gets 1/2 of each community asset unless the court determines the interest of justice require so.
Pre-Nupital Agreement
A pre-nupital agreement is one made before marriage and is to become effective upon the marriage, in which parties agree that each party’s earnings will remain separate property so long as the agreement was entered into voluntarily. A pre-nupital agreement will be found involuntary unless the party challenging the agreement was 1) represented by independent legal counsel at the agreement was signed or advised to speak to independent legal counsel and waived such right in a separate writing. 2) given 7 calendar days to sign and 3) if not represented by independent legal counsel, was fully informed in writing of the terms and rights of the party and the enforcing party must have executed a document declaring he got the information and can identify who provided it. 4) not under duress, fraud or undue influence.
form of title
Taking title to CP in one spouse’s name alone does not defeat the CP presumption
Source of funds/ tracing
One may rebut the CP presumption by tracing the source of funds used to purchase the property to SP funds.
Burdern of proof is on the spouse claiming SP
Transmutations
Transmutations are agreements between spouses to change the character of the asest from CP to SP or SP to CP. Beginning Jan 1 1985, transmutation of an asset must be in writing, expressly indicating the intent to transmute the property and signed by the party whose rights are adversely affected.
exhaustion tracing
A spouse may recover SP, when at the time the asset was purchased, community funds in the account were exhausted to pay for family expenses.
Direct tracing
A spouse may recover SP, when at the time the asset was purchased, 1) SP funds were available and 2) the spouse with the commingled account (meaning CP + SP) has the burden of proof that she intended those separate funds to be used to purchase a SP asset.
Presumption of women’s SP before 1975
Title in W’s name alone presumes her SP if prior to 1975.
Anti Lucas/ Joint title
Funds held in joint savings account are presumptively CP. Any SP used for the purchase is entitled to reimbursement.Reimbursement includes 1) down payment 2) payments for improvements and 3) principal payments (but not mortgage interest, taxes, insurance)
Presumption
The earnings of each spouse during marriage are presumptively CP
breach of fiduciary duty
+ Remedy for breach
Each spouse owes a fiduciary duty of good faith and fair dealing and to use highest good faith and fair dealing with each other.
Each spouse has a duty to disclose of all material facts about community assets and debts.
breach- Not disclosing a material fact regarding debt
+ remedy for breach is that the harmed spouse will receive more than half of the CP upon divorce.
debt for necessaries of life
A spouse’s SP is liable for her own debts, but not for the debts of the other spouse unless the debt was incurred for necessaries of life. These can be paid from debtor’s spouse SP first, then CP, then non debtor’s SP.
Post separation debts
Debts acquired after permanent separation are separate property and the debtor spouse will be liable to his creditors for such debt.
Comingled bank accounts
Available community funds are presumed to have been used to pay for family expenses. Absent a reimbursement agreement, a gift is presumed when separate funds are used to pay expenses.
Moore’s formula, CP pays off SP
When Cp funds are used to pay off purchase price of SP, then at dissoultion, the SP and CP estates will receive a pro rata share.
Where CP funds are used to pay off the purchase price of a home originally purchased with SP funds, the CP interest is the amount of prinicpal reduced divided by the original amount of loan. so $44k / $50k = cp interest of the home’s current value.
CP reimbursement
When CP assets are used to improve spouses own, the community is owed back reimbursement for the contributions. There is a split authority as to how the community should be reimbursed, community should be reimbursed for either the total contrubiton to the SP or appreciation value to the SP, whichever is greater.
Here H used a joint bank account, CP asset, to pay off his motorcycle loab/debt. In this case, the communtiy is owed the total contribution of $10k for the pay off payments towards the motorcycle loan. It is likely the motorcycle would depreciate in value, the reimbursement method would be the greater amount.
Thus, CP is owed $10k for the loan to pay off H’s SP.
Gifts form of title
Taking title to CP in one spouse’s name alone does not defeat the CP presumption. Exception: where one spouse intends to give the other spouse a gift and title is taken in a way to evidence the gift, the property will be the SP of the gifted spouse. There is no writing agreement
Loan + personal credit
The personal credit of a spouse belongs to the community during marriage. Thus a loan taken out while married is a community debt unless the lender’s primary intent for giving the loan was the spouses SP used as collateral.
