Basic Principles Flashcards
What is Separate Property?
i)Property owned by either spouse before marriage; ii)Property acquired during marriage by gift, will, or inheritance; iii) Property acquired during marriage with the expenditure of separate funds; iv)The rents, issue, and profits derived from separate property
What is Community Property?
Property, other than separate property, acquired by either spouse during marriage. The most common examples are (i) salary or wages earned by either spouse, and (ii) the income from community assets
California law on Community Property:
Community Presumption, all assets acquired during marriage are presumptively CP, burden of proving otherwise is on that party trying to prove it
Who does CP apply to?
Married spouses, Domestic Partners who have registered with secretary of state (same sex couples AND elderly opposite‐sex couples receiving Social Security benefits)
How to start all essays in CP questions:
California is a community property state, there is a community presumption where all assets acquired during the marriage or presumptively community property. There are areas of separate property: property owned by either spouse during the marriage, property acquired during marriage by gift/will/inheritence, expenditure of separate funds, and rents issues profits
When does the economic community end?
Permanent physical separation AND intent not to resume the marital relation by 1 party (even faking a marriage=marriage)
How to figure out if CP or SP?
When was the actual work put in to get it? So if they write a book before marriage, royalty payments during marriage are still SP)
How is CP handled on divorce?
When is disparity in earning power considered?
Every single asset is split 50/50 (meat cleaver everything), earning power is only considered as to Spousal Support (alimony) and Child Support
What exception is there to the typical CP division of property?
Economic Circumstances Exception=can have non‐pro rata division, giving particular asset wholly to one spouse and “cash out” other spouse with other assets (with each spouse getting 50% of total value. Examples:
Family Residence: Loss of residence and loss of
family home would uproot couple’s minor children
Closely Held Corporation; Pension (giving all of H’s pension to H, W takes other assets)
Statutory Exceptions to 50/50 splits
MISAPPROPRIATION of CP by 1 party
EDUCATIONAL DEBTS (treated as separately incurred debt)
TORT LIABILITY: any tort liability NOT for benefit of the community
PERSONAL INJURY - award=CP, on divorce award goes to injured spouse
COMMUNITY LIABILITY EXCEEDS ASSETS - ability of one spouse to pay debts is considered
Rules regarding gifts of CP:
Neither spouse can make a CP gift without the other’s WRITTEN CONSENT. If spouse gifts CP away, can take back, or on divorce take your 1/2 worth of CP.
If you discover the gift after spouse’s death can set aside
When can a gift of CP NOT be voided?
If CP is used to purchase U.S. government savings bonds, and then the bonds are gifted to another third party, spouse can’t recover
Rules for when spouse devises CP away thinking it was SP?
WIDOW’S ELECTION RULE: The spouse can either take UNDER THE WILL or TAKE AGAINST THE WILL (all testamentary gifts in her favor are destroyed)
Rules for loans from bank:
There is a “community credit presumption” - rebuttable. Look at PRIMARY INTENT OF THE LENDER (what lender is looking at for satisfaction of debt, so if that satisfaction would be SP, then it’s SP see p. 8/9) Credit standing is still community property
Duty owed to your spouse?
Imposing a duty of the highest good faith and fair dealing with each other. If one spouse gains an advantage from a transaction, a presumption of undue influence arises. Burden on advantaged spouse
