Basic Principles

Question 1

These statutory definitions apply unless the character of an asset has been altered by:

Answer 1

1. the parties’ agreement (premarital or during marriage);
2. parties’ conduct; or
3. how title was taken.

Question 2

Separate Property (SP):

Answer 2

1. Property owned by either spouse before marriage; or
2. Property acquired during marriage by gift, will, or inheritance; or
3. Property acquired during marriage with the expenditure of separate funds
4. The rents, issue, and profits derived from separate property.

Question 3

Property acquired during marriage with the expenditure of separate funds - we call this:

Answer 3

We call this “source” rule or “tracing.”

Question 4

Community Property (CP):

Answer 4

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.

Question 5

There is a community presumption:

Answer 5

all assets acquired during the marriage are presumptively
community property. Absent a showing of the parties’ agreement or that title was taken in a form that overcomes the community presumption, the burden of proof that a particular asset is separate property is on the party so contending.

Question 6

California has extended its community property system – as of 2004, the community property system applies to WHOM upon filing a Declaration of Domestic Partnership with the Secretary of State

Answer 6

registered domestic partners

Question 7

California has extended its community property system is only available to:

Answer 7

(i) same sex couples, and
(ii) elderly opposite-sex couples receiving Social Security benefits.

Question 8

Legality of Same Sex Marriage in CA

Answer 8

Legal

Question 9

Start every essay like this:

Answer 9

1. CA is a CP state.
2. There is a community presumption where all assets acquired during the marriage are presumptively community property
3. There are areas of SP:
   
   1. Property owned by other spouse by marriage
   2. Gift will or inheritance
   3. Expendature of other funds
   4. Rents Issues and Profits

Question 10

When did the economic community end?

Answer 10

1. Permanent Physical Seperation; and
2. Intent (only 1 party necessary) not to resume the marital relation

Question 11

In a divorce setting, when are earnings no longer CP?

Answer 11

Upon filing for divorce

Question 12

Continuing Jurisdiction and Division under this

Answer 12

For community property not divided on divorce, the court retains continuing jurisdiction to award CP that was not previously adjudicated, and on motion the omitted or
unadjudicated CP will be divided 50-50 unless the court finds that “the interests of justice require an unequal division.”

Question 13

How is community property handled on divorce?

Answer 13

Absent a property settlement agreement, all community property must be divided equally

Question 14

Disparity in earning power can be considered only as to:

Answer 14

spousal support (alimony) and child support

Question 15

Each and every community asset (and liability) must be divided

Answer 15

50/50

Question 16

Economic Circumstances exception

Answer 16

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).

Question 17

Statutory exceptions to “equal 50/50 division on divorce” rule, with one spouse ending up with more than 50% of total value:

Answer 17

1. One spouse misappropriates CP, whether before or during pendency of divorce.
2. One spouse has incurred educational debts; treated separately as separately incurred debt (take law school loans with you!)
3. One spouse incurred tort liability not based on activity for benefit of the community.
4. Personal injury award is CP but on divorce is awarded to injured spouse (unless interests of justice require otherwise).
5. “Negative community” – community liabilities exceed assets; relative ability of spouses to pay debt is considered (concern is protect creditors).

Question 18

When Can you gift CP?

Answer 18

neither spouse can make a gift of CP without the other spouse’s written consent

Question 19

Whats the consequence if one of the spouses unilaterally makes gift of CP w/o written consent?

Answer 19

set the gift aside in its entirety

Question 20

If spouse does not learn about the donation of CP till after the divorce - can do what and recover from who?

Answer 20

• set aside the gift as to her 1/2 CP
• recovery will be from either the donee or former spouse - whichever is easiest

Question 21

Only exception to party not being able to give CP away is when:

Answer 21

US government savings bonds are involved.

• In this case, federal law trumps, and there is federal preemption.

Question 22

Each spouse has the power of testamentary disposition over

Answer 22

all of his SP, but only over ½ of the CP.

Question 23

Widows Options:

Answer 23

1. take under the will and receive her residuary estate
2. take against the will, by claiming her ½ CP and relinquishing all testamentary gifts

Question 24

community credit presumption

Answer 24

Funds borrowed during marriage, and goods purchased during marriage, are presumptively community credit.

Question 25

borrowed funds (and credit purchases) are classified according:

Answer 25

to the primary intent of the lender

We look at where the lender is looking for satisfaction of the debt.

Question 26

Confidential relationship raises fiduciary duty; presumption of undue influence

Answer 26

Spouses are subject to fiduciary duties that arise from their confidential relationship, 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. That spouse has the burden of proof to show she did not breach her fiduciary duty.

Question 27

What is a breach of the spouses fiduciary duty?

Answer 27

a grossly negligent and reckless investment of community funds is a breach of a spouse’s fiduciary duty.