Comm Prop Essay

Question 1

Intro Paragraph

Answer 1

1) CA is a COMMUNITY PROPERTY STATE
2) There is a COMMUNITY PRESUMPTION: all assets acquired during the marriage are presumptively community property.
3) all property acquired BEFORE MARRIAGE or AFTER SEPARATION is presumed to be separate property.
4) In addition, any property acquired by GIFT, DEVISE, or BEQUEST is presumed to be separate property.
5) With these principles in mind, each item of property will be examined.
6) To determine the character of an asset, a court will trace back to the source of funds used to acquire it.
7) At divorce, the community assets are equally divided in kind, unless some special rule requires deviation from the equal division requirement or the spouses agree otherwise.

Question 2

Intro Quasi

Answer 2

Quasi community proper is property acquired by either spouse that would have been CP if the spouse had been domiciled in CA at the time of acquisition.

*QCP is treated as CP at divorce.

Question 3

Intro SP

Answer 3

• Separate Property is
  a) owner by either spouse BEFORE MARRIAGE
  b) acquired by GIFT, WILL, or INHERITANCE
  c) acquired by EXPENDITURE of SP
  d) rent issues and profits from SP
• A spouse’s SP remains SP at divorce.
• SP that increases in value during the marriage due to external factors does not affect its original classification.

Question 4

Transmutation

Answer 4

During marriage, spouses may change the status, or transmute, their property. A transmutation must

1) be made in writing; and
2) expressly declare that a change in ownership is being made; and
3) it must be consented to or accepted by the spouse whose interest is adversely affected
* a writing is not required for the gift of one spouse to another when
a) principally used by the spouse
b) not substantial in value in light of the financial circumstances of the marriage

Question 5

Overcoming CP Presumption

Answer 5

The presumption that property is CP at divorce can be overcome only by

a) a collateral WRITTEN agreement or
b) statement in the documentary evidence of title that the property is SP
* If there is no writing to the contrary, at divorce, any SP contributions to the acquisition of CP are reimbursed to the SP contributor.

Question 6

Spousal fiduciary Duty

Answer 6

• Spouses owe each other fiduciary duties with respect to management of CP
• A REBUTTABLE PRESUMPTION of UNDUE INFLUENCE arises when one spouse gains an advantage over the other in a property transaction; and

The spouse WHO OBTAINED THE ADVANTAGE BEARS THE BURDEN of rebutting the presumption.

Question 7

Education

Answer 7

At divorce, unless otherwise agreed, the community has an equitable right of reimbursement when community funds are

1) used either to pay for education or loans incurred for education or training; and
2) the education substantially enhances the earning capacity of the educated party

Question 8

Reimbursement of CP for Education

Answer 8

Reimbursement may be reduced or modified by any of the following circumstances:

a) the education or training is OFFSET by a community funded EDUCATION RECEIVED by the OTHER spouse
b) the education or training enable to recipient to engage in gainful employment that substantially REDUCES the need the recipient would otherwise have for SPOUSAL SUPPORT
c) the community has already SUBSTANTIALLY BENEFITTED
* there is a rebuttable presumption that if it is less than 10 YEARS between contributions and invitation of divorce, the community has NOT SUBSTANTIALLY BENEFITTED, but OVER 10 YEARS renders SUBSTANTIAL BENEFIT

Question 9

Cohabitation

Answer 9

CA does not apply CP law to unmarried cohabitants, rather, CA follows contract rules, enforcing EXPRESS CONTRACTS between non marital partners (unless sexual services are used for consideration).

If there is no express contract, a party may prove a contract IMPLIED by the behavior of the parties.

Question 10

Termination

Answer 10

Termination of Marital Economic Community begins at marriage and ends on the date of one spouse’s death or on the date of separation.

To terminate by separation, there must be a complete and final break in the marital relationship, which requires:

1) a spouse to EXPRESS AN INTENT to end the marriage TO the other spouse, and
2) CONDUCT consistent with that intent

Question 11

Labor

Answer 11

Labor performed by a married person is presumed to be community labor.

A spouse’s salary earned during marriage is presumed to be CP.

Wage recovery for labor during the marriage is CP.

Salary earned following separation is SP.

Question 12

Debt incurred during Marriage

Answer 12

1) Debt incurred by one spouse during the marriage is generally subject to ALL CP and SP of the debtor’s spouse.
2) One spouse’s debt incurred, NOT incurred for the BENEFIT of the community, during the marriage makes ALL OF THE CP and the DEBTOR’s SP liable for the debt.
3) SP of the non-debtor spouse is not liable.
4) At divorce, the non-debtor’s share of CP is unreachable for the debtor spouse’s personally incurred debt.

Question 13

CP vs. SP Business

Answer 13

Periera and Van Camp are only used when CP is used to enhance the value of an SP business.

Otherwise, an all CP business encompasses the goodwill/efforts of the spouse in the valuation.

Question 14

Judgments/Settlements

Answer 14

1) funds to REPLACE WAGES earned during the marriage are CP

Question 15

Increases in Value of SP

Answer 15

1) SP that increases remain SP unless CP funds or labor were used to enhance the value.

Question 16

Premarital Agreement

Answer 16

Parties can contract out of CP if

1) agreement in WRITING
2) entered into VOLUNTARILY
a) involuntary when not represented by counsel unless
b) was ADVISED to consult an attorney at least 7 DAYS before the agreement was signed
c) right to independent counsel was WAIVED
d) was full informed of the basic EFFECTS of the agreement in a SEPARATE WRITING
3) not be UNCONSCIONABLE
a) a judge finds
b) the objecting party was NOT FULLY ADVISED of the FINANCIAL STATUS of there other party
c) a disclosure of FINANCIAL status was not waived
d) the party could not reasonably have obtained the information on her own

Question 17

Putative Spouse

Answer 17

1) Is not lawfully married, but has a SUBJECTIVE GOOD FAITH belief that she is lawfully married.
2) All property that would be CP or QCP if the marriage WERE LAWFUL is QUASI MARITAL PROPERTY
3) and the spouse has the same rights in QMP as she would in CP or QCP

Question 18

Doctrine of Estoppel

Answer 18

Applied to deny a lawful marriage when

1) one spouse has ASSURED the other
2) that they are LAWFULLY married; or
3) has KNOWN the marriage was not lawful; and
4) has continued to enjoy the BENEFITS of marriage

Question 19

Child Support from a Prior Relationship

Answer 19

1) treated as a debt incurred BEFORE MARRIAGE
2) the DEBTOR spouse’s, CP, SP, of QMP are liable for the debt incurred before marriage
3) nondebtor spouses’s CP, SP, QMP are not liable

Question 20

Debts after Separation, Before Dissolution

Answer 20

1) Unless there is a separation agreement, each spouse remains personally liable for debts incurred by the other spouse for COMMON NECESSARIES OF LIFE.
2) A spouse is not liable for debts unassigned to her by the court at dissolution.

Question 21

Van Camp in apportioning the SP vs CP components of a business

Answer 21

• Generally used when the managing spouse’s services were ordinary and it is the CHARACTER of the business that is responsible for the growth/productivity.
  1) Managing spouse’s services are valued at the going MARKET SALARY for such services
  2) FAMILY EXPENSES paid from the business earnings are SUBSTRACTED from the value of the manager’s services
  3) the REMAINDER = CP portion of the business
  4) the rest of the business is the SP of the managing spouse

(salary for entire duration - household contribution) = CP

Total value at time of trial - CP = SP

Question 22

Perieira

Answer 22

• Generally used when MANAGEMENT BY THE SPOUSE, was the primary cause of growth/productivity.
  1) Begins with SEPARATE CAPITAL and imputes a fair rate of return based on the current legal interest rate

Principal + (fair rate of return x principal) = SP or

P + R(P) = SP

Total value at closest time to trial - SP = CP