Community Property 1

Question 1

*CP Exam Analysis:

Answer 1

1) INTRO
Then for EACH item of Pr: 
2) Source
3) Actions
4) Statutory presumptions, and 
5) Disposition/Division.

Question 2

• INTRO paragraph:
  1) Since H&W were DOMICILED in Calif., where they were validly M, Calif. CP law applies. 2) Since Calif. is a CP STATE …

Answer 2

3) all Pr Acquired DURING M is Presumed CP 4) Pr acquired BEFORE M/after LEGAL. Sep., or by GIFT /INHERITANCE is pres. SP & as is RENT & PROFITS thereof. 5) W&H’s interests depend on the Pr’s char. as SP or CP, which dep. on 3 FACTORS: 1) SOURCE of FUNDS USED to acq., 2) ACTIONS of parties that may’ve altered its c., 3) any STAT.PRES. MERELY changing the FORM of Pr doesNOT change its char.

Question 3

*QCP is:

Answer 3

Pr Acquired in a non-CP State that would have been CP if: At the TIME of ACQUISITION, the Couple had been DOMICILED in California.

Question 4

*QCP is treated how during Marriage +CA ?

Answer 4

SP, EXCEPT for purposes of CREDITORS’ rights, (when it’s always treated as CP).

Question 5

*QCP, at death & divorce, is Distributed: +CA

Answer 5

the same as CP and divided 50/50.

CA: ONLY EXCEPTION: a NON-ACQUIRING spouse who DIES FIRST: has no TESTAMENTARY Power to WILL away 1/2 of the QCP.

Question 6

A PUTATIVE spouse is … & Rights +CA:

Answer 6

An INNOCENT S w/ a GF BELIEF that M was Lawful. At DISSOLUTION & DEATH:
a PUTATIVE S has CP Rights.
CA: No GF Belief: [in legality of CL M in Calif., even if ooS CL M are Recognized]

Question 7

Pr acquired during a PUTATIVE M is called:

Answer 7

Quasi-Marital Pr.

Question 8

CA: Tip: Once a Putative spouse learns her M is invalid: +b/c

Answer 8

she No longer ACCRUES a QM Pr interest because there’s no longer a GF (obj. reas.) BELIEF.

Question 9

Split: whether a GUILTY Spouse, who knows M is INvalid:

Answer 9

is entitled to QMP

vs. Only K. Principles apply.

Question 10

*Characterization of assets as CP/QCP/QMP or SP depends on 3 factors:

Answer 10

The 1) SOURCE of asset, 2) ACTIONS of the parties that may have Altered its character, and 3) Statutory PRESUMPTIONS.

Question 11

Personal INJURY Recovery Awards: +CAx3

=Exception to the 50/50 rule.

Answer 11

are CP, if the ACCIDENT occurred during M.
CA: PI DMG are awarded ENTIRELY to the INJURED spouse if:
1) Pre-/Post-M
2) Tortfeasor was the other S
3) at DIVORCE, unless
a) JUSTICE requires otherwise (=econ. circ.) or
b) COMMINGLED Award.

Question 12

At Divorce, RETIREMENT BENefits /PENSIONS whether VESTED or not … +Calculate:

Answer 12

are CLASSIFIED as: DEFERRED COMP. EARNED during M =CP.
BUT Ct uses TIME Rule to calc. CP’s Pro-RATA share by: (#Years S worked DURING M) ÷ (TOTAL #Years worked THROUGH Retirement).

Question 13

If PENSION Benefits NOT PAYABLE [Matured] at DIVORCE,

Court may either …:

Answer 13

1) Award CP ASSETS of EQUAL VALUE to the NON-EMPLOYEE Spouse =CASH-OUT, Or
2) RETAIN jx. until the Pension KICKS in.

Question 14

DISABILITY Pay /Worker’s COMPENSATION /SEVERANCE Pay is treated as …:

Answer 14

WAGE REPLACEMENT and Classified dep. on the WAGES it is DESIGNED to REPLACE:
a) If RECEIVED during M:
it’s designed to replace marital Earnings =>it’s CP
b) If RECEIVED Pre /PostM:
it’s designed to replace SP earnings =>SP.

Question 15

If a Divorced S chooses (SP) DISABILITY Pay INSTEAD of a (CP) PENSION:

Answer 15

to DEFEAT a CP CLAIM, the Disability Pay is TREATED like CP.

Question 16

*Stock OPTIONS … +what if EXERCISED AFTER the DOS?

Answer 16

if awarded During M=COMPENSATION =CP. BUT:
If exercised after DOS:
TIME Rule applies, i.e., CP’s Pro-RATA share: (Date awarded through DOS) ÷ (Date awarded through Vesting).

Question 17

*Biz /Professional GOODWILL … +How Calculate:

Answer 17

GOODWILL is CP if: Earned DURING M.
[Definition: BizValue_total - Assets_total.]
Value is Calculated: by Expert W.

Question 18

*Life insurance Proceeds: TERM life: +Who owns what at DIVORCE vs. DEATH?

Answer 18

At DIVORCE:
No cash-Value (b/c Not matured =No Proceeds).
At DEATH:
FINAL PREMIUM determines OWNERSHIP of Proceeds.

Question 19

*WHOLE life insurance….

+What If paid w/ CP+SP?: …

Answer 19

1) Cash Value that exists at DIVORCE is CP.
DEATH: 3PB only TAKES Decedent’s ½ CP share.
2) If paid w/ CP+SP: Subject to Apportionment.
CP’s Pro-RATA share:
(#PREMIUMS PAID w/ CP) ÷ (#TOTAL Premiums).

Question 20

*Insurance PROCEEDS:

Answer 20

are PRESUMED CP if: CP funds were used.

Question 21

EDUCATION & Training … +CA:

Answer 21

Degree/Training isNOT Divisible Pr. CA: At Divorce, educated S must REIMBURSE the CP for edu.’l EXPENSES w/ INTEREST, if: Earning CAPACITY of educated S is SUBST. ENHANCED. CCA: REDUCED Reimb. if: a) Community already Subst. BENEFITED from the edu. =Presumed if 10+Yrs b) OFFSET by other S’s CP-funded edu. Or c) edu. reduced that S’s spousal SUPPORT needs.