Community Property Flashcards
General rule presumptions/ MAIN RULE PARA FOR ALL CP QUESTIONS
CA is a CP state. All property acquired during the course of marriage is presumed CP. All property acquired before marriage or after separation is presumed SP. In addition, property acquired by gift, devise, or bequest is presumed SP (rents/issues/ profits derived from SP and profits acquired w/ SP funds also presumptively SP). CA recognizes domestic partnerships.
To determine the character of an asset, court will trace back to the source of funds used to acquire asset. At divorce, the community assets are equally divided in kind, unless some special rule requires deviation from the equal division, or the spouses agree otherwise in writing or by oral stipulation in open court.
Quasi CP is property acquired by either spouse that would have been CP, had the spouse been domiciled in CA at the time of acquisition.
What happens at death of spouse
At death, the decedent can devise all of his SP and half of the CP.
if decedent dies intestate, the surviving spouse is automatically entitled to the decedent’s share of the CP, and 1/3 share to a full share of decedents SP, depending on whether decedent left issue or surviving parents
Marital economic community*
begins at date of marriage (registration for domestic partners) and ends at permanent dissolution, separation, or death of one spouse. After this date, the earnings and accumulation of each party is treated as SP.
Separation: when there is a complete and final break in the relationship where one spouse has communicated to the other his intent to end the marriage, AND the spouse’s conduct is consistent with that intent.
Valid marriage (and putative spouse/ unmarried cohabitant rules)
Where there is consensual civil contract b/w 2 people followed by the performance of certain legal procedures. CA recognizes marriages from other jurisdictions.
PUTATIVE SPOUSE: when the couple is not legally married bc marriage is void/voidable, but one or both parties believe in good faith they are legally married. (void for bigamy/ incest, voidable at election of spouse for fraud, coercion, sexual incapacity, lack of consent). One may be estopped from asserting putative spouse status if [arty knew that the marriage was invalid (jx split on how to treat bad faith spouse). Quasi-martial property is the property acquired by a putative spouse.
UNMARRIED COHABITANTS: CA does not apply CP to persons who never evidenced an intent to enter into lawful marriage, even if they live together, marry, and later divorce- only property acquired during marriage is CP. Instead, courts apply general contract principles (constructive trusts, quasi K). Where a cohabitant agrees to QUIT their job and take care of household while other works/ school, cohabitant can argue there was an IMPLIED agreement the household duties was in exchange for use of other’s income, ESPECIALLY if reliance and they have joint title/ bank accounts.
Premarital agreement
Made before marriage to become effective upon marriage in which parties agree to characterization of the property and may limit support obligations (cannot waive child support, but can waive spousal if ind. counsel rep at time agreement was signed)
Requirements: writing, voluntary, not unconscionable
(1) writing/ signature of both (2) cannot create a positive incentive for divorce (3) deemed involuntary unless the party against whom enforcement was sought was: rep by ind. counsel or advised to and waived; OR presented with agreement and advised to seek counsel at least 7 days b4 signing; OR if unrepresented, is fully informed in writing of terms and rights party is giving up in language in which he is proficient and declares in writing that he received it; AND not under duress, fraud, undue influence, lack of capacity; (4) not unconscionable (at time of execution and party did not have adequate knowledge of the wealth of other and did not waive right to disclosure of wealth in writing and could not reasonably have obtained info on their own)
Source of funds is SP, but title is CP
when title is taken jointly but funded by SP, it is PRESUMED to be a GIFT to the community, UNLESS there is a contrary written intent, subject to reimbursement at divorce (Anti-Lucas).
Source of funds CP, but title is SP (taken by one spouse only)
will retain characterization as CP, UNLESS written transmutation
Exception: where spouse intends to give other spouse a gift and title is taken in a way to evidence that gift, the property will be SP of the gifted spouse and there is no writing requirement.
JOINTLY titled property, with SP contribution (Lucas/ Anti-Lucas)
Rules differ depending on whether marriage ends in death or divorce. **these rules do not apply when creditor seeking payment and there is no death or divorce **
Lucas: at death, all jointly titled property of either spouse is presumed CP at the death, unless express agreement to the contrary. There is NO right to reimbursement for SP contributions, so gift from SP to the CP presumed.
Anti-Lucas: at divorce/ legal separation, all jointly titled property of the spouses is presumed CP, unless express agreement to contrary. There IS a right to reimbursement; only allowed for (1) down payments (2) improvements and (3) payments that reduce principal of a loan.
Commingled Funds/ Tracing/ Family expenses presumption
does not necessarily transform property from SP to CP, if the spouse can trace the source of funds used to acquire property as SP funds. Thus, propertyy will be characterized as the source of funds dictates.
BOP on spouse claiming SP.
Family Expenses presumption: when tracing, there is a presumption that expenditures for family expenses were made with CP funds, even if SP funds were available (in the commingled account)
2 Tracing Methods for commingled accounts
Exhaustion method: show that at the time property purchased, all CP funds in commingled account had been exhausted by CP expenses, and thus only sp funds were available to buy property)
Direct tracing method: direct link from SP funds to purchase, such that sufficient sp funds were available in the account at the time of purchase and SP owner intended to use SP to make purchase.
if it is impossible to trace, property will be considered CP
Joint title of property vs jointly held bank accounts
Joint title trumps tracing for real and personal property, but tracing is always allowed for jointly held bank accounts.
Tracing cannot be used to overcome presumption where title to property was taken jointly, except that it can be used to overcome presumption for jointly titled bank accounts since they are governed by probate code.
Transmutation *
agreement b/w spouses made DURING marriage to alter ownership characterization
To be valid, a transformation of real or personal PROPERTY requires a writing, clearly describing the change in ownership and consent of the adversely affected spouse.
Exception: gifts b/w spouses of insubstantial value (where spouse intends to give personal gift of insub. value, will be SP of the gifted spouse and no writing req’d).
Other than this exception, no EE allowed to prove transmutation (statement in will not admissible to prove!)
(Before 1985, no writing required).
Fiduciary duties of spouses
In transactions b/w themselves, spouses are subject to fiduciary rules that govern confidential relationships. (Feels Good to BURP- Full disclosure, Good faith, Burden on advantaged (to rebut the) Undue influence Rebuttable Presumption)
** discuss when: sells real property w/o consent, lies/ fails to disclose info, anytime spouse is acting alone **
(1) Full Disclosure: all material facts about community assets and debts, and to provide equal access to all info upon request
(2) Good Faith and Fair dealing: never take advantage of other
(3) Undue influence rebuttal presumption: when one spouse gains an advantage over the other in transaction
(4) Burden on advantaged spouse: must prove the disadvantaged party freely and voluntarily consummated the transaction, w/ full knowledge and understanding of effect
Management and control of personal property *
m/c of comm personal property belongs to either spouse with absolute power of disposition as they have with their SP (other than testamentary)
Exceptions/ limitations:
- cannot make a gift or dispose of community personal property for LESS than fair and reas. value w/o written consent of other spouse.
- Testamentary- only dispose of 1/2 of their CP through will/trust, since other spouse owns other 1/2 (but can dispose of all SP).
- cannot sell, convey, or encumber CP personal property use in fam dwelling, furnishings, clothing, w/o written consent of other spouse
Management/ control of Business CP
Spouse who is in charge of managing and controlling comm business can make all business decisions alone, but must prove other with written notice of SALE or disposition of ALL or substantially all the personal property used in the buss. operation.
