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Cal Bar > Community Property > Flashcards

Community Property Flashcards

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1
Q

Opening Presumption - Classify Relationship

A

California is a community property state. Property acquired during the marriage is presumed community property. All property acquired before marriage or during permanent separation is separate property. In addition, gifts, devise, or bequests during the marriage are separate property. When couples who are not domiciled in California acquire property in a non-community property state and then later relocate to California, such Property is treated as quasi-community property if it would have been CP had the couple been domiciled in CA at the time of the acquisition.

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2
Q

Valid California Marriage

A

CA community property law applies when the parties

  1. Have a legal marriage, and
  2. Are domiciled in CA.
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3
Q

Out of State Marriage

A

The state of CA recognizes marriages that are validly made in other states or foreign jurisdictions, as long as the marriage would be recognized in that jx.

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4
Q

Putative Marriage

A

A putative marriage is an apparently valid marriage, entered into good faith on the part of at least one of the partners, but that is legally invalid due to a technical impediment, such a preexistent marriage on the part of one of the partners.

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5
Q

Meretricious Marriage

A

Property is governed solely by the agreement of the unmarried parties. Here, two persons are not holding themselves out as a married couple, but their cohabitation is more than a roommate agreement.

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6
Q

Separate Property - Classify Individual Property

A

Any property acquired before marriage or acquired during marriage by gift or inheritance is separate property. Separate property is confirmed to the owner at divorce.

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7
Q

Community Property

A

Begins at marriage and ends 1. upon divorce 2. either spouse dies, or 3. permanent physical separation with no intent to continue the marriage.

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8
Q

Quasi-Community Property

A

Is the property that was acquired in another state that would be considered community property if it were acquired in CA.

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9
Q

Quasi-Marital Property

A

Refers to property and assets acquired by a void or voidable marriage in which one or more of the parties had a good faith belief that the marriage was legitimate.

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10
Q

Quasi-Marital Property

A

Refers to property and assets acquired by a void or voidable marriage in which one or more of the parties had a good faith belief that the marriage was legitimate.

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11
Q

Pensions

A

If a pension is earned during the marriage, then it is CP. Can be paid as received or cashed out is computed by taking the number of years required to vest, and proportionally diving the net into CP. As such, if it takes 20 years to vest, and marriage was for 10 years during the vesting period, the community property is 50%. Since community property is 50/50, the other spouse gets 25%.

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12
Q

Personal Injury Awards

A

If the cause of action arose during the marriage, personal injury awards and settlements are CP. At divorce, they are assigned entirely to the injured spouse, unless. 1. Funds were commingled; b. or there is economic hardship to the other spouse. If the other spouse is the tortfeasor, the award is the separate property of the injured spouse.

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13
Q

Education

A

Professional degrees acquired during the marriage are the SP of the acquiring spouse. However, reimbursement is due 1. CP funds are used to pay tuition, and 2. The education enhanced the spouse’s earning capacity. A spouse does not need to reimburse if 1. the community substantially benefited from the education 10-year rule 2. the other spouse received community-funded education; or 3. The education lessens the need for spousal support.

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14
Q

Community Property with Right of Survivorship

A

Under a community property system such as in CA, when the first spouse dies, the entire property automatically transfers to the survivor. The property does not need to go through the probate process in order to be transferred to the survivor.

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15
Q

Conduct of Parties: SIP That Good Cognac

Separation

A
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16
Q

Conduct of Parties: SIP That Good Cognac

Separation

A
17
Q

Improvements

A

The CP is entitled to a pro-rata percentage of the increase. For example, loan 10%, then take 10% of the increase and add it to the CP.

18
Q

Pereira/Van Camp Application

A

Pereira Method - courts apply the Pereira method when business growth is mostly due to the spouse’s labor and abilities. Here, the owning spouse receives the original principal value (OPV) of the business, plus the annual rate of return calculated at 10%OPV, and the remaining value of the business is CP. (Restaurant purchased for $100 (OPV) x 10% for Six years = $160 - that SP, the rest goes to CP).

19
Q

Van Camp Method

A

The business growth is mostly due to the character and nature of the business itself. Here, the community receives a reasonable salary in return for the community labor, reduced by any community expenses, and the remaining value of the business is the SP of the owning spouse. Formula (Value of Services Avg Salary - CP Expenses) x Number years Married = CP)

20
Q

Transmutation Doctrine

A

An agreement between spouses during marriage to change the character of an asset. No consideration is required, but this change must be in writing, signed and consented to by the spouse adversely affected, and expressly declare a change in ownership. Exceptions - gifts between spouses, tangible personal articles, or gifts not of substantial value. Before 1985, these changes could be oral, written, or inferred. Afterward, they must be written.

21
Q

Gifts

A

Gifts of substantial value between spouses must be accompanied by writing, memorializing the gift from one spouse to the other. Without this writing, the presumption will be that it remains the gifting person’s SP. This presumption may be rebutted.

22
Q

Commingling Funds

A

Are separate funds mixed in with community property funds. Direct tracing will be required to separate, separate and community funds.

23
Q

III. Classify Individual Property

A. Creditors

A

a creditor cannot reach the CP of the other spouse after divorce unless
1. That spouse incurred the debt; or 2. the debt was assigned to that spouse by the court B. Third Party Transfers (crossover with Real Property/Remedies)

24
Q

Management and Control

A

each spouse has equal rights to manage and control CP.

25
Q

Child Support

A

CP should not be used to make child support payments, when CP is used and SP was available, the community is entitled to reimbursement.

26
Q

Main Checklist to Community Property

A

I. Classify Relationship
II. Classify Individual Property
III. Classify Individual Property
IV. Distribution of Property

27
Q

II. Classify Individual Property

A. Source of Item Used to Acquired Property

A
  1. Type:
    a. Separate
    b. Community
    c. Quasi-Community
    d. Quasi-Marital
    e. Community Property with Right of Survivorship
28
Q

B. Conduct of Parties: SIP That Good Cognac

A
  1. Separation
  2. Improvements
  3. Pereira/Van Camp Application
  4. Transmutation Doctrine
  5. Gifts
  6. Commingling Funds
29
Q

III. Classify Individual Property

A 
A. Creditors 
B. Third Party Transfers (Crossover w/ Real Property/Remedies)
C. Spouse's
1. Management and Control 
D. Survivors (Crossover with Wills)
30
Q

IV. Distribution of Property

A

A. Divorce

B. Death

31
Q

Conduct

A
  1. Separation
  2. Improvements
  3. Pereira/Van Camp
  4. Transmutation
  5. Gifts
  6. Commingled Accounts
    SIP That Good Cognac
32
Q

Potential Rights - Creditors

A
  1. What Type of Property is Involved?
  2. Who Incurred the Debt?
  3. When was Debt Incurred?
    A. A contract debt is incurred at the time the contract is made
    B. A Tort Debt is Incurred at the time the tort occurs
    C. A Spouse’s Child Support and Spousal Support Obligations From Prior Relationships are Treated as Debts Incurred Before Marriage
    D. In all other cases, a debt is incurred at the time the obligation arises.

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