Community Property

Question 1

Is California a Community Property State?

Answer 1

Yes, California is a community property state.
The marriage is viewed as a community and each spouse is equal in that community.

Question 2

Characterization of property owned before marriage

Answer 2

Separate Property is the categorization of property owned separately before a marriage.

Question 3

Factors when determining characterization of property?

Answer 3

How the asset was acquired.
When the asset was acquired
Action / Agreement to change characterization
Legal presumptions

Question 4

Community Property is governed by CFC unless

Answer 4

The CFC or California Family Code governs property except when there is a premarital or marital agreement.

Question 5

Define Property

Answer 5

Property means an interest, present or future, legal or equitable, vested or contingent, in real or personal property, including income and earnings.
Ex: IRA, Cars, Bank accounts.

Question 6

Define Separate Property

Answer 6

FC Sec 770 - Separate property of a married person includes all of the following:
All property owned by the person before marriage.
All property acquired by the person after marriage by gift, bequest, devise, or descent.
The rents, issues, and profits of SP are SP.

Question 7

When is the Date of Separation?

Answer 7

The date that a complete and final break in the marital relationship occurred.
Must have expressed to the other spouse and intent to end marriage.
AND
The conduct of the spouses is consistent with the intent to end the marriage.

Question 8

Define Community Property

Answer 8

Except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person, during the marriage while domiciled in this state is community property.

Question 9

What does a spouse need to do to prove/challenge property

Answer 9

A spouse challenging the CP presumption has the burden of proof to establish separate character.
Preponderance of the evidence.

Question 10

Define Quasi-Community Property

Answer 10

Applies to all real or personal property no matter where it is located.
Property acquired in a non-community property state that would have been community property if acquired in California. OR
Property acquired in exchange for property that would have been community property if acquired in California.

Question 11

What is tracing used for?

Answer 11

Tracing is used to characterize the community and separate property portions of the parties accounts.

Question 12

Common law marriages

Answer 12

California has abolished CL marriages.
California will recognize a foreign CL marriage.

Question 13

Putative Spouse

Answer 13

When a marriage is void or voidable but the court finds that either party or both parties believed in good faith that the marriage was valid, the court will declare the relationship that of putative spouses.

Question 14

Quasi-Marital Property

Answer 14

Any property acquired that would have been community or quasi-community property if the marriage had not been void or voidable.

Question 15

Marriage by Estoppel

Answer 15

A marriage by estoppel allows for the CP protections to attach to an otherwise invalid marriage if one party induces the other party into marriage, knowing that the marriage is invalid, by making promises that are subsequently not kept.

Question 16

Cohabitation

Answer 16

Unmarried cohabitants ordinarily have no CP rights absent some enforceable agreement. All property is presumed to the be SP of each and the manner in which title is held presumptively controls.

Question 17

Marvin Actions

Answer 17

Marvin v Marvin, the court held that parties can contract with each other to create a support obligation or other ownership relationship.

Question 18

Domestic Partnership

Answer 18

Two adults in a committed, intimate relationship of mutual caring.
Same rights as same sex marriages.

Question 19

Four ways spouses can hold property in joint forms

Answer 19

Joint tenancy
Tenants in common
Community property
CP with right of survivorship

Question 20

Joint tenancy

Answer 20

Common form of ownership among married couples in Cali because of survivorship feature.
If one holder dies, the other title holder takes the whole property without having to go through probate.

Question 21

Defeating the Presumption for property

Answer 21

A clear statement in the deed or other documentary evidence of title that the property is SP and not CP;
OR
Proof that the parties have made a written agreement that the property is SP.

Question 22

Lucas doctrine pre-1984

Answer 22

Pre-1984 ears transmutation allowed property to be transmitted by oral agreement.
Absent any agreement to the contrary, presumed CP but could be overcome by an oral argument.

Question 23

Right to Reimbursement

Answer 23

FC 2640 provides that at divorce, a party shall be reimbursed for his or her SP contributions to acquisition of CP to the extent he or she can trace the contribution to SP sources.
w/out interest

Question 24

CP contributions

Answer 24

DIP
Down payments
Improvements
Principal payments on mortgage.

Question 25

The Married Woman’s Special Presumption

Answer 25

Only applies to SP presumption.
If property acquired prior to 1975 by a married woman in a written instrument = presumption is her SP.

Question 26

2 Tracing Methods

Answer 26

Exhaustion method
Direct Tracing Method

Question 27

Family expense tracing

Answer 27

a spouse shows that at the time of purchase, all CP funds had been exhausted to cover CP living expenses. = therefor SP funds had to be used.

Question 28

Direct tracing method

Answer 28

The SP proponent attempts to identify with sufficiently accurate records the timing and amount of SP withdrawals from the commingled funds and tie it to the property acquisition in question.

Question 29

Mutation

Answer 29

a change in the form of property without changing its character as SP or CP.

Question 30

Bank account characterization

Answer 30

Joint bank accounts are presumed to be CP.
Can be overcome by tracing.

Question 31

Business owned by 1 spouse.

Answer 31

Can be owned by 1 spouse if SP before marriage.
started during marriage with SP funds.

Question 32

Business owned by 1 spouse Profits

Answer 32

Time, effort and labor contributions are CP.
Profits produced by those efforts are CP.
Pereira formula
Van Camp accounting approach.

Question 33

Pereira v Pereira

Answer 33

Method used when Labor is main value add.
Reasonable rate of ROI method: reimburses the SP estate for return on the separate capital invested in business and treats remaining profits as CP
(SP investment) x (legal interest rate) x (years of business during marriage) = SP share.

Question 34

Van Camp v. Van Camp

Answer 34

Increase in value due to market forces and nature of capital $$
Gives community a reasonable salary for the labors of the owner-spouse but awards the balance of the profit from the growth of the business to the SP of the owner-spouse.

Question 35

Artistic Biz & Pro Interests

Answer 35

Any artistic work created by a spouse during the marriage, and any copyright obtained on such work, is CP.

Question 36

Biz and Pro good will

Answer 36

intangible asset relating to reputation.
Market sales valuation or
Capitalization of past excess earnings.

Question 37

Ed Degree & Pro licenses

Answer 37

The value of education and and degree = SP.
Reimbursement: Community. will be reimbursed for community contributions made that “substantially enhances the earning capacity” of party.

Question 38

10-year presumption

Answer 38

presumed that the community has substantially benefited from education after 10 years.
Professional degrees are not presumed to result in substantially higher earning power.

Question 39

Disability Pensions

Answer 39

Designed to replace lost or reduced earning capacity = CP
Military/VA is preempted by Fed Law and only SP
Settlements/lump sum = CP while married.

Question 40

Severance Pay

Answer 40

No clear rule. If pay is for work performed while married = CP. If pay is for future benefits they would receive post marriage = SP.