Community Property

Question 1

What are the seven topics covered in Community Property?

Answer 1

1. Community property: (i) CM, SP, Quasi, permanent separation, (ii) marital status (valid, invalid, RDP, punitive), & (iii) framework
2. Presumptions: CP, SP and rebutting presumptions (+ burden of proof): (i) the source rule; (ii) commingled assets; (iii) rents, issues & profits thereof and (iv) presumptions inferred from title;
3. Source and Title: Married Women’s Special Presumption (1975) and title taken “In Joint & Equal Form”: (i) CP/as H&W; (ii) JT; (iii) CP with ROS; (iv) tenancy in common. Agreement to overcome J&E presumption.
4. Difficult to Classify: (i) business; (ii) wage replacement benefits; (iii) stock options; (iv) goodwill of PP; (v) educational expenses; (vi) personal injury award; (vii) life insurance; & (viii) property acquired on credit.
5. Actions: (i) by agreement & (ii) by conduct
6. Management and Control: (i) equal rights to M&C; (ii) conveyence; (iii) CP gifts; (iv) FD; (v) liability for debts; (vi) transfer or encumber
7. Divorce and Death

Question 2

What is the rule of division upon divorce?

Answer 2

At divorce, absent contrary agreement, or unless statute or policy otherwise require, all CP (and QCP) is subject to equal division in kind. Each spouse retains their SP at divorce.

Question 3

How should you begin an answer to a CP question?

Answer 3

CA is a CP state.

Except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by either spouse during a marriage is CP.

Property owned before a marriage or brought in by gift, bequest (inheritance), devise (will) or descent (through intestacy) is presumed SP.

With these principles in mind, each property will be assessed individually.

Question 4

What is the presumption when a creditor is involved?

Answer 4

In respect of creditor’s rights, the community credit presumption is that all funds borrowed during a marriage and goods purchased are community property. A creditor can reach CP + the debtor’s SP, but not the non-debtor’s SP. QCP treated the same.

To rebut presumption must prove that lender relied on separate property

Question 5

What is the presumption when a creditor is involved?

Answer 5

In respect of creditor’s rights, the community credit presumption is that all funds borrowed during a marriage and goods purchased are community property. A creditor can reach CP + the debtor’s SP, but not the non-debtor’s SP. QCP treated the same.

To rebut presumption must prove that lender relied on SP (primarily - original view - solely - more recent view).