Community Property

Question 1

Transmutation

Answer 1

An instrument that changes the characterization of property from Separate Property to Community Property, or vice versa.
Must be:
1) In writing;
2) Signed by both spouses;
3) Expressly declares a change in ownership.

(remember the gift exception)

Question 2

Gift Exception

Answer 2

CP can be transmuted into SP by gift from one spouse to another if the gift is:
1) tangible property of a personal nature;
2) used solely by the recipient spouse;
AND
3) insubstantial in value in context of the lifestyle of the parties.

Question 3

End of Economic Community

Answer 3

The Economic Community ends when:
a) either spouse dies;
OR
b) there is permanent physical separation - living apart and no intention to continue

Question 4

Lucas/Anti-Lucas

Answer 4

Under Anti-Lucas, any Jointly Titled property acquired by a married couple is presumptively CP at divorce, but Separate Property used for purchase of the property is reimbursed at fair market value

Question 5

Pereira

Answer 5

Under the Pereira method, when business growth is mostly due to the spouse’s labor and abilities.
Owning spouse will receive the original principal value of the business, PLUS an annual rate of return calculated at 10%.
The remaining value of the business is CP.

Question 6

Van Camp

Answer 6

Courts apply the Van Camp method when business growth is mostly due to the character and nature of the business itself.
Community will receive a reasonable salary for community labor, REDUCED by community expenses.
Remaining Value of the business is the Separate Property of the owning spouse.

Question 7

Transfers to Third parties

Answer 7

Transfers to third parties require written consent. Where one spouse gifts without consent, the other spouse may void the gift during the donor’s lifetime, or may void half the gift after the death of the donor.

Question 8

Debt Satisfaction to Creditors

Answer 8

Generally creditors may reach CP to satisfy debts incurred before or during the marriage. But, a non-debtor spouse’s earnings are protected if
1) the debt occurred before the marriage;
AND
2) the earnings were held in a separate account to which the debtor did not have access and no commingling occurred.

Question 9

Tort Settlements & Judgments

Answer 9

If the debtor was acting to benefit the community when the tort occurred, then CP must be used before reaching SP.
If debtor was not acting to benefit the community, then SP must be used before reaching CP.