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CA Bar Exam Essay Rules > Community Property > Flashcards

Community Property Flashcards

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1
Q

Permanent Separation?

A
  1. Intent to end marriage communicated; and
  2. Conduct consistent with that intent
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2
Q

Putative Spouse Treated as Married?

A
  1. Good faith belief; and
  2. Void/voidable marriage

Estoppel may apply against party who knew or once discovered.

Property is classified as Quasi-Marital Property (QMP)

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3
Q

Premarital Agreements Valid If:

A
  1. Does not promote divorce;
  2. In writing and signed by both;
  3. Voluntary (deemed involuntary unless independent counsel or waived in writing, seven days to review, terms/rights in writing, no duress, fraud, undue influence);
  4. Not unconscionable at execution;
  5. Disclosure of other party’s wealth (or written waiver);
  6. Cannot waive child support or spousal support (unless with indpendent counsel).
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4
Q

California Marriage Presumptions?

A
  1. Community Property = property acquired during marriage by a spouse’s labor
  2. Separate Property = property aquired before marriage, after permanent separation/divorce, or by devise, inheritance, or gift
  3. Quasi-Community Property = property acquired elsewhere but would be CP if acquired in California
  4. Quasi-Marital Property = property acquired by putative spouses
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5
Q

Community Property - Presumptions Inferred by Title?

A
  1. Source of funds SP but title is CP = presumed gift to community.
  2. Source of funds CP but title is SP = remains CP unless written transumation
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6
Q

Community Property - Jointly Titled Property - Lucas

A

At death, all jointly titled property is presumed CP. No right to reimbursement for SP contributions.

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7
Q

Jointly Titled Property - Anti-Lucas

A

At permanent separation/divorce, all jointly titled property presumed CP unless agreement otherwise. Right to SP reimbursement for: (1) down payments; (2) improvements; and/or (3) principal.

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8
Q

Married Woman’s Special Presumption (MWSP)?

A

Woman’s name alone prior to 1975 is her SP.

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9
Q

Initial Characterization of Property?

A
  1. If CP funds used during marriage = CP
  2. If acquired before or after marriage or SP funds used during marriage = SP
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10
Q

Two Methods for Tracing Commingled Funds?

A
  1. Exhaustion Method: All CP funds exhausted by community expenses when purchased.
  2. Direct Tracing: Sufficient SP funds at time of purchase and intent to use SP.

Cannot overcome joint title presumption except for joint bank accounts. Burden on proponent of SP.

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11
Q

Three Transmutation Requirements?

A
  1. In writing;
  2. Describe change in ownership; and
  3. Consent of adversely affected spouse.

Exception for gifts of insubstantial nature. Pre-1985, oral and inferred conduct sufficient.

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12
Q

Spouse’s Two Fiduciary Duties?

A
  1. Full disclosure of material facts regarding community assets/debts
  2. Good faith and fair dealing (cannot take advantage of each other)
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13
Q

Management/Control of Community Personal Property?

A
  • Equal power
  • One cannot gift or dispose for less than fair market value
  • One cannot sell or convey family furnishings without written consent
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14
Q

Management/Control of Community Business?

A

Managing spouse can make all decisions but must give written notice to sell.

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15
Q

Management/Control of Community Real Property?

A
  • Both need to sign to sell or lease for more than one year.
  • Cannot convey to third party without other’s consent.

Presumed Bona Fide Purchaser in case of conveyance and other spouse may void up to one year. If not BFP, voidable at any time.

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16
Q

Two Approaches to CP Contributions to SP Business?

A
  1. Pereira: Use if spouse’s skill is reason for growth.
    SP = Initial SP + RRR (10% of SP per year of marriage)
    CP = Value of Business - SP
  2. Van Camp: Use if character of business reason for growth.
    CP = FMV Salary - family expenses - salary taken
    SP = Value of Business - CP
17
Q

CP Contribution to Other Spouse’s SP?

A

Presumed gift in some jurisdictions.

18
Q

CP Contribution to Spouse’s Own SP?

A

CP reimbursed greater of (1) amount spent on improvement or (2) increase in value.

19
Q

CP Contribution to SP Real Property?

A
  • CP % = amount CP contributed to principal/total loan amount
  • Then, multiple CP % by appreciation = CP
  • Payments for interest, tax, and insurance excluded.
20
Q

SP Contributions to Other Spouse’s SP?

A

Reimbursement without interest for down payments, improvements, and/or loan principle.

21
Q

SP Contributions to CP Property or Business?

A

Reimbursement without interest for down payments, improvements, and/or loan principle. For business, review Pereiran and Van Camp.

22
Q

Characterization of Personal Injury Award?

A

During Marriage: CP, including at death, but if divorce, SP to injured spouse.
After Permanent Separation: SP

Can get reimbursement for CP or SP funds used on behalf of injured spouse from SP injury funds.

23
Q

Characterization of Pensions?

A

Earned during marriage = CP, regardless of when fully vests.
CP = (Total Pension x Years Married) / Total Years Pension Earned

Court may “reserve jurisdiction” until spouse retires or use “cash out” method. Cash out gives pension to employed spouse and gives other CP of equal value to non-employed.

24
Q

Characterization of Stock Options?

A
  • Vests during marriage = CP
  • If for past services, use Time Rule. CP = (Total Stock x Years Married) / Total Years Stock Earned
  • If for future services = SP
25
Q

Characterization of Disabiltity/Worker’s Comp?

A

SP or CP depending on what earnings it is replacing.

26
Q

Characterization of Severance Pay?

A

CP = Replaces retirement benefits earned while married.
SP = Replaces future post-divorce earnings.

27
Q

Characterization of Bonus?

A

CP = Earned during marriage.
SP = Earned after marriage.

Does not matter when paid.

28
Q

Characterization of Education/Training?

A

Not CP but CP reimbursement if: (1) CP paid for education and (2) earning capacity substantially enhanced.

Defenses to Reimbursement:
* Community substantially benefited (presumed if more than ten years)
* Other spouse received education
* Reduced need for spousal support in educated spouse

29
Q

Characterization of Life Insurance?

A
  • Whole Life: each estate (SP and CP) gets % cash value = % premiums paid (% = amount paid / total amount)
  • Term: SP or CP based on last payment of premiums.
  • Remember, if CP, then can only devise 1/2 to non-spouse beneficiary
30
Q

Characterization of Business Goodwill?

A

To the extent goodwill is earned during marriage, that is CP. Hard to account for.

Excess Earnings Method = professional’s annual net (deduct fair return) earnings - similar professional earnings. Capitalize excess earnings over marriage.

31
Q

Federal Preemption of CP and SP?

A

Remeber federal law may preempt state law if asset is federal asset, i.e., military pension.

32
Q

Community Property - Characterization of Debts/Liabilities?

A
  • During Marriage = CP debt
  • Intent of Lender may rebut by showing lender relied on SP
  • Determined at time of contract, tort, etc.
33
Q

Creditor’s Rights to CP and SP?

A

Creditor has same management/control rights as indebted spouse; full access to CP for all debts before and during.
Exception for earnings during marriage of non-debtor placed in separate account.

34
Q

Community Property - Order of Debt Satisfaction?

A
  1. Community Interest: CP first, then SP.
  2. Separate Interest: SP of debtor, then CP.
  3. SP Debt before Marriage: All CP and debtor’s SP; exception for non-debtor earnings in separate account.
  4. SP Debt during Marriage: All CP and debtor’s SP (no access to non-debtor SP except for necessities of life debts)
  5. Injury caused by Spouse: SP unless conduct for benefit of community, then CP.
35
Q

Division of Property at Divorce?

A
  • CP and QCP split equally
  • Each keeps SP
  • CA court can divide out-of-state real property but be aware of jurisdictional issues in execution
36
Q

Division of Property at Death?

A
  • Half of CP/QCP to surviving spouse and half to estate.
  • Will: Can devise all of SP and only half of CP/QCP; no interest in QCP titled in survivor’s name.
  • No Will: All CP to surviving spouse; SP will be divided either all to spouse, 1/2 to spouse, or 1/3 to spouse depedning on # of living children.
  • Out-of-state real property will probate in jurisdiction.

CA Bar Exam Essay Rules (16 decks)

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