Community Property

Question 1

Community Property Rule for CA

Answer 1

CA is a CP state. CP is defined as “all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in the state.”

Question 2

Separate Property

Answer 2

Property acquired before marriage or during marriage by gift, bequest, devise, or descent.

Question 3

Onerous Acquisition

Answer 3

CP is onerously acquired through one or both spouses’ work, labor, talent, industry, or other effort. Spouses share an equal one-half interest in CP, no matter their actual contribution to acquisition.

Question 4

General CP Presumption

Answer 4

Proof of acquisition of property during marriage gives rise to the general CP presumption.

Question 5

Joint Title Presumption

Answer 5

(JT situation) - For the purpose of division of property on dissolution of marriage or legal separation, property held in joint tenancy is presumed to be CP.

Question 5

3 Principles of CA CP Law

Answer 5

(1) Equality, (2) Tracing, (3) Contractual Modification

Question 6

Equality

Answer 6

Spouses share an equal one-half interest in CP, no matter their actual contribution to acquisition. In a CP system, a stay-at-home spouse’s contribution is conclusively presumed.

Question 7

Tracing

Answer 7

Purchases take on the character of purchase funds, and other acquisitions take on the character of their source, whether labor, investment or whatever.

Question 8

Contractual Modification

Answer 8

The parties to a marriage retain the right - before, during, and at the end of marriage - to alter most (but not all) of the default CP rules by agreement.

Question 9

Commingling

Answer 9

CP and SP can be mixed together. The term commingled property communicates that an asset is partially owned as CP and as one/both spouses’ SP.

Question 10

Equal Ownership

Answer 10

Division of property upon dissolution or death is by halves, with half meaning an arithmetic 50-50 percent. Parties are free to agree to a different split between themselves. But if they do not, a court must step in to divide CP in 50-50 shares.

Question 11

Title isn’t determinative

Answer 11

When an asset is acquired during marriage and titled in one spouse’s name only, the unnamed spouse obtains an equitable ownership interest in the acquisition. CP assets are owned by both spouses.

Question 12

Quasi-CP

Answer 12

is property that is acquired by a spouse during marriage while domiciled in another state

Question 13

Untitled assets

Answer 13

For these assets, possession is a proxy for ownership, subject to proof of date of purchase.

Question 14

Rebuttal of CP presumption

Answer 14

Rebuttal is the SP claimant who proves, by a preponderance of the evidence, that the property was purchased by or derived from SP –> tracing

Question 15

CA allows spouses to hold property as

Answer 15

(1) JT with Right of Survivorship
(2) Tenants in Common
(3) CP
(4) CP with ROS

Question 16

Joint Title Presumption

Answer 16

For the purpose of division of property on dissolution of marriage or legal separation, property held in one of these forms is presumed to be CP

Question 17

Rebuttal to JT/CP Presumption

Answer 17

A clear statement in the deed that the property is SP OR
Proof that the parties have made an enforceable written agreement that the property is SP.

Question 18

Lender’s Intent Test

Answer 18

In a dispute between the spouses, the general presumption characterizes borrowed funds as CP unless the lender extended the loan solely on one spouse’s SP information and assets.

Question 19

Lucrative acquisition

Answer 19

SP. The result of gratuity or a windfall received during marriage.

Question 20

Examples of onerous acquisition

Answer 20

• business gifts received in lieu of work compensation,
• business profits that result from one or both spouse’s labor, mgmt, skill, or judgment
• Deferred compensation
• adverse possession claims
• enforceable K rights and proceeds
• contingent interests
• K consideration received

Question 21

SP Further defined

Answer 21

• Property acquired before marriage or during marriage by gift, bequest, devise, or descent
• In CA, rents, issues and profits of SP are also characterized as SP (basic tracing)
• Personal injury claims (and recoveries) that arose before marriage and after separation are SP of the injured spouse

Question 22

Title isn’t determinative

Answer 22

When an asset is acquired during marriage and titled in one spouse’s name only, the unnamed spouse obtains an equitable ownership interest in the acquisition.

Question 23

Effect of separation

Answer 23

Separate and apart requires the separating spouse to express to the other spouse his or her intent to end the marriage, and conduct that is consistent with his or her intent to end the marriage.

Question 24

Contractual Modification Principle

Answer 24

The parties to a marriage retain the right - before, during, and at the end of marriage - to alter most (but not all) of the default CP rules by agreement.

Question 25

Formal termination of Marital Relationship

Answer 25

Entry of judgment of legal separation occurs on a date certain. After that date, the earnings of each party are the SP of the party acquiring the earnings. When the marriage ends, the CP assets are accounted for and distributed

Question 26

Division of assets

Answer 26

Division of property upon dissolution is by halves, with half meaning an arithmetic 50-50 percent. Parties are free to agree to a different split between themselves. But if they do not, a court must step in to divide CP in 50-50 shares, on an asset-by-asset basis.

Question 27

Interest

Answer 27

Each spouse owns a vested, undivided, one-half interest in each and every CP asset as it is acquired.

Question 28

Separation

Answer 28

The earnings and accumulation of a spouse while living “separate and apart” from the other spouse, are the SP of the spouse.
1. The spouse has expressed to the other spouse his or her intent to end the marriage. AND
2. The conduct of the spouse is consistent with his or her intent to end the marriage.

Question 29

Presumption of TiC

Answer 29

Default common law concurrent title form for assets
- Each TiC has an undivided, fractional interest in the property (doesn’t have to be halves). Freely alienable and descendible.

Question 30

Presumption of TiC at dissolution and death

Answer 30

At dissolution: TiC is presumed to be CP
At death: TiC property is characterized as concurrently held SP

Question 31

Joint Tenancy

Answer 31

Optional common law concurrent title form, popular as a probate avoidance title form.
- Each JT has an undivided, fractional interest in property (1/2 for spouses).
- If JT transfers to another person, then it converts to TiC

Question 32

JT at dissolution and death

Answer 32

At dissolution: JT is presumed to be CP
- At death: JT property is characterized as concurrently held SP, and surviving spouse automatically becomes owner of titled assets by ROS

Question 33

Personal Injury Recoveries

Answer 33

PI claims and recoveries against third-party that arose during marriage are characterized as CP

Question 34

PI Claims at dissolution

Answer 34

At dissolution, damages and recoveries from PI claims are assigned to the spouse who suffered the injuries
- When the PI recovery is commingled with other assets of community estate, the standard tracing approach governs.
- Courts may deviate for “interest of justice” but at least 1/2 will be given to the injured party
- Considerations: economic condition and needs of each party, time that has elapsed since recovery of damages or accrual of the cause of action

Question 35

Lottery Winnings

Answer 35

Tracing to the source of the funds used to gamble

Question 36

Degrees

Answer 36

Community can seek reimbursement for community contributions to education or training of a party that substantially enhances the earning capacity of the party
- When the community has already substantially benefited from education, reimbursement is limited
- So if payments were made 10 years before divorce then you can’t recover

Question 37

Retirement accounts

Answer 37

when deferred earnings are earned entirely during a period when the employee is married, benefits are entirely CP.
- A court will apportion a pension by the time rule if they can base it on the ratio of time worked during marriage.

Question 38

CAMPAL

Answer 38

the special law addressing commingled bank accounts that largely tracks with this basic understanding of commingling and tracing

Question 39

Sole Account

Answer 39

An account which only has one person’s name on the bank account K

Question 40

CP Implications of a Sole account

Answer 40

if deposits in the account are CP, they remain subject to the beneficial ownership of both spouses, even if only one spouse has access to the account.

Question 41

Joint Account

Answer 41

An account with multiple parties’ names on the K, sometimes with right of survivorship

Question 42

Joint Account with Right of Survivorship

Answer 42

Default account that incorporates the right of survivorship. Sometimes referred to as “payable on death” account

Question 43

Joint account without right of survivorship

Answer 43

Analogous to tenancy in common. At death, each party’s interest in the account passes according to the account k or through decedent’s estate

Question 44

Joint account held by spouses w/ROS that cannot be changed by will

Answer 44

Basic CP account with ROS

Question 45

Titling matters at death

Answer 45

when a K of deposit designates a “CP” account, the spouses retain all testamentary rights to the sums on deposit unless:
-bank agreement says otherwise, or
-spouses expressly describe the account - in the bank agreement itself - as CP with ROS.

Question 46

CAMPAL Version of CP Presumption

Answer 46

if parties to an account are married to each other, whether or not they are so described in the deposit agreement, their net contribution to the account is presumed to be and remains their CP

Question 47

Rebuttal by SP claimant under CAMPAL

Answer 47

• sums on deposit can be traced from SP
• married persons made a written agreement, separate from the deposit agreement , that expressly provided that the sums on deposit are SP

Question 48

Burden of proof under CAMPAL

Answer 48

Clear and convincing evidence

Question 49

Family Expense Exception

Answer 49

During marriage, the spouses have a duty to support each other. Family support presumptively is paid for by the CP. If there are insufficient funds to pay for family expenses, the SP of either spouse becomes liable.

Question 50

Family expenses include:

Answer 50

food, housing, clothing, medical costs, recreation, etc.

Question 51

Tracing and commingled accounts cases

Answer 51

See v. See and Hicks

Question 52

See v. See

Answer 52

Held that property purchased during marriage from a commingled account is presumed to be CP unless SP claimant can prove otherwise

Question 53

See v See: SP rebuttal by exhaustion

Answer 53

SP claimant must show that, on the date of purchase, the CP sums on deposit in the account were exhausted (wasn’t enough CP $ available to pay for whole purchase)

Question 54

Requirements for rebuttal by exhaustion

Answer 54

• track the character of deposits, as they are made
• track the character of withdrawals as they are made
• keep a running balance of SP and CP sums on deposit, including “family expenses”
• rebuttals are specific to individual disputed items

Question 55

Hicks-Mix Direct Tracing Rebuttal:

Answer 55

The SP claimant can rebut by direct tracing coupled with a declaration of intent.

Question 56

Hicks-Mix Requirements for tracing

Answer 56

• On date of disputed purchase, both CP sums on deposit and SP sums on deposit were sufficient to make the disputed purchase
• on or near the date of the disputed purchase, the SP proponent declared an intention, in a writing separate from the account records, to make the purchase with SP sums on deposit
• Immediately after the purchase, the amount of that purchase was withdrawn from the SP sums on deposit AND
• Records prepared in anticipation of litigation are disallowed

Question 57

Separate Property Business

Answer 57

A new commingling problem: when a spouse comes to the marriage with a SP business and subsequently devotes CP labor to the business during marriage.

Question 58

Pereira

Answer 58

The growth of the SP business is attributable to CP labor.

Question 59

Pereira Formula

Answer 59

Fair Market Value @ Dissolution - (Fair Market Value @ marriage + Fair Rate of Return) = CP Excess Profits

Question 60

Fair Rate of Return (FRR)

Answer 60

Principal x Interest x Time [the FRR represents what the SP business owner would have made on their investment, had the value of the business been invested in reasonably safe securities (stocks and bonds) over the course of the marriage.
** 10 % interest usually applies, unless told otherwise.

Question 61

Van Camp

Answer 61

The growth is not attributable to CP labor, so the Van Camp formula reimburses the community for its labor, minus family expenses.

Question 62

Van Camp Approach

Answer 62

When a business grows primarily because of inflation or other market forces, the business growth is due not to community labor, but rather to the ownership of the underlying capital.

Question 63

Van Camp Formula

Answer 63

Fair Market Value @ Dissolution - (CP Labor - Family Expenses) = SP

Question 64

Labor Definition for Van Camp formula

Answer 64

Annual benchmark salary x years

Question 65

Expenses for purposes of van camp formula

Answer 65

Annual expenses x Years

Question 66

Judge has discretion

Answer 66

to decide whether to apportion (Pereira) or reimburse the community (Van Camp) depending on which approach achieves substantial justice between the parties. Practically speaking this would require the judge to exercise discretion in favor of the approach that produces the better result for the party who prevails on the issue of what contributed - community labor or market forces - to the business growth

Question 67

Third party wedding gifts - before marriage

Answer 67

Before marriage, an engagement or wedding gift is received by the prospective spouse as individuals, not as spouses. They own it as concurrently held SP.

Question 68

Revocability of an engagement gift.

Answer 68

Generally, an engagement gift made by a third party is irrevocable. The donor can change this outcome by expressly making the gift conditional upon the occurrence of marriage.

Question 69

Third party wedding gifts received during marriage

Answer 69

Received during marriage, a wedding gift titled in one spouse’s name raises the general CP presumption. Rebuttal is by tracing. If rebuttal is successful, the spouse whose name is not on title retains an equitable interest in the wedding gift as concurrently owned SP.

Question 70

Wedding gifts between would-be spouses

Answer 70

Between parties to a contemplated marriage, gifts made during the engagement period (i.e. before marriage) are the recipient’s individual property. Upon marriage, these gifts get redefined as the recipient’s SP.

Question 71

Wedding gifts between would-be spouses if they break up

Answer 71

(1) where either party to a contemplated marriage makes a gift of money or property to the other on the basis or assumption that the marriage will take place,
(2) in the event that the recipient refuses to enter into the marriage as contemplated OR
that is given up by mutual consent,
(3) the donor may recover such gift.

Question 72

Transmutation

Answer 72

A change in the character of property that takes place during marriage. Spouses may change the character of property from SP to CP, CP to SP, or from the SP of one spouse to the SP of the other spouse.

Question 73

CP as an optional concurrent title form

Answer 73

Untitled acquisitions during marriage are interpreted as CP.
- Each spouse/DP has an undivided, one-half interest in the property.
- Each spouse/DP may devise his/her one-half interest to a third party. –> converts title to TiC.
- Intestacy: Deceased spouse’s/DP’s one-half CP share will descend to the surviving spouse/DP.

Question 74

CP (optional concurrent title form) at dissolution and at death

Answer 74

• At dissolution: CP is presumed to be CP
• At death: CP is characterized as CP

Question 75

CP with Right of Survivorship

Answer 75

An optional concurrent title form, popular as probate avoidance title form.
- Each spouse/DP has an undivided, one-half interest in the property

Question 76

CP with ROS at dissolution and at death

Answer 76

• At dissolution: CP with ROS is presumed to be CP
• At death: CP with ROS property is characterized as CP. At the death of a spouse/CP, the surviving spouse/DP automatically becomes the owner of the titled asset by the ROS.

Question 77

Tracing to title

Answer 77

Generally, property is characterized as of the inception of title. For titled assets, the date of inception is the date that title was acquired. For untitled assets, the date of acquisition ordinarily correlates with the date of purchase or first possession.

Question 78

Secured transactions

Answer 78

the date of acquisition is the inception of title even though the record title is encumbered by a lien, mortgage, or deed of trust.

Question 79

Aufmuth formula for purchases on credit

Answer 79

Applies to purchases made during marriage, look for:

(1) the existence of the marriage
(2) a purchase on credit
(3) commingling of SP and CP fund sources

Question 80

Vieux Court of Appeal

Answer 80

Held that the community established an equitable ownership right in the property by its contributions to purchase

Question 81

Vieux –> Moore Issue Spotting

Answer 81

1. SP down payment
2. SP loan
3. Property purchased shortly before the marriage
4. CP contributions to loan principal payments.
5. H + W divorce.

Question 82

Marsden Issue Spotting

Answer 82

1. SP down payment
2. SP loan
3. Property purchased further from marriage
4. Property value appreciates before marriage, and the SP proponent can provide an appraisal report dated on or near the date of marriage.
5. CP contributions to loan principal payments.
6. H + W divorce

Question 83

Marsden Formula continued

Answer 83

• Start with Moore formula
• Adding in premarital equity and appreciation
• Equity = SP payments made before marriage
• Appreciation = Fair market value at marriage - HPP

Question 84

CP Improvements to SP Property

Answer 84

If improvement is a capital improvement, the CP estate is entitled to an equitable ownership interest in the property. A capital improvement is one that increases the SP’s fair market value.

Question 85

Non Capital Improvement

Answer 85

If the improvement is a non-capital improvement, the CP estate is entitled to reimbursement for its contributions to construction costs.

Question 86

SP Business

Answer 86

A new commingling problem: When a spouse comes to the marriage with a SP business and subsequently devotes CP labor to the business during marriage. Any CP labor that goes towards improving the financial lives of the partners must be accounted for at the termination of marriage. The trial court has discretion to decide, at the end of marriage, how best to account for a SP business that one or both spouses worked in. It does so by deciding which approach furthers substantial justice between the parties.

Question 87

Analytical process for SP Business.

Answer 87

(1) SP claimant has burden of proving that the business is in fact a SP business, (2) the community can then show that community labor contributed more than minimal effort to the growth of the business’s value during the marriage. (3) the court applies either Perreira or Van Camp based on whichever furthers substanital justice between the parites.

Question 88

Perreira

Answer 88

The growth of the SP business is attributable to CP labor.

Question 89

Perreira Formula

Answer 89

FMV @ dissolution - (FMV @ marriage + Fair Rate of Return)
- FRR = Principal x Interest x Time
- FRR represents what the business owner would have made on their investment, had the value of the business been invested in reasonably safe securities (stocks and bonds) over the course of the marriage. ***10% interest usually applies, unless told otherwise.

Question 90

Van Camp

Answer 90

The growth is not attributable to CP labor, so the Van Camp formula reimburses the community for family expenses.
- When a business grows primarily because of inflation or other market forces, the business growth is not due to community labor, but rather to the ownership of the underlying capital.

Question 91

Van Camp Formula

Answer 91

FMV @ dissolution - (CP Labor - Family expenses) = SP
- Labor = annual benchmark salary x Years of marriage
- Expenses - Annual expenses x Years of Marriage

Question 92

Judge has Discretion

Answer 92

A judge has discretion to decide whether to apportion (Perreira) or reimburse the community (Van Camp) depending on which approach achieves substantial justice between the parties. Practically speaking this would require the judge to exercise discretion in favor of the approach that produces the better result for the party who prevails on the issue of what contributed - community labor or market forces - to the business’ growth.

Question 93

Personal Property

Answer 93

Personal Property is defined as every kind of property that is not real is personal.

Question 94

Management and control over community personal property

Answer 94

Either spouse has the power to manage and control community personal property with the same absolute power of disposition, other than testamentary as the spouse has over their own SP.

Question 95

Testamentary Exception

Answer 95

Testamentary matters are excluded because a spouse only has the power to dispose of their one-half of a CP asset at death.

Question 96

Making gifts of Community Personal Property

Answer 96

Neither spouse can make a unilateral gift of CP without the written consent of the other spouse. Gifts can be ratified after the fact.

This does not apply to gifts mutually given by both spouses to third parties. Gifts between spouses are governed by transmutation rules.

Question 97

Selling Community Personal Property

Answer 97

Neither spouse can sell community personal property without the written consent to the other spouse. These sales can be ratified after the fact.

Question 98

What does the no sale rule apply to?

Answer 98

(1) sales for less than fair and reasonable value of the asset; (2) the family dwelling, or furniture, furnishings or fittings of the home and (3) clothing or wearing of the other spouse or minor children. [other spouse can void purchase, if no written consent was obtained, avoidance is at the other spouse’s election. The spouse can ratify the purchase, seek a remedy against the spouse’s SP estate or sue for the return of the item in exchange for sale proceeds.]

Question 99

CP Business

Answer 99

One spouse may have primary management and control over a CP business. However, if that spouse wants to sell, lease, exchange, encumber, or dispose of all or substantially all of the CP personal property in the business (all the money or assets) the manager-spouse must give prior written notice to the other spouse.

Question 100

Community Real Property

Answer 100

Either spouse has the power to manage and control the community real property but both spouses, either personally or by a duly authorized agent, must join in executing any instrument by which that community real property or any interest therein is leased for a longer period than one year or is sold, conveyed, or encumbered.

Remedy: the non-joined spouse has one year from recording of the transaction to void it.

Question 101

Quasi-Fiduciary Duties Among Spouses

Answer 101

The duty owed among spouses is not the same high standard to which a professional trustee is held. The duty is more in the nature of a duty that a business partner owes another business partner.

Question 102

Access to Books

Answer 102

Either spouse has access at all times to any financial/accounting books kept regarding a transaction for the purposes of inspection and copying (no obligation to keep books, but if you do, they must be open and accessible).

Question 103

Must Render Upon Request

Answer 103

Either spouse must render upon request accurate and full information affecting any transaction that concerns the CP. Either spouse holds as a trustee of any benefit or profit derived from any transaction by one spouse without the consent of the other spouse which concerns the CP.

Question 104

Voluntary Disclosure

Answer 104

Voluntary Disclosure during the continuance of marriage, at least in theory, can reduce the necessity, cost, and emotional toll of formal discovery in the event the marriage ends.

Question 105

Right of Appeal Closes

Answer 105

Moreover, the unlawful withholding of evidence of income and assets closes the door to the party’s rights of appeal on related issues. After a trial court exercises its discretion, the non disclosing party cannot later complain that a related order is not based on the evidence that they refused to disclose in the first place.

Question 106

Duty of Care Among Spouses

Answer 106

The duty of care owed between spouses for the management and control of their CP requires them to refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of the law.

Question 107

Furthering One’s Interest

Answer 107

Duties are not necessarily breached when one spouse furthers their own interest. However, in any transaction in which one spouse obtains any unfair advantage over the other spouse, undue influence is presumed in favor of the adversely affected spouse. Rebuttal is by the benefitted spouse who must show that the non-acting spouse consented to the transaction after disclosure was made.

Question 108

Debts by Spouses - Grolemund Principle

Answer 108

Since both spouses have the legal right to manage and control CP, either spouse can obligate the CP to the claims of creditors. A credit can reach any property over which the debtor-spouse has the legal right to manage and control.

At marriage’s end, unpaid liabilities like the mortgage, any credit cards that maintain a balance, and education loans, etc., are assigned to one or both spouses, depending on when the debt was incurred and which of the spouses incurred the debt.

Question 109

Contract Liabilities

Answer 109

A contract liability is incurred when the K is made.

Question 110

Contract Debt Rule

Answer 110

If made during marriage, the community estate, the debtor-spouse’s SP estate, and the non-debtor spouse’s SP estate are all liable for any K debt that was incurred by one or both spouses during marriage for “necessaries of life.” Define necessaries of life.

Question 111

Necessaries of Life

Answer 111

are expenses necessary considering all of the circumstances - his station in life, his particular type of employment, etc.

Question 112

Necessaries of Life Doctrine

Answer 112

A married person is personally liable for debts incurred for necessaries of life of the person’s spouse while the spouses are living together or separately. Necessaries of life are expenses necessary considering all the circumstances - his station in life, his particular type of employment, etc.

Question 113

Family Expense

Answer 113

The community is liable for family expenses. If and when the community funds are exhausted, the SP becomes liable for family expenses without reimbursement.

Question 114

Contract Debt During Separation Period

Answer 114

During a period of separation, absent a court order stating otherwise, the non-debtor spouse is personally liable only for the other spouse’s common necessaries of life.

Question 115

Tort Liabilities

Answer 115

A tort liability is incurred when the tort occurs.

Question 116

Both Spouses

Answer 116

For a tort that occurs during marriage, if both spouses are tortfeasors, then the CP and SP estates of both spouses are liable for that obligation.

Question 117

One Spouse

Answer 117

If the tort is the obligation of only one spouse, then the CP and SP of the tortfeasors are liable. Tort creditors can reach the CP first if the tort was committed while performing an activity for the benefit for the community. Otherwise, they must exhaust the SP estate first. [Includes almost every tort except DV, gross negligence or criminal activity].

Question 118

Other obligations

Answer 118

Any other obligation that isn’t a K or tort obligation can be charged against the CP estate when incurred before or during marriage by either spouse. This includes: premarital child support obligations, extramarital child support obligations, spousal support obligations to a former spouse, parental support obligations for an indigent parent or parents. Support obligatons are presumably paid by SP but can be paid by CP with the right of reimbursement (except for parental support).

Question 119

Protecting the Non-Debtor Spouse from the premarital debts of the debtor-spouse

Answer 119

The non-debtor spouse must continuously meet both elements:
1. The non-debtor spouse must hold their CP earnings in a sole account that the debtor spouse has no right to withdraw from;
2. The non-debtor spouse must keep those CP earnings UN-COMMINGLED. (avoids Grolemund by taking away the debtor spouse’s management and control capabilities.

Question 120

Default CP System

Answer 120

The CP system is a default marital property system. This means that all assets, other than gifts, that are acquired during marriage are characterized as CP, regardless of whether the spouses concern themselves with the niceties of concurrent title or not.

Question 121

Premarital agreement formalities

Answer 121

All premarital agreements and other marital property agreements shall be in writing and signed by both parties. Consideration is not a required element of enforceability.

Question 122

Extra rule for premarital agreements

Answer 122

A premarital agreement that is signed by both parents, proxies, matchmakers, or other cultural agents who are clothed by tradition or culture with indicia of authority cannot enter into a premarital K on behalf of one/both spouses.

Question 123

Permissible subject matter for premarital agreements

Answer 123

• parties rights and obligations over property acquired by either (or both) before or during marriage, including property in other jdxs
• how property will be managed and controlled
• how property will be disposed of in the event of separation, dissolution, or death of a spouse,
• how property will be disposed of in the event of a contingency such as inheritance, windfall, success (or failure) of a business, etc.
• Testamentary and trust matters
• Life insurance matters
• Choice of law matters, whether secular or religious
• Any other matter not in violation of public policy

Question 124

General enforceability issues

Answer 124

An enforceable premarital agreement is one that is based on fair disclosure and entered into voluntarily. When a proponent produces a premarital agreement that satisfies the basic formalities, the burden of proof shifts to the opponent to prove that the agreement (as a document) is either unconscionable or involuntary.

Question 125

Unconscionability (Disclosure)

Answer 125

Before execution, all of the following apply to the party against whom enforcement is sought:
(1) was not not provided with a fair, reasonable, and full disclosure of the property or financial obligations of the other party, (2) there was no voluntary, express waiver in writing of the right to disclosure, and (3) that the party did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party shows lack of disclosure. A lack of disclosure makes the premarital agreement unconscionable and therefore is unenforceable against the party whom enforcement is sought.

Question 126

Voluntariness (Consent)

Answer 126

A premarital agreement was coerced unless the court finds that (1) the party against whom enforcement is sought was represented by independent legal counsel at time of signing or waived the right of representation in writing, (2) there were not less than 7 calendar days between presentation of the agreement and signing, (3) no evidence of duress, fraud, undue influence or incapacity, and (4) no other facts that raise questions of voluntariness. The party against whom enforcement is sought bears the burden of proof. Non-english translations of all documents are required.

Question 127

Agreements waiving post divorce spousal support

Answer 127

Historically, agreements that waived post-divorce spousal supports were unenforceable.

Currently, premarital agreements that were executed on or after January 1, 2002 may waive post-divorce spousal support if: (1) a party who waives spousal support is represented by separate and independent counsel for purposes of the premarital agreement and (2) Later, at enforcement, the party against whom enforcement is sought can present evidence that the spousal support waiver is unconscionable (enforcement will leave that party eligible for public assistance).

Question 128

Court Discretion

Answer 128

The court can choose to not enforce a post-divorce spousal support waiver on voluntariness grounds. This is especially the case when the parties have a documented history of abuse on or near execution date of the premarital agreement.

Question 129

Altering Agreements During Marriage

Answer 129

During marriage, a premarital agreement can be amended or revoked so long as the same formalities are followed. In the OG premarital agreement, parties can agree about events that might trigger amendment or revocation or they can agree to a date after which the premarital agreement automatically becomes ineffective.

Question 130

Required Updates to Agreements?

Answer 130

Premarital agreements can becomes so stale that the passage of time constitutes a form of K. Generally, this would arise when the spouses develop expectations during the continuance of the marriage that are so different from the expectations upon which their premarital agreement was based that the failure to update the agreement itself is conduct that gives rise to the equitable contract defense.

Question 131

Equiable Estoppel from Black’s:

Answer 131

An affirmative defense alleging good-faith reliance on a misleading representation and an injury or detrimental change in position resulting from that reliance. Couples seem to be obligated to address any major changes in their circumstances. But it is not (yet) clear which party bears the legal burden of seeking updates. SOL are tolled (paused) during marriage. Where a party seeks to enforce an otherwise valid but stale premarital agreement, the party who seeks to enforce should expect that the other party will raise equitable defenses.

Question 132

Transmutation Agreements (Formalities)

Answer 132

A transmutation agreement must be in writing and demonstrate an express declaration that the character of the property will be changed, and signed by the spouse whose interest in the property is adversely affected. No particular type of document or wording is necessary to effect a valid transmutation. A valid express declaration is an unambiguous statement of present intent to change the character of the asset in question. An express declaration must be clear on its face.

Question 133

Additional topics to consider regarding transmutation agreements

Answer 133

(1) duties between spouses, (2) mutual consent required, (3) unfair advantage in bargained-for-exchange, (4) unfair advantage in gratuitous exchange

Question 134

Duties between spouses

Answer 134

spouses are held to general fiduciary duties of the highest good faith and fair dealing, and neither spouse may take an unfair advantage over the other.

Question 135

Mutual Consent Required

Answer 135

Both spouses must agree to the same thing in the same sense. Mutual consent arises from words, deeds, and circumstances surrounding the transaction - outward expressions and communications that occur between the parties. Consent requires voluntariness (consent freely given) and full and fair disclosure (agreeing to the same thing in the same sense).

Question 136

Unfair advantage in bargained-for exchanges

Answer 136

The presumption of unfair advantage is only raised if there is proof that the benefitted spouse actually took any unfair advantage of the other spouse.

Question 137

Unfair Advantage in Gratuitous Exchanges

Answer 137

The presumption of undue influence is raised in favor of the adversely affected spouse as a matter of course. The rationale is that the beneficially affected spouse got something for nothing. The presumption of undue influence os raised by operation of law leaving the benefitted spouse to rebut the presumption with actual evidence that the adversely affected spouse made the transmutation consensually and voluntarily and with understanding of its consequences based on full disclosure.

Question 138

Title is Not Determinative/Not Implicit Declaration

Answer 138

Purchases made by a spouse from a third party and titled in one spouse’s name only do not contain an implicit declaration to change the character of the property. When spouse uses CP funds to buy an item, by application of tracing principle that item is CP regardless of whether title was taken in one name only.

Question 139

A transmutation by grant deed can meet the transmutation formality requirements.

Answer 139

A grant deed in writing; the word “grant” on the face is an express declaration of the grantor’s intention to transfer the property to the grantee; and the deed is signed by the grantor (the person who is adversely affected). The grant/conveyance language must be an unambiguous statement of present intent, whether in a sentence in a form of operative words in a deed, to change the character of the asset in question.

Question 140

Transmutation by Transfer

Answer 140

A transmutation can be made by transfer (like, by deed). Generally, all of the rules are the same except: regarding the signing. A transmutation by deed from SP to CP is effective so long as only the adversely affected grantor-spouse signs; regarding the effective date: The effective date of the transmutation is the date on which the transfer document is signed. Note: typical real estate transaction rules apply such as recording and notice requirements.

Question 141

Interspousal Gifts

Answer 141

Gifts of tangible property between spouses are exempt from the written formality requirements for transmutations if: (1) the gift is clothing, wearing apparel, jewelry, or other tangible articles of personal nature that is used solely or principally by the spouse to whom the gift is made. (No real property, cars, cash, or securities), AND (2) the gift cannot be substantial in value taking into account the circumstances of the marriage.

Question 142

Domestic Violence

Answer 142

Historically, the doctrine of interspousal immunity prohibited tort actions between spouses however, this was abolished.

Even if interspousal torts are allowed, some argued that evidentiary privileges prohibited these claims. In a lawsuit involving a married person, a spouse has the privilege not to disclose confidential marital communications made by the other spouse. This includes not being required to testify against a spouse in a criminal proceeding and not being called as an adverse witness against the spouse.

Question 143

Interspousal Tort Claims

Answer 143

Interspousal tort claims may be pursued during marriage, independent of a dissolution proceeding, or consolidated with a pending dissolution. They may also be pursued after a final judgment of dissolution. Examples of interspousal tort claims include: assault, battery, false imprisonment, intentional infliction of emotional distress.

Question 144

Interspousal Tort Claims SOL

Answer 144

Interspousal tort claims must be filed within 3 years from the date of the last act of DV or within 3 years from the date the plaintiff discovers or reasonably should have discovered that an injury or illness resulted from an action of DV by teh defendant against the plaintiff.

Question 145

Interspousal Tort Claim Damages

Answer 145

The spouse found liable in tort can be assessed general damages, special damages, and punitive damages. An injured party is also entitled to equitable relief, an injunction, costs, and any other relief that the court deems proper, including reasonable attorney’s fees. Damages arising in tort are the prevailing spouse’s SP.

Question 146

Interspousal Tort Claim Paying Damages

Answer 146

The tortfeasor’s SP is marshaled first. CP cannot be used without the written consent of the injured spouse and only at the discretion of the judge.

Question 147

DV Protective Orders

Answer 147

Abuse that has or could be perpetuated against a spouse or former spouse, cohabitant or former cohabitant, person with whom the respondent is having or has had dating a or engagement relationship, person with whom the respondent has had a child, child of a party, any other person related by consanguinity or affinity within the second degree.

Question 148

Emergency Protective Order

Answer 148

An EPO can be requested by a police officer if there is an immediate and present danger of abuse, abduction, or stalking, with the purpose of preventing future acts of abuse, abduction, or stalking. Generally, an EPO is more restrictive of the restrained person than is a party-initiated restraining or protective order.

Question 149

Temporary Restraining Order

Answer 149

One spouse may request a TRO against the other spouse. An ex parte TRO may be issued on the same day as filed on proof of past act or acts or abuse with the purpose of preventing future acts of abuse. There is no time frame requirement for the past acts. A TRO can be issued without notice of the other spouse but a copy of the TRO and hearing notice must be served on the responding spouse. The TRO is valid until the date of the hearing which is within 21 days. Hearing: the court will issue a restraining order if it finds reasonable proof of a past act or acts of abuse by the spouse being restrained.

Question 150

Abuse definition

Answer 150

Intentionally or recklessly caused bodily injury; sexual assault, stalking; placing a person in reasonable apprehension of imminent serious bodily injury to that person or to another; destroying personal property; annoying contact in person, or by mail or phone calls; abusing a pet/animal and financial abuse and impersonation. Abuse can include non-physical acts.

Question 151

Recoveries under the DV Prevention Act

Answer 151

Restitution: When a TRO is issued, restitution is given for lost earnings and out of pocket expenses (medical care, temporary housing, transportation, and child support) related to the factual findings upon which the TRO was granted. When the TRO is denied, the respondent is owed restitution by the petitioner for out of pocket expenses related to the responding to the TRO.

Question 152

Murder of Spouse

Answer 152

A spouse who is convicted of murdering their spouse forfeits any CP interest in any retirement benefits.

Question 153

Wrongful Death

Answer 153

A spouse who causes their spouse’s death is not entitled to take under a will or trust or through intestate succession. The same applies to bonds, life insurance, and other contractual benefits.

Question 155

Join Tenancy

Answer 155

A JT who causes their JT’s death has no right of survivorship.

Question 156

Valid Marriage

Answer 156

A valid marriage is a civil K between 2 persons based on consent, the issuance of a license and solemnization. In CA, there is no common law marriage or divorce.

Question 157

Capacity/Consent

Answer 157

A person can consent to a marriage when they understand in a lucid moment the nature of the marriage K, its duties and responsibilities.

Question 158

Ceremony Requirements

Answer 158

No particular form for the ceremony of marriage is required but the parties shall declare in the physical presence of the person solemnizing the marriage and necessary witnesses that they take each other as spouses.

Question 159

Termination of Marriage

Answer 159

Marriage is dissolved only by one of the following: (1) death of one of the parties, (2) a judgment of dissolution of marriage, and (3) a judgment of nullity of marriage

Question 160

Dissolution/Separation Grounds

Answer 160

The only 2 grounds for dissolution or legal separation are (1) irreconcilable differences and (2) incurable insanity.

Question 161

Irreconcilable differences

Answer 161

are those differences which have caused the irremediable breakdown of the marriage. Irreconciable differences refers to the existence of substantial marital problems which have so impaired the marriage relationship that the legitimate objects of matrimony have been destroyed and as to which there is no reasonable possibility of elimination, correction, or resolution.

Question 162

Incurable Insanity

Answer 162

A condition that requires proof, including competent medical or psychiatric testimony, that the insane spouse was at the time the petition was filed, and remains incurably insane. This does not relieve a spouse of support obligations.

Question 163

Residency Requirements

Answer 163

At least one of the parties to a marriage must be a resident of the state in order to file for a petition for dissolution in CA. The resident party must have lived in CA for six months and in the filing county for three months immediately before filing the dissolution petition.

Question 164

Required Information on Petition

Answer 164

The date of marriage, the date of separation, the # of years from marriage to separation, the # of children of the marriage and the age and birthdate of each minor child.

Question 165

Waiting Period

Answer 165

There must be at least 6 months from the date of service or date of appearance of the respondent, whichever occurs first, and the final judgment of dissolution.

Question 166

Subsequent Marriage

Answer 166

A person can lawfully remarry after their status as single person is restored. A judgment or legal separation does not terminate the parties’ marriage and hence it does not restore the parties’ status to that of single persons. A court has the authority to bifurcate the issue of marital status from property issues. Although the court issues a judgment terminating the parties marital status, it retains jdx over the property issues.

Question 167

Summary Dissolution

Answer 167

In summary dissolution, the final judgment dissolving the marriage may be entered six months after the parties jointly file a petition for dissolution. Because the summary process starts with a jointly filed petition for dissolution, it is based on an ongoing agreement between the parties. The terms of the parties’ agreement constitute a waiver of their respective rights to spousal support, right to appeal and rights to move for a new trial. Some of the requirements for summary dissolution include: No children; Marriage less than 5 years; No real property
No debts greater than 4K; CP less than 25K; No SP.

Question 168

Terminating Support

Answer 168

Cohabitation can be ground upon which to terminate a spousal support award. If the supported spouse begins to cohabitate with an intimate partner, a rebuttable presumption arises of a decreased need for spousal support from that person’s former spouse.

Question 169

Division of Assets

Answer 169

During the dissolution process, the court is required to divide the community estate of the parties equally. Accomplishing equal division includes characterizing, valuing, and dividing the CP and Quasi-CP assets in such a way that might appear to result in seemingly unequal division of assets and liabilities. QuasiCP is property that is acquired by a spouse during marriage while domiciled in another state. If the Quasi-CP is outside of the jurisdiction of the court, the court may make a seemingly unequal distribution of assets to compensate for that non-California property.

Question 170

Assigning SP Debts

Answer 170

SP is protected by the California Constitution. Therefore, a court cannot award the SP of one spouse to the other spouse in a dissolution proceeding. What a court can do is to impose an equitable lien against the SP of a spouse.

Question 171

Equitable Lien

Answer 171

A right, enforceable only in equity, to have a demand satisfied from a particular fund or specific property, without having possession of the fund or property.

Question 172

Bad Behavior During Dissolution

Answer 172

As for real and personal CP, spouses are held to quasi-fiduciary duties in transactions between themselves, including those that result from dissolving the community estate. Those duties extend until such time as the assets and liabilities have been divided by the parties or by the court.

Question 173

Hiding Assets

Answer 173

Courts have continuing jurisdiction over any community estate asset or liability that was omitted or not adjudicated by the judgment. Omitted assets shall be equally divided unless, upon the showing of good cause, the interests of justice require otherwise.

Question 174

Arbitration of Law-Value Community Estates

Answer 174

If the parties do not agree to a voluntary division of the community estate, and in the court’s opinion the total value of the CP and quasi-CP in controversy does not exceed $50K, the issues of the character, value, and division of the community estate may be submitted to non-appealable arbitration.

Question 175

Super Low Value Estates and Default Judgments

Answer 175

If the net value of the community estate is less than 5K and one party cannot be located through the exercise of reasonable diligence, the court may award all of the community estate to the other party.

Question 176

Tainted Final Judgments (SOL)

Answer 176

Actual fraud, perjury or disclosure violations: 1 year after the complaining party discovered or should have discovered the fraud, perjury or disclosure violation.

Question 177

Duress or Mental Incapacity

Answer 177

2 years after the date of entry of judgment

Question 178

Mistake

Answer 178

1 year after the date of the entry of judgment.

Question 179

Settlement Agreements:

Answer 179

Spouses may agree, in writing, to an immediate separation and may provide in the agreement for the support of either and of their children during the separation or upon dissolution of their marriage. The mutual consent of the parties is sufficient consideration for the agreement.

Question 180

Putative Spouse Status

Answer 180

A court-granted status to a party in a void or voidable marriage if (1) evidence that the marriage the party thought was valid turned out not to be and (2) substantial evidence of the petitioning party’s genuine and honest belief in the validity of the marriage. **Putative spouses receive the same protection as actual spouses under the CP system. There is a split in the COA about which spouse gets putative spousal protection: only the harmed spouse or both spouses.

Question 181

Void marriage

Answer 181

A marriage can be void on one of the following grounds: (1) failure to meet statutory formalities, (2) bigamy or polygamy and (3) incest. Legally speaking, a void marriage never comes into existence. Parties to a void marriage are permitted to seek a judgment of nullity to provide public notice of the non-existence of the marriage.

Question 182

Voidable Marriage

Answer 182

A marriage is voidable if:(1) the petitioning party was without the capacity of consenting to the marriage when it was contracted; (2) The petitioning party was unaware that the other spouse was still married to a different person; (3) Either party was of unsound mind; (4) Consent was obtained by fraud or by force; (5) Either party was, at the time of the marriage, physically incapable of entering into the marriage state and that incapacity continues and appears to be incurable (impotence). **A petitioning party must show one of the above and the petitioner must not have freely cohabited with the other as husband or wife after learning about the defect of the marriage.

Question 183

Property Distribution at Death

Answer 183

Marriage is dissolved by (1) the death of one of the parties, (2) judgment of dissolution of marriage and (3) judgment of nullity of marriage.

Question 184

Decedent’s CP

Answer 184

At death, one half of the CP belongs to the surviving spouse and the other half belongs to the decedent. A married decedent has the right to dispose of their one half CP by will. A CP asset that fails into the decedent’s estate but is not effectively disposed of by the decedent’s will shall pass by intestacy rules (which strongly favors the surviving spouse.

Question 185

Decedent’s SP

Answer 185

A married decedent has the right to dispose of all of his SP by will or nonprobate transfer. If a married decedent dies intestate, distribution is as follows: (1) If no surviving children, parents or siblings: All to the surviving spouse (2) If a surviving child, parentless grandchild or parent(s): half to the surviving spouse and half to the others and (3) If surviving children and/or parentless grandchildren: One third to the surviving spouse, two thirds to the others.

Question 186

Nonprobate Transfers

Answer 186

A property owner has the right to dispose of property prior to or at death by inter vivos gift, beneficial designation, or right of survivorship. Property disposed of in these ways passes prior to the formation of the decedent’s probate estate. It is not available to the decedent’s estate creditors.

Question 187

Probate Estate

Answer 187

All other property that the decedent owns after death. A married decedent’s estate is made up of: the decedent’s one half CP interest in each CP asset and the decedent’s SP.

Question 188

Executor

Answer 188

A decedent can name an executor of their choice in a will. In the event of intestacy, the surviving spouse or domestic partner is entitled to priority of appointment as the executor.

Question 189

Order in which decedent’s probate is settled:

Answer 189

Taxes
Probate estate administration expenses
Debts
Property to support the surviving spouse, minor children, dependent adult children, dependent parents, and the family home
Distributions to will beneficiaries
Intestate distributions
Remainder escheats to the state.

Question 190

Debts

Answer 190

Creditors generally have one year in which to make a claim against the decedent’s estate. If the surviving spouse had actual knowledge of the debt prior to the expiration of the one year period, and the executor fails to provide the creditor with written notice of the probate administration, the statute of limitations is extended to four years. The surviving spouse may elect to contractually assume an obligation for which the decedent was liable.

Question 191

Surviving Former Spouse

Answer 191

A surviving former spouse may invoke the benefit of a CP presumption as to any of the decedent’s property that was acquired during a dissolved marriage, but only if the claimant’s marriage to the decedent was dissolved less than four years before the decedent’s death. If the marriage was dissolved more than four years before the decedent’s death, the claimant must demonstrate acquisition during the marriage of the CP property.

Question 192

Nonprobate Transfers to Former Spouse

Answer 192

The former spouse loses their right to the proceeds upon dissolution unless the policyholder intends otherwise. This applies to POD transfers, some bank accounts, and joint tenancies.

Question 193

CA Divestiture Statute

Answer 193

A nonprobate transfer to the transferor’s former spouse, in an instrument executed by the transferor before or during the marriage, fails if, at the time of the transferor’s death, the former spouse is not the transferor’s surviving spouse. But there is an exception if there is clear and convincing evidence that the transferor intended to preserve the nonprobate transfer to the former spouse.

Question 194

Taking out life insurance on a spouse

Answer 194

Even though a spouse has an insurable interest in the life of the other spouse, under California law an insurance company may not issue an individual life insurance policy to an applicant on the applicant spouse unless the applicant’s spouse has signed the policy application or has otherwise been notified in advance of the issuance of the policy.

Question 195

Tracing Premium Paymentes to CP funds

Answer 195

The policyholder can use CP funds to pay for premiums, but may still name a non spousal beneficiary. But spouses only have testimonial rights to their one half of the CP. The other one-half belongs to the other spouse (backwards looking rule for premium payments)

Question 196

CP Premium Payments and Nonspousal Beneficiary

Answer 196

A spouse is prohibited from making a unilateral gift of community personal property to a third party without the written consent of the other spouse. Premium payments from CP funds on a term life insurance policy with a nonspousal beneficiary are considered a gift to that third party. If this occurs during marriage, the other spouse can void 100% of that gift amount. At dissolution, the other spouse is entitled to 50% of that gift amount.

Question 197

Last Premium rule

Answer 197

The character of the last premium payment determines the character of any insurance proceeds that pay out during that term. Proportional ownership is permitted as measured by contributions to the last premium payment (Forward looking rule for proceeds (the payout) **Remember: at death, one half of the CP belongs to the surviving spouse and the other half belongs to the decedent. A married decedent has the right to dispose of their one half CP by will.

Question 198

Former Spouse as Designee

Answer 198

If a former spouse is named as beneficial designee, that former spouse loses their right to the proceeds upon dissolution unless the policyholder intends otherwise (clear and convincing evidence standard applies here too).

Question 199

Whole Life insurance

Answer 199

Whole life insurance = term life insurance plus savings plan

Week Eleven
Property Distribution at Death
Marriage is dissolved by (1) the death of one of the parties, (2) judgment of dissolution of marriage and (3) judgment of nullity of marriage.

Decedent’s CP: At death, one half of the CP belongs to the surviving spouse and the other half belongs to the decedent. A married decedent has the right to dispose of their one half CP by will. A CP asset that fails into the decedent’s estate but is not effectively disposed of by the decedent’s will shall pass by intestacy rules (which strongly favors the surviving spouse.

Decedent’s SP: A married decedent has the right to dispose of all of his SP by will or nonprobate transfer. If a married decedent dies intestate, distribution is as follows: (1) If no surviving children, parents or siblings: All to the surviving spouse (2) If a surviving child, parentless grandchild or parent(s): half to the surviving spouse and half to the others and (3) If surviving children and/or parentless grandchildren: One third to the surviving spouse, two thirds to the others.

Nonprobate transfers: A property owner has the right to dispose of property prior to or at death by inter vivos gift, beneficial designation, or right of survivorship. Property disposed of in these ways passes prior to the formation of the decedent’s probate estate. It is not available to the decedent’s estate creditors.

Probate Estate: All other property that the decedent owns after death. A married decedent’s estate is made up of: the decedent’s one half CP interest in each CP asset and the decedent’s SP.

Executor: A decedent can name an executor of their choice in a will. In the event of intestacy, the surviving spouse or domestic partner is entitled to priority of appointment as the executor.

Order in which decedent’s probate estate is settled:
Taxes
Probate estate administration expenses
Debts
Property to support the surviving spouse, minor children, dependent adult children, dependent parents, and the family home
Distributions to will beneficiaries
Intestate distributions
Remainder escheats to the state.

Debts: Creditors generally have one year in which to make a claim against the decedent’s estate. If the surviving spouse had actual knowledge of the debt prior to the expiration of the one year period, and the executor fails to provide the creditor with written notice of the probate administration, the statute of limitations is extended to four years. The surviving spouse may elect to contractually assume an obligation for which the decedent was liable.

Surviving Former Spouse: A surviving former spouse may invoke the benefit of a CP presumption as to any of the decedent’s property that was acquired during a dissolved marriage, but only if the claimant’s marriage to the decedent was dissolved less than four years before the decedent’s death. If the marriage was dissolved more than four years before the decedent’s death, the claimant must demonstrate acquisition during the marriage of the CP property.

Nonprobate Transfers to Former Spouses: The former spouse loses their right to the proceeds upon dissolution unless the policyholder intends otherwise. This applies to POD transfers, some bank accounts, and joint tenancies.

CA Divestiture Statute: A nonprobate transfer to the transferor’s former spouse, in an instrument executed by the transferor before or during the marriage, fails if, at the time of the transferor’s death, the former spouse is not the transferor’s surviving spouse. But there is an exception if there is clear and convincing evidence that the transferor intended to preserve the nonprobate transfer to the former spouse.

Life Insurance

Terminology
Policy Owner/Holder: The person who owns the policy.
Insurance Interest: A connection to the person/property covered by the insurance policy. Every person has an insurable interest in their own life and in the life of their spouse. A married person has an insurable interest in all CP, including that which is commingled with SP.
Insured: The person whose life is insured by the life insurance policy. (Usually also the policy owner/holder).
Beneficial Designee: The person the policy owner designates to receive insurance proceeds upon the occurrence of the peril insured against. (In the case of life insurance, the peril insured against is the insured’s death.)
Face Amount: The amount of insurance coverage that the policy provides.
Premium: A contract debt that the policy owner owes the insurance company to keep the policy in force. (Best understood as the monthly/quarterly/annual payment).

Insurable Interest: Every person has an insurable interest in themselves; any person on whom they depend wholly or in part for education or support. (Think spouses and parents/guardians); any person under a legal obligation to him for the payment of money or respecting property or services, of which death or illness might delay or prevent the performance. (Think creditors and spousal support obligations); Any person upon whose life any estate or interest vested in him depends. **the insurable interest must exist when the insurance takes effect but does not need to exist thereafter or when the loss occurs.

Taking out Life Insurance on a Spouse: Even though a spouse has an insurable interest in the life of the other spouse, under California law an insurance company may not issue an individual life insurance policy to an applicant on the applicant spouse unless the applicant’s spouse has signed the policy application or has otherwise been notified in advance of the issuance of the policy.

Term Life Insurance
Definition: Life insurance that covers the insured for only a specific period. It pays a fixed benefit to a named beneficiary upon the insured’s death but is not redeemable for cash value during the insured’s life.
Premium payments: the insured pays a premium amount that is priced using actuarial data. Actuarial data determines the probability that the insured will die during the policy term. If the policy is issued, it comes into existence when the first premium payment is paid. The continued timely payment of insurance premiums is a material condition of the insurance contract.

Naming Beneficiaries: A married person has the right to name a non spousal beneficiary designees on their life insurance policy. Designations are revocable. The policy owner has the right to change a beneficial designee up until their death.
Tracing Premium Payments to CP Funds: The policyholder can use CP funds to pay for premiums, but may still name a non spousal beneficiary. But spouses only have testimonial rights to their one half of the CP. The other one-half belongs to the other spouse (backwards looking rule for premium payments)

CP Premium Payments and Nonspousal Beneficiary: A spouse is prohibited from making a unilateral gift of community personal property to a third party without the written consent of the other spouse. Premium payments from CP funds on a term life insurance policy with a nonspousal beneficiary are considered a gift to that third party. If this occurs during marriage, the other spouse can void 100% of that gift amount. At dissolution, the other spouse is entitled to 50% of that gift amount.
Last Premium Rule: The character of the last premium payment determines the character of any insurance proceeds that pay out during that term. Proportional ownership is permitted as measured by contributions to the last premium payment (Forward looking rule for proceeds (the payout) **Remember: at death, one half of the CP belongs to the surviving spouse and the other half belongs to the decedent. A married decedent has the right to dispose of their one half CP by will.
Former Spouse as Designee: If a former spouse is named as beneficial designee, that former spouse loses their right to the proceeds upon dissolution unless the policyholder intends otherwise (clear and convincing evidence standard applies here too).

Whole Life Insurance
Whole life insurance = term life insurance plus savings plan
Each time the policyholder pays a whole life premium, part of the premium pays for the life insurance and the other part of the premium pays for the life insurance and the other party of the premium goes towards the savings plan that is part of the insurance product. Upon the death of the insured, a beneficial designee has a contractual right to both the amount of coverage stated in the insurance contract and to any accumulated savings. At dissolution, the savings plan of a whole life insurance policy is subject to characterization and division. Savings and apportioned by the basic tracing formula.

Question 200

Registered Domestic Partnership

Answer 200

Requirements: Domestic partners are two adults who have chosen to share one another’s lives in an intimate and committed relationship of mutual caring. The parties must have a common residence, even if one or both maintain additional residence. Domestic partners must not be married to anyone else, related by blood, younger than 18 years. They must be able to consent to the domestic partnership. Domestic partners do not need to be residents of California to register in this state.

Question 201

Rights of Registered Domestic Partners

Answer 201

Once registered with the state, registered domestic partners have the same community property rights as married couples in California. As with a marriage, this means that in any registered domestic partnership there is community property, separate property, commingled property and the need to refer to community property law.

Question 202

Termination of Registered Domestic Partnership

Answer 202

Termination of a valid registered domestic partnership is accomplished by filing a Notice of Termination of Domestic Partnership with the Secretary of State. Otherwise, as with marriage, the superior courts have jurisdiction over all proceedings relating to the dissolution of domestic partnerships.

Question 203

Domestic Partnership and Marriage Equality

Answer 203

A couple can be registered as a domestic partnership and married at the same time. Both must be dissolved before one of the spouses can marry again or register for a new domestic partnership. Parties to a registered domestic partnership who are also married to another may petition the court to dissolve both their domestic partnership and their marriage in a single proceeding.

Question 204

Putative Domestic Partnership

Answer 204

A would-be domestic partner believes in good faith in the validity of their domestic partnership that later turns out to be invalid, the court may grant putative domestic partnership protections. All of the same rules apply. Same Sex marriage: All CP rules apply equally to same-sex and opposite sex marriages.

Question 205

Marvin Cohabitation

Answer 205

The Family Code does not govern the management, control, or distribution of property acquired by unmarried cohabitants. Their property issues are governed by general contract and property law.

Question 206

Nonmarried Cohabitant

Answer 206

For the purposes of distributing property at the end of a relationship, a nonmarried cohabitant is one of two adults who make a choice to share their lives with each other in an intimate and committed sexual relationship. A nonmarried cohabitant may or may not believe that they are married to the other cohabitant.
There is no requirement that a nonmarried cohabitant allege a long term relationship. However, evidence of such a relationship may corroborate allegations about expectations with respect to property issues that arose from the other cohabitant’s conduct.

Question 207

Express Ks between Unmarried Cohabitants

Answer 207

Express contracts between unmarried cohabitants are enforceable so long as they do not involve sexual services as consideration. Absent an express contract, the cohabitant’s conduct determines whether they had an implied or tacit understanding between them as to property matters.

Question 208

Consideration

Answer 208

A marvin agreement must be supported by consideration that is independent of their sexual relationship (meretricious consideration). A gratuitous promise, without consideration, is not legally enforceable. Lack of consideration is an affirmative defense to a Marvin contract.
Consideration examples: sweat equity or homemaking services; divorcing a current spouse; chauffeur, bodyguard, social and business secretary, partner, counselor in real estate investments; constant companion; confidant; traveling and social companion and lover
Not consideration: lover, companion, homemaker, traveling companion, housekeeper and cook.

Question 209

Civil Action - Breach of K (enforcing Marvin)

Answer 209

Civil Action - Breach of Contract: During a breakup, a marvin breach of contract is filed as a civil action not in family court. The parties litigate their claims without the aid of the general and specific presumptions that assist spouses and domestic partners. While the housekeeper’s contribution need not be established in the context of the CP system, in the Marvin context, the housekeeper’s contribution must be established by actual proof.

Question 210

Contract Obligations Survive Subsequent Marriage

Answer 210

Marvin contract obligations survive the subsequent marriage of the original nonmarital cohabitants to each other or third parties.

Question 211

Burden of Proof

Answer 211

Clear and convincing

Question 212

SOL

Answer 212

Written K = 4 years, Oral/ Implied = 2 years

Question 213

Remedies for breach

Answer 213

Remedies for a Marvin Breach of Contract includes traditional contract remedies, constructive trust used to demand return of property wrongfully detained or palimony, ongoing post-breakup financial support