Community Property Flashcards
Intro to CP
- California is CP state.
- Premise is earnings from the labors of each spouse during the marriage contribute equally to the accumulation of wealth and debt, which are owned equally by both spouses.
- CP system applies automatically to married couples (+ Dom Partners) domiciled in California, unless the couple makes valid agreement to contrary.
Marriage
Valid:
- consensual civil contract
- between two people followed by
- performance of formal legal procedures (license, solemnization, and authentication).
If under 18, need court order and parental consent
(other jx marriage recognized)
Domestic partnership
- Same rights and protections.
- Two parties with capacity to marry with an intimate and committed relationship of mutual caring
AND
registered under California Domestic Partner Rights and Responsibilities Act.
(other jx dom partnership recognized)
Marital economic community
The marital economic community (or DP economic community) begins at the date of marriage/reg. and ends upon permanent separation, dissolution or the death of one spouse.
Permanent separation occurs when there is a complete and final break in the marital relationship where (1) one spouse has communicated to the other intent to end marriage, and (2) the spouse’s conduct is consistent with his intent.
Putative Spouse / DP
A putative spouse:
- not legally married bc
- marriage is void or voidable
- GF belief legally married
- Estoppel may apply if knew not vaid
Premarital Agreement
made before marriage; parties agree to the characterization of their property and may limit support obligations.
Requirements:
(1) Not promote divorce
(2) In writing and signed by both
(3) Deemed involuntary unless
— Independent counsel at signing or advised & waived it in a separate writing;
— K and advised 7 days before signing;
— If unrepresented, informed in writing of terms/rights in proficient language (+declares got info from X);
— No duress, fraud, undue influence, and did not lack capacity; and
— Any other factors the court deems relevant.
(4) Not unconscionable AND lacking full disclosure
— Not Unconscionable at execution; and
— No adequate knowledge of wealth of the other party or didn’t waive right to disclosure in writing
[waiver rules other card]
DEFENSES
- Equitable defenses: laches (unreasonable delay and prejudicial effect) and estoppel (detrimental reliance) are available to either party.
Child support and spousal support in premarital agreement - waivable?
Child support cannot be waived by a premarital agreement.
Spousal support can’t be waived without independent counsel at signing AND cannot be unconscionable at the time of dissolution.
General Presumption
All property acquired by married persons while domiciled in California is characterized as community property or separate property. The original characterization is based on the source of funds and the timing of the acquisition.
CP
during marriage by labor
(The earnings of each spouse and all property acquired during marriage by the labor of either spouse while domiciled in California is presumptively community property)
SP
before or after marriage; by gift, devise, inheritance; bought with SP
(All property acquired before marriage or after permanent separation or after divorce is presumptively separate property. In addition, property acquired by gift, bequest, devise, or descent; and the rents, issues, and profits derived from separate property; and property acquired with separate property funds is also presumptively separate property.)
QCP
was domiciled elsewhere but would be CP if in Cal
(QCP is all property, real or personal, wherever situated, acquired by either spouse while domiciled in a non-CP state, which would have been classified as CP had the parties been domiciled in California at the time of acquisition.)
QMP
Putative spouses - treated like CP
(Quasi-marital property is property acquired during a void or voidable marriage, which would have been CP or QCP if the marriage had not been void or voidable. The property of a putative spouse is classified as QMP. QMP is treated the same as CP or QCP.)
Special CP Presumption
As of 1987 (anti Lucas), at divorce or legal separation (not death!) all jointly titled property of the spouses is presumed to be CP, unless there is an express agreement to the contrary.
There is a Right to reimbursement for SP contributions (but not increase in value) for DIP - Downpayment, payment for Improvement, and Principal of a loan.
Form of title
Used to rebut presumption if inconsistent.
Source SP, but title in CP
- CP unless contrary written intent
- reimbursement allowed at divorce
Source CP, but title in SP
- still CP - unless written transmutation (except gift)
Special Community Property Presumption
Anti-Lucas (post-1987): at divorce, jointly held title presumed CP unless written agreement
- reimbursement for Down payment, Improvements, Principal
Before 1984 (Lucas): at divorce, joint title presumed CP unless agreement. No right to reimbursement for SP unless K. oral/implied agreement ok.
Special presumption of title at death
Title presumed to be ownership interest
- If one spouse or none on title, property may be SP if source was SP
- Can be rebutted by C&C evidence
Married Woman’s Special Presumption
W’s name alone in writing, prior to 1975 = W’s SP
Tracing methods
Exhaustion method: all CP funds exhausted when property purchased
Direct tracing: sufficient SP funds; intent to use SP funds
Tracing can’t overcome joint title presumption (except bank accounts)
Transmutation
K during marriage to change ownership characterization
Required (1985):
- Writing
- Describe change in ownership
- Consent of adversely affect spouse
Exception
- gifts of insubstantial nature
- no other exceptions for writing requirement (eg can’t use will)
Pre-1985, could be oral or inferred from conduct
Fiduciary duties
Full disclosure of material facts
Good faith and fair dealing
Management of CP
Equal power to manage
One person can’t gift or dispose for less than fair value
One spouse can’t sell/convey family furnishings without written consent
Mgmt of CP business
Managing spouse can make all decisions but give written notice to sell
Mgmt of CP real property
- Convey, sell, or lease of 1 year, both need to sign
- Can’t convey to 3d party w/o consent
…… presumed valid to BFP, but can be voided within a year.
……. non BFP - can be voided any time
Contribution CP to SP business
CP (funds or labor) to SP Businesses
- Pereira favors CP (labor)
- Van Camp favors SP (inherent value)
Pereira:
- SP = FMV of SP biz ATOM + (FMV of SP biz ATOM x 10% x # years married)
- CP = FMV of SP biz ATOD – SP
Van Camp
- CP = (reasonable value of spouse service – annual fam expense from biz earnings) x # years married
- SP = FMV ATOD – CP
* If spouse was undercompensated:
Van Camp CP value – salary received during marriage = amount owed to CP
