Community Property Flashcards
Intro Paragraph
California is a community property state. All property, earnings, or debt obtained during the marriage are presumed community property. Property acquired before marraige or after separation, or at any time by gift or inheritance is presumed to be separate property
Marital economic community
begins upon marriage and ends at divorce, death of a a spouse, or separation.
Quasi community property
QCP is property acquired by a married couple while living in a non CP state that would have been characterized as CP if the couple had been living in CA at the time of acquisition. Quasi community property is treated as CP at death or divorce.
Valid marriage
[CCC]
a valid marriage requires consent, capacity, and compliance with legal formalities
Common law marriages are not recognized in california uness they were valid elsewhere when entered
Registered Domestic Partners
a domestic partnership is treated under cp rules if there are two people who could otherwise be married and share an intimate and committed relationship. Must be registered.
Putative spouse
a putative spouse is one who believed in good faith that a void or voidable marriage was valid. property acquired before notice of the invalid marriage is treated as quasi marital property.
a putative spouse ahs the same rights as a surviving spouse, and if there is a putative and a legal spouse, the estate is split equally
Void marriage
never legally existed due to incest, bigamy, or not lawfully made
Voidable marraige
can be annulled due to underage, unsound mind, fraud, duress, bigamy based on error about death
Unmarried cohabitants
CP does not apply, distribution of proerty coverned by contract principles, contracts enforced unless based upon sexual services
Special presumption of title
at death the form of title is the presumptive form of ownership
Special presupmtion of community property
jointly held property is presumed to be CP, rebuttable with written evidence
contributions of SP to CP
before 1984, contriubtion of SP to CP is presumed to be a gift
after, there is a** right to reimbursement**
Community proeprty with right of survivorship
treated as CP at divrose but treated light a joint tenancy at death, with an automatic transfer to surviving spouse to avoid probate
Tenancy in Common
at divorce, treated like CP per the special presumption of CP but at death, per the special presumption of title, treated like tenancy in common
Pre martial agreement
must satisfy SOF and signed by both parties
can determien property rights and spousal supports but NOT child support
Presumption of involuntariness
a premarital agreement is presumed to be involuntary unless
1) independent counsel or signed waiver at least 7 days before signing
2) party had 7 days to seek counsel before signing
3) if not represented, party was fully informed
4) both parties had capacity
5) agreement not signed under duress, fraud, undue influence
[I’s FC’D]
Unconscionable Martial Agreement
lack of fair, reasoanble, and full disclosure of assets and obligations, disclosure not waived in writing, and could not have reasonably had knowledge of the assets and obligations
Transmutation
trasmuting CP to SP or vice verse must be in writing with an express declaration by the adversely affected spouse, except for the gifts exception
Gifts exception
a personal gift of insubstantial value does not require a writing to be a valid transumtation
Separation agreements
spouses cannot alter marital status but can settle property rights, custody, and spousal support
Rebutting Presumptions
general presumptions such as the general CP and SP presumptions can be rebutted by preponderance of the evidence.
Special presumptions, like the special presumption of title or the special presumption of CP require clear and convincing evidence
bank account
how a bank account is titled does not determine the character of the funds.
If commingled funds, presumped that CP funds withdrawn first
Direct tracing
to show that SP funds were used, spouse must show that SP funds were available at the time and that they intended to use SP funds
Exhaustion Tracing
to show SP, must show that CP funds in account were exhausted by family expenses at the time of the purchase.
Goodwill of business
the reputation and future earnings of a CP business is a CP asset. Valuation is calculated through market sales or comparing past excess earnings to peer businesses
Degrees and professional licenses
not a CP asset
reimbursement: community may be reimbursed for CP contriubtions to direct or training expenses if earning capacity was substnailly improved
defenses: community substantially benefited (presumed if more than 10 years) other spouse also received an education, or reduced need for spousal support
Retirement pensions
vested and unvested pensions are treated as CP. if spoues is no eligible upon divorce, the portion attributable to CPmust be calculated
Calculation for retirement
time rule: allocaiton depends on number of years married v unmarried
diirect contriubtions: how much was contributed while married v unmarried
Distribution methods for retirement
division in kind: court reserves jdx to supervise payment upon retirement
cash out: value is determined by ane xpert and cashed out upon divorce
timing of retirement
early retirement: any enhanced benefit is CP property
delayed: if a spoues refuses to retire once eligible, other spouse must be paid division in kind
Stock options
CP if granted and vest during marriage
CP/SP if granted during marraige but vest after separation, determined based on whether stockw as a reward for past service or incentive for future
Hug formula
compensation for past service
CP= (Date of hire- date of separation)/ (date of hire - date of vesting) * number of sharees
Nelson formula
incentive for future employment
CP= (Date of grant - date of separation)/ (date of grant - date of vesting) * shares
Disability pay
pay that replaces compensation or retirment is CP
pay that replaces lost future earnings may be SP depending on timin gof separation
Term life insurance
At death, the last premuim paid determines the characterization
Separate property business
courts have discretion to calculate the CP share in a SP business based upon the contribution of labor by the employee spouse.
Pereira Formula
favors CP, use if spouse’s effort was the cause of the increase of business
SP=value at marriage +(value at marraige * 10% * years of marriage)
CP=FMV-SP
Van CAmp
favors SP, use if market forces primarily affected value of business
CP=(reasonable value of services - annual family expenses) * years of marriage
Reverse Pereira and Van camp
if the business appareciates after separation but before divorce, contribution is calculated by applying the formulas in reverse
Credit purchases and loan proceeds
presumed to be CP when the lender does not rely solely on purchaser’s SP in extending credit
SP used to improve SP
must be reimbursed
SP used to improve CP
must be reimbursed
CP used to improve spouses own SP
community has right to reimbursement or the enhanced value of the propery
CP used to enhance other spouses SP
community has the right to reimbursement; if it enhanced value, community is entitled to proportionate interest
Personal injury recovery
injury before marriage: tort recovery is SP, but must reimburse if CP is used to pay injury expenses
injury during marriage: recovery is CP, but at divroce, awarded to spouse
Liability
community is liable for debts of either spouse before or during marriage
a spouse is liable for her own debts incurred before or during marraige, or other spouses debt incurred for neccessaries of life, but not liable for the other spouse’s premartial debts
Tort obligations: if committed for benefit of community, paid first from CP then tortfeasors SP, but if not for benefit of community, paid first from tortfeasors SP then CP.
Managment and Control
each spouse has equal management and control over CP
exceptions: bank accounts limited to party named
Gifts to third parties
a gift of CP requires the written consent of both spouses. An unauthorized gift can be either ratified or revoked by the non consenting spoues
Household goods
a spouse may not sell, convey, enumber household furnishings or clothing without written consent of other spouse
Community businesss
the managing spoues has primary control, but must give prior written notive for major actions
Real property management
each party has equal management and ctonrol
any transfer must be in writing and signed by both spouses
title in one name: transaction is presumed valid if bona finde purchaser did not know seller was married; may not void beyond a year but may seek an accounting to recover value
title in both: both spouses must sign
Quasi Community property management
the record owner has exclusive management and control and right to transfer it
transfer to third party: if the record owner retained rights or interests when transfering to a third party as an unauthorized inter vivos gift, AND dies** domiciled** in CA, the non consenting spouse may recover up to one half the value
Fiduciary duty
spouses have the highest duty of good faith in management and control of CP, including the duty to disclose, to account, and to obtain consent
REmedies include injunctions right to an accounting, or getting a greater share of the CP
Community property mortgage payments on SP
the community acquires an interest in the property to the extent that mortgage payments are made tot he principal
Division on divorce
absent agreement, CP and QCP will be divided equally
exceptions: dbreach of fiduciary duties, tort liability, personal injury damages, debts
Division at Death
intestate: suriving spouse receives all CP, and separate property gets 100% (no descendants or parent/sibling), 50% (one parent/sibling/child) or 1/3 (more than one child)
testate:
only the decedants half of CP is subject to disposition by will, but joint tenancy properties go automatically to the spouse
