Community Property Flashcards
What is the Community Property Presumption?
California is a community property state, all property acquired during marriage is presumed to be community property unless proven otherwise by clear and convincing evidence.
What is Separate Property?
Property acquired before marriage, after separation, or by gift, inheritance, or bequest during marriage is considered separate property.
What are the Requirements for Transmutation?
To change the characterization of property from separate to community or vice versa, a written agreement signed by the adversely affected party is required, explicitly stating the intent to transmute.
What are the Fiduciary Duties Between Spouses?
Spouses owe each other the highest duty of good faith and fair dealing, including full disclosure of all material facts regarding community property and debts.
Can a spouse encumber or dispose of community property on their own?
A spouse cannot unilaterally encumber or dispose of community real property without the written consent of the other spouse; violations may result in remedies for the aggrieved spouse.
How is Debt Characterized in Marriage?
Loans incurred during marriage are presumed to be community debt unless the lender relied solely on one spouse’s separate property for the loan.
How is Property Characterized?
The characterization of property is determined by the source of funds used to acquire it. Community funds create community property, while separate funds create separate property.
Do commingled assets change their character ?
Commingled assets retain their separate property character if the separate property can be traced to its source.
How are Separate Earnings Treated Post-Separation?
Earnings acquired after the date of permanent separation are considered the separate property of the earning spouse.
What is the Joint Title Presumption?
Property acquired during marriage and held in joint title is presumed to be community property unless there is evidence of a contrary agreement.
Can the community seek reimbursements from separate property?
If community funds are used to improve or pay for separate property, the community may have a right to reimbursement.
How are Investment Earnings Characterized?
Investments made with community funds are community property; investments made with separate funds are separate property unless commingling occurs.
What type of property are increases in separate property value?
Increases in the value of separate property during marriage are separate property unless the increase is attributable to community efforts or assets.
What is the Pereira Method of Allocation for Community Effort?
Under the Pereira method, a fair return on separate property is allocated as separate property, and any excess value is allocated to the community if due to community effort.
What is the Van Camp Method of Allocation for Separate Effort?
Under the Van Camp method, reasonable compensation for a spouse’s community effort is allocated to the community, and the remaining value is separate property if due to the property’s inherent qualities.
How is Inheritance Treated During Marriage?
Property inherited by one spouse during marriage remains separate property unless transmuted or commingled beyond tracing.
What is the Date of Separation and Its Significance?
The date of separation is the date the parties decide not to rekindle the relationship and end the MEC. Earnings and property acquired after the date of separation are separate property.
How is Business Goodwill Valued in Community Property?
The goodwill of a business may be allocated as community property to the extent it is derived from the efforts of the spouse during the marriage.
Who Bears the Burden of Proof for Property Characterization?
The party claiming a property’s separate or community nature bears the burden of proof to establish its character.
What is the Exhaustion Method for Tracing?
Separate property can be traced in commingled accounts by showing that community funds were exhausted at the time of purchase.
What is the Direct Tracing Method?
A separate property proponent may trace funds by showing that separate property funds were available and intended to be used for the purchase.
How are Disability Insurance Payments Characterized?
Disability insurance payments are community property to the extent they replace earnings lost during marriage and separate property to the extent they replace earnings lost after separation.
What is the Duty of Disclosure Between Spouses?
Spouses owe fiduciary duties of full disclosure of all material facts regarding assets and liabilities.
How are Gambling Winnings Characterized?
Gambling winnings during marriage are presumed community property unless earned or acquired after separation.
How are Investment Accounts Characterized?
An investment account funded with community property retains its community property character unless transmuted or acquired after separation.
What are the Rules for Post-Separation Debts?
Debts incurred after separation are assigned to the incurring spouse unless for the benefit of the community.
How is Community Debt Liability Determined?
Debts incurred during marriage are community liabilities, but debts incurred for personal purposes after separation are separate.
What is the Right of Reimbursement?
A spouse may seek reimbursement for separate property contributions to community property unless waived or otherwise agreed upon.
What is the Duty to Avoid Waste? (Community Property)
A spouse has a duty not to waste community assets and may be liable for reimbursement for improper use of community funds.
When is Community Property Liable for Debts?
Community property is liable for debts incurred during the marriage, including tort debts, unless the marital economic community has ended.
When Does the Marital Economic Community End?
The marital economic community ends upon permanent physical separation with intent not to resume the marital relationship.
How are Tort Debts Satisfied?
A tort debt not incurred for the benefit of the community is satisfied first from the tortfeasor’s separate property and then from community property.
Is the Non-Tortfeasor Spouse’s Separate Property Liable for Debts?
A non-tortfeasor spouse’s separate property is not liable for the tortfeasor spouse’s debt.
What Remedies Exist for Unauthorized Encumbrance?
A non-consenting spouse may void an unauthorized encumbrance on community property within one year.
What are the Rules for Post-Separation Debt?
Post-separation debts are considered separate debts unless incurred for necessaries of life before divorce.
Are Post-Separation Legal Fees Community Debts?
Legal fees incurred post-separation are the separate debt of the spouse incurring them
How are Gifts Between Spouses Treated?
A gift from one spouse to the other remains the recipient spouse’s separate property unless explicitly intended otherwise.
How are Personal Injury Settlements Characterized?
Compensation for personal injury is the injured spouse’s separate property if the cause of action arose after separation; if during marriage, it is community property unless awarded otherwise.
How are Stock Options Characterized?
Options earned due to employment during marriage are community property; post-separation portions may be apportioned using the time rule.
How are Child Support Obligations Handled?
Child support obligations incurred before or during marriage are the separate responsibility of the obligor spouse. If community funds are used to pay the obligation, reimbursement may be required unless the obligor spouse’s separate property at the time was insufficient to satisfy the obligation.
How is Community Property Divided Upon Divorce?
Community property is divided equally upon divorce unless agreed otherwise or exceptions apply.
How are Personal Injury Settlements Treated in Divorce?
Personal injury settlement funds are community property if the injury occurred during marriage but are typically awarded to the injured spouse upon dissolution.
Who Has Management and Control Over Community Property?
Each spouse has equal management and control of community property during marriage but must act in good faith.
How Does Community Effort Affect Separate Property?
When community efforts or funds enhance the value of separate property, the community may have a pro-rata interest in the enhanced value.
How Does Commingling Affect Separate Bank Accounts?
Depositing community funds into a separate bank account does not change its community property character unless explicitly agreed otherwise.
Who is Liable for Debt During Marriage?
Community property is liable for debts incurred by either spouse during marriage, including medical bills.
Is a Spouse’s Separate Property Liable for the Other’s Debts?
A spouse’s separate property is not liable for the other spouse’s debts unless a community property obligation exists.
What is Quasi-Community Property?
Property acquired in a non-community property state that would have been community property if acquired in California is quasi-community property, treated as separate property during marriage but as community property upon death or divorce.
What is an Illusory Transfer of Quasi-Community Property?
A transfer is illusory if the decedent retained control over the property without the other spouse’s consent, allowing the non-transferring spouse to reclaim an interest upon death.
How are Personal Injury Settlements Characterized?
Compensation for personal injury is considered community property if the injury occurred during the marriage but may be awarded to the injured spouse upon dissolution.
How Are Investment Earnings Characterized?
Investments made with community funds are community property, while investments made with separate funds remain separate unless commingled.
What is the Clawback Rule?
Under California law, an acquiring spouse cannot make a gift of QCP without the other spouse’s consent if the transfer is for less than fair value and the acquiring spouse retains a beneficial interest (e.g., survivorship rights).
