Community Property Flashcards
When does the marital economic community (MEC) begin and end?
Begins: Upon marriage.
Ends: At death, divorce, or permanent separation.
What is community property (CP)?
All property, earnings, and debts acquired during marriage unless an exception applies.
What is separate property (SP)?
Property acquired before marriage.
Property acquired during marriage by gift, bequest, devise.
Property acquired after separation or divorce.
What is quasi-community property (QCP)?
Property acquired while living in a non-CP state that would have been CP if acquired in CA.
Treated as CP upon divorce or death.
What is quasi-marital property (QMP)?
Property acquired by a putative spouse during a putative marriage.
Treated as CP upon request of the putative spouse.
What is a putative spouse, and what rights do they have?
A person with a good-faith belief in a valid marriage.
Rights: QMP treated as CP until they discover the marriage is invalid.
Are common law marriages recognized in California?
No, unless validly contracted in another state.
What happens to CP upon dissolution of a domestic partnership?
Same rules as divorce.
CP divided equally.
What is required for a valid premarital agreement?
Must be in writing and signed by both parties.
No consideration required.
What defenses exist against enforcement of a premarital agreement?
SOF
Involuntary execution presumed unless:
- Independent counsel or waiver 7 days before signing
- 7 days to seek counsel before signing
- If unrepresented, fully informed of terms and proficient in language
- Both parties had capacity
- No duress, fraud, or undue influence
- Any other factors that the court deems relevant.
Unconscionability at execution, with lack of full disclosure of assets and obligations.
How are transmutations (changes in character of property) handled after 1985?
Must be in writing, expressly declaring intent to change ownership by adversely affected spouse.
Extrinsic evidence NOT considered.
Exception: Gifts of personal property between spouses (not substantial in value).
What are the general presumptions for characterizing property?
CP is presumed if acquired during marriage.
SP is presumed if acquired before marriage, by gift, inheritance, or after separation.
How is commingled property (CP and SP mixed) analyzed?
Burden on spouse claiming SP to trace funds.
Methods:
- Direct tracing (SP funds available and intended to be used)
- Exhaustion method (CP used first for family expenses).
How is a business started during marriage characterized?
CP unless proven SP by tracing.
How are personal injury awards characterized?
CP if injury occurred during marriage.
SP if injury occurred before marriage or after separation.
Upon divorce, awarded to injured spouse unless justice requires otherwise.
How are retirement benefits divided at divorce?
“Time rule” applies: CP share = years worked during marriage ÷ total years in plan.
What formulas apply to businesses started before marriage?
Pereira Formula (for spouse’s labor and skill): CP = SP value at marriage + (SP value × 10% × years married).
Van Camp Formula (for business character itself): CP = (reasonable salary – family expenses) × years married.
What happens to educational degrees earned during marriage?
Not CP.
But CP is reimbursed for education costs if it increased earning capacity.
How are stock options characterized?
Hug Formula (reward for past service): CP = (DOH – DOS) ÷ (DOH – DOV) × shares.
Nelson Formula (incentive for future service): CP = (DOG – DOS) ÷ (DOG – DOV) × shares.
How is debt incurred before marriage treated?
MEC is generally liable for debts incurred by either spouse before or during marriage.
However, CP earnings are not liable for debt incurred by spouse before marriage if earnings kept in account that spouse cannot access.
Otherwise, SP debt of the spouse who incurred it.
How is debt incurred during marriage treated?
CP is liable for debts of either spouse.
SP is only liable for debts of that spouse (that are not for the benefit of the community).
When is the community estate liable for torts?
If tort occurred for community benefit, CP is liable first.
If not, SP of the tortfeasor is liable first.
How are child and spousal support obligations from a prior relationship treated?
Treated like debt incurred before marriage.
Community liable unless non-debtor spouse shields earnings.
How much control does each spouse have over CP?
Equal management and control, but limitations exist (e.g. spouse with management/control over community business).
What restrictions exist on gifts of CP to third parties?
Requires written consent of both spouses.
Non-consenting spouse can revoke or recover ½.
What is the general rule for division of CP at divorce?
Equal division of CP and QCP.
SP remains with the spouse who owns it.
What are the exceptions to equal division of CP?
- Deliberate misappropriation of CP by a spouse.
- Personal injury damages (assigned to injured spouse unless justice requires; at least ½ to the injured spouse).
- Community debt exceeds assets (equitable division by court).
- Debts for education loans (go to spouse who got education)
- Pets
- Liability for torts (goes to tortfeasor)
- Civil judgments for DV
How are CP contributions to SP property handled at divorce?
CP gets reimbursement or proportional share of appreciation.
What happens to CP at death if no will exists?
Surviving spouse gets 100% of CP.
What happens to SP at death if no will exists?
Surviving spouse gets:
All SP if no heirs.
½ of SP if one heir.
⅓ of SP if two or more heirs.
How does the “Surviving Spouse Election” work?
If a spouse tries to pass more than their ½ CP share in a will, the surviving spouse must elect to:
- Take under the will.
- Assert CP rights instead.
What is the ‘Married Woman’s Special Presumption’?
Before 1/1/1975: Property titled in the wife’s name alone is presumptively her SP.
What is the effect of a jointly titled property at divorce?
Presumed CP unless a writing states otherwise.
