Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Bar Prep Summer 2014 > Community Property > Flashcards

Community Property Flashcards

You may prefer our related Brainscape-certified flashcards:
MBE flashcards
1
Q

General CP Rules Statement

A

California is a community property state; absent an agreement to the contrary, all property acquired during marriage by the labor of either spouse is presumptively CP, unless acquired by gift or inheritance, in which case it is presumptively SP.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Overcoming CP Presumption

A

The CP presumption may be overcome by a showing of any of the following:

  1. Statutory facts: property acquired by gift, bequest, devise, etc.
  2. Parties agreed property would not be CP (transmutation)
  3. One spouse took title in a form that evidences a gift to the other spouse
  4. Purchase funds traced to an SP source
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Marital Economic Community

A

Marital economic community begins at marriage and ends at the death of one spouse, or when there is a permanent physical separation and an intent not to resume the relationship.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Personal Injury Recovery

A

If the cause of action arises during marriage, then any recovery received is CP; however, at divorce, the CP portion of damages will be awarded entirely to the injured spouse, unless the interests of justice require otherwise.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Pension Time Rule

A

Vested and unvested retirement pensions are CP tot he extent that the right to benefits was earned during marriage (doesn’t matter if distributed post-divorce).

Pro-ration applies: CP = (years service while married) / (total years employed)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Disability Pay and Workers Comp

A

To the extent that they are intended to replace marital earnings, they are treated as CP; to the extent intended to replace separate, post-divorce earnings, treated as SP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Severance Pay

A

Typically understood as replacing a worker’s earnings until able to find a new job; to the extent that they replace marital wages, severance pay is treated as SP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Stock Options - Marriage of Hug

A

If designed to compensate for past services:

CP = (Years employed to end of marriage) / (Years employed to date option exercisable)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Stock Options - Marriage of Nelson

A

If designed to encourage employee to stay with the company:

CP = (Years from date granted to end of marriage) / (Years from granting to exercisable)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Business Goodwill

A

To the extent that developed during marriage, treated as CP.

Evaluated by either a market sales valuation, or capitalization of past earnings.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Education and Training

A

Education and training acquired during marriage are not treated as CP; however, upon divorce there is an equitable right of reimbursement, with interest, when:

  1. Community funds used to pay for education or training, or repay a related loan, AND
  2. Education or training substantially enhances the earning capacity of the spouse
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Education and Training - Defenses to Reimbursement

A
  1. Community has already substantially benefitted from the education (presumption when 10 years have passed)
  2. Other spouse recieved a community funded education
  3. Need for spousal support is decreased as a result of education/training.

Loans outstanding at the time of divorce are assigned to the acquiring spouse.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Term Life Insurance

A

Pure insurance with no cash surrender value; character of the last premium paid controls

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Whole Life Insurance

A

Cash value; investment feature.

Pro-rata distribution between premiums paid with CP and those paid with SP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Premarital Agreements

A

Parties may avoid the CP presumption/system by premarital agreement.

Must be in writing, signed by both parties (to satisfy the S/F), unless: there was an oral agreement that was fully executed, and estoppel based on detrimental reliance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Premarital Agreements - Defenses to Enforcement

A
  1. Voluntariness: a premarital agreement is not voluntary, and is thus unenforceable, unless the following are satisfied:
    - Represented by independent legal counsel (or waived in a separate writing)
    - Given at least 7 days to sign
    - If not represented by counsel, fully informed in writing of the terms and effect of agreement
  2. Unconscionability: if, when made, there was:
    - No full and fair disclosure of the other party’s property or financial obligation,
    - Right to disclose was not waved in writing
    - Party had no knowledge of the other party’s circumstances
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Transmutation Agreements

A

Parties can agree to alter the character of property, so long as it is in a signed writing that explicitly states that a change in ownership is being made. A statement in a will is insufficient to constitute a transmutation agreement.

(Pre 1985: transmutation agreements could be oral, whether by express or implied agreement)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Exceptions to Writing Requirement of Transmutation Agreements

A

A transmutation agreement does not need to be in writing if it is a gift of personal property between spouses that is not substantial in nature, considering the financial context of the marriage.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Taking Title in Joint and Equal Form

A

If spouses take title in joint and equal form (title lists both spouses), there is a presumption that the property is CP for purposes of divorce.

JT: upon death, entire estate held as surviving spouse’s JT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

SP funds used on CP - Marriage of Lucas (Death)

A

Applies upon the death of one spouse.

When there have been SP contributions to CP: taking title in joint and equal form gives rise to a presumption that the property is CP, and absent an agreement that one spouse is to have an SP interest based on contributions, the spouse will be presumed to have made a gift.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

SP funds used on CP - Anti-Lucas (Divorce)

A

Applies upon divorce.

When there have been SP contributions to CP, the presumption that property taken in joint and equal form is CP can be rebutted by:

  1. Express statement in the deed or instrument that the property is SP, or
  2. Written agreement that the property, or a portion thereof, is SP

-Contributing spouse is entitled to reimbursement without interest for contributions made to down payments, improvements, or principal payments (DIP)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

CP Expenditures on SP

A

If used to improve SP of contributing spouse: does not change ownership characteristics; however, contributing spouse can bring an action for reimbursement for “feathering his own nest,” and will get the greater of CP expenditure or increase in value.

If used to improve SP of other spouse: generally, “feathering the other spouse’s nest” is considered a gift, and no right of reimbursement. However, many modern courts are trending away from no-reimbursement

23
Q

CP Payments to Reduce Debt of SP

A

Occurs when a spouse brings separate property into the marriage, and continues to make payments on the purchase price from CP earnings.

CP = (amount principal has been paid down) / (purchase price)

24
Q

Commingled Funds - Family Expense Presumption

A

It is presumed that expenditures for family expenses such as food, housing, and clothing were made with community funds, even though separate funds may have been available.

If family expenses paid with SP, there is a presumption of a gift to the community with no reimbursement intended, absent evidence of an agreement to the contrary.

25
Q

Tracing - Exhaustion

A

At the time the asset was purchased, community funds in the account had already been exhausted by payment of family expenses, and therefore the asset must have been purchased with SP funds

26
Q

Sufficient Funds (Direct Tracing)

A

Requires that sufficient separate funds were available, and that the spouse intended to use SP funds to buy the asset. If the balance never falls below the SP amount, then presumption that SP was never used because it was not “dipped into”

27
Q

No Recapitulative Accounting

A

The SP proponent may not simply show that the total family expenses exceeded the total community income, and thereby conclude that all remaining funds and assets were purchased from the commingled account and are SP

28
Q

Joint Bank Accounts

A

The contents of a joint bank account held by married persons are presumptively CP; however, presumption may be overcome by tracing to one spouse’s SP

29
Q

Acquisition of Funds on Credit

A

Funds borrowed during marriage and goods purchased on credit during marriage are presumptively CP.

If bank primarily considered the credit or standing of a spouse, the funds are CP; if bank primarily considered an SP asset of the spouse, then the funds are treated as SP.

30
Q

Pereira Accounting

A

(When there is a business before marriage, and increases in value during marriage)

-Use Pereira when personal skills and effort of one spouse are the major factors in growth; look for when the spouse contributed creative ideas or techniques, or worked long hours and only drew a modest salary.

SP = (value at marriage) + (years married x (10% interest x value at marriage))

31
Q

Van Camp Accounting

A

(When there is a business before marriage, and increases in value during marriage)

-Think valuable company or asset; use where capital investment was the major factor in the business’s growth, and the spouse’s skills and efforts were less important. Consider whether spouse was paid a substantial salary, which suggests community compensation.

CP = (market salary x years married) - (family expenses x years married)

32
Q

Distribution of Property at Divorce

A

The divorce court has the power to divide all CP and, at the request of either party, jointly titled SP. Each party must disclose assets and liabilities, under a continuing duty, until all property is distributed.

-Unless agreed otherwise, each spouse is entitled to a one-half interest in each community asset.

33
Q

Statutory Exceptions to Equal Distribution

A
  1. One spouse deliberately misappropriates CP
  2. Liabilities exceed assets
  3. Educational debts/loans
  4. One spouse has a tort liability, not based on activity for benefit of the community
  5. Separate debt incurred
  6. Community estate personal injury recovery (awarded entirely to the harmed spouse)
34
Q

Quasi-Marital Property

A

California does not recognize common law marriages entered into in California (but does recognize if validly contracted in another state); thus, property will be treated as QMP upon divorce.

35
Q

Putative Spouse

A

One who has an objectively reasonable, good faith belief that they were lawfully married.

All property acquired during a putative marriage is labeled as QMP.

36
Q

Unmarried Cohabitants

A

Cohabitants are persons who reside together in a marriage-like relationship, but are neither lawful nor putative spouses.

The court will enforce contracts between non-marital partners, so long as not founded explicitly on consideration of sexual services; if no express contract, court may prove an implied contract and recovery in quantum meruit.

-If cohabitants later marry, only the property acquired during marriage is CP

37
Q

Disposition by Testamentary Transfer

A

A married person may transfer 1/2 CP and all of his SP by will; the surviving spouse owns the other 1/2 CP.

-One spouse may not make an inter vivos gift of CP without the written consent of other spouse

38
Q

Widow’s Election

A

A testator may insert a clause in his will stating that his surviving spouse must either elect to take under the terms of the will, or assert her CP ownership rights. If there is no explicit clause, then spouse can assert both CP and SP rights

39
Q

Quasi-Community Propety

A

QCP is property acquired by either spouse that would have been CP had the spouse been domiciled in CA (or any other CP state) at the time of acquisition. Until death or divorce, QCP remains the SP of the acquiring spouse.

40
Q

QCP at Death

A

If the non-acquiring spouse dies first, the QCP remains the SP of the acquiring spouse.

If the acquiring spouse dies first, it is treated as QCP.

41
Q

Property Management Rights - SP

A

Each spouse has the exclusive management and control of his SP; QCP is treated as SP for the purposes of management and control,

Either spouse acting alone may buy, sell, or encumber their SP.

42
Q

Property Management Rights - CP

A

Each spouse has equal management and control of CP.

Real property transfers: both spouses must be joined in executing any instrument by which CP is sold, conveyed, or leased for more than one year.

-If spouse purports to sell or lease to a BFP, the non-consenting spouse has 1-year within which to void the transaction; no statute of limitations if subsequent purchaser knew that the spouse was married and did not obtain consent.

43
Q

Transfer of Personal Property During Marriage

A

The dwelling or household furnishings or clothing of a spouse or minor children are not transferrable without written consent of the other spouse.

Business exception: a spouse operating a business that is all or substantially all CP has a primary right (rather than sole right) to management and control of the interest; may act alone in all transactions, but must give prior, written notice to the other spouse before sale/lease/exchange. If no consent, spouse cannot void the transaction (different from sale of real property)

44
Q

Fiduciary Duties

A

Each spouse must act in the highest good faith and fair dealing with respect to the other spouse, in the management and control of the CP.

Deliberate dissipation or destruction of property is actionable, as is grossly negligent conduct; spouse has a duty to account for information concerning the CP.

Managing spouse must secure consent before making a disposition of CP.

45
Q

Breach of Duty by Managing Spouse

A

A managing spouse has a duty to secure consent of the non-managing spouse before making a gift of CP, encumbering, selling, or leasing property used in the family home, or community real property.

-The non-managing spouse has a cause of action against the managing spouse, if there is a breach of duty that results in a substantial impairment of the non-managing spouse’s interest (3 year SOL)

46
Q

Creditors Rights

A

Creditors rights follow management rights; a creditor spouse may reach any property over which the debtor spouse has the legal right of management and control.

47
Q

Types of Debts

A
  • Contract debts: incurred at the time the contract is made
  • Tort debts: at the time the tort occurs. If incurred for the benefit of the community, debt satisfied first from CP, then SP of debtor. If not for benefit of community: first from SP of debtor spouse, then from CP.
  • Spousal or child support from prior relationship: treated as debt incurred before marriage
48
Q

Debts Incurred Before Marriage

A

All the CP, and the debtor spouse’s SP, are liable for a debt incurred by the debtor spouse before marriage; the SP of the non-debtor spouse is never liable.

Child support exception: considered prior debt and payable from CP; however, if at the time of payment SP was available to pay the support, the community is entitled to reimbursement.

49
Q

Debts Incurred During Marriage

A

All CP and the debtor spouse’s SP are liable for debts incurred during marriage. SP of the non-debtor spouse is not liable.

-Court will typically assign debt at divorce, and property assigned to a non-debtor spouse at divorce is not liable for a debt, when the non-debtor spouse incurred no personal liability and debt was assigned to debtor spouse.

50
Q

Debts Incurred After Marriage

A

All CP, and the debtor’s SP, are liable for a debt incurred by the debtor spouse. However, even after spouses have permanently separated, unless they made a separation agreement, each spouse will remain personally liable for debts incurred for the “common necessities” of life.

(SP of the non-debtor spouse only liable if a debt for a necessity).

51
Q

Creditor’s Rights at Death

A

If property passes through probate, it must first be characterized as CP or SP, and then allocated accordingly.

If property does not pass through probate, the surviving spouse is personally liable for debts charged against the CP, QCP, and decedent’s SP that passes to the surviving spouse without administration

52
Q

Statutory Right of Reimbursement

A

One spouse may seek reimbursement against the other spouse in the following situations:

  1. CP is applied to satisfy child support or spousal support arising out of a prior marriage
  2. One spouse’s SP was applied to debts incurred by other spouse for necessities, and there was CP available to pay
  3. When order of satisfaction for tort debt is not followed
53
Q

Federal Preemption

A

When state CP law is inconsistent with federal law, the federal law prevails. Applies to:

  1. US Savings Bonds
  2. Copyrights
  3. ERISA benefits

Bar Prep Summer 2014 (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions