Community Property Flashcards
CP - Community Presumption and General Principles
California is a community property state. There is a community presumption, wherein all assets acquired during the marriage are presumptively community property. There are areas of separate property, including property owned by either spouse before the marriage; property acquired by gift, will or inheritance; property acquired during the marriage by expenditure of separate funds; and rents, issues and profits derived from separate property.
CP - Quasi-Marital
Putative spouse has an objectively reasonable and good faith belief that he is lawfully married. All property acquired during putative marriage is quasi-marital treated as community property on divorce
CP - Quasi-Community
Property acquired by one spouse that would have been community property if spouse had been domiciled in California or another community property state. Until divorce or death, treated like separate property. For purposes of creditors’ rights, treated as community property (even while married). If property acquired by both spouses in joint title in non-community property state, joint title rules apply.
- Divorce: Community
- Death of Acquiring Spouse: Community
- Death of Non-Acquiring Spouse: Separate
CP - Gifts of Community Property
Neither spouse can make a gift of community property without the other’s written consent. The non-gifting spouse can set the gift aside during marriage. On divorce, she takes equal offsetting community assets. On death, she sets aside the gift as to her half community property.
CP - Fiduciary Duty
Spouses owe a duty of the highest good faith and fair dealing to one another. If one spouse gains an advantage from a transaction, there’s a presumption of undue influence.
CP - Pensions, Stocks, Bonuses
Bonuses are treated as wages—those earned during marriage are presumptively community property. If earned partially during marriage, courts apply the pension time rule.
Community = (Years While Married/Years Earned Total) x (Value of Pension, etc.)
Cash Out: Spouse can get cashed out now with assets of equal value (total years while married over total years employed until divorce, times present value)
Wait-and-See: Spouse can wait and request funds if and when received
CP - Equal Management Power
- Spouses cannot gift community property without consent
- Spouses can sell or buy personal community property without consent
- Spouses can contract debt without consent
CP - Personal Injury Damages
- During Marriage: Community
- Before or After Marriage: Separate
- Divorce: Awarded to injured spouse
- Spouse Tortfeasor: Separate
CP - Business Valuation
- Developed During Marriage: Community
- Developed Before Marriage: Pereira or Van Camp
Pereira: Person Primary Cause
- SP = Val. @ Mar. + [(Val. @ Mar. x 10%) x Yrs Mar.]
- CP = Val. @ Div. – SP
Van Camp: Valuable Company
- CP = (Mark. Sal. x Yrs. Mar.) – Fam. Exp. Paid
- SP = Val. @ Div. – CP
Business Goodwill: Goodwill (total business value over total value of assets) during marriage is community property
CP - Education
Not CP, But Right of Reimbursement:
- CP Paid for Education or Loans
- Education Substantially Enhances Earning Capacity
Defenses:
- Community Already Substantially Benefitted
- Education Reduces Need for Spousal Support
- Other Spouse Received Community Funded Education
Presumption: Rebuttable Presumption of Substantial Benefit After 10 Years
CP - Prenuptial Agreements
- Generally: Consideration is not required, but they must be in writing, voluntary, and cannot be unconscionable.
- Voluntary: An agreement is voluntary where the spouse seeks independent counsel and has 7 days to read and sign. If no counsel, the spouse must be fully informed in writing of terms and effect, and no duress, fraud or undue influence.
- Child Support: The parties cannot limit contributions to child support.
CP - Transmutation
Generally: Transmutations must alter the character of the property (SP à CP)
Pre-1985: Can transmute orally, and intent can be inferred from conduct
Post-1985: Agreement must be in writing in the form of an express declaration, signed by adversely affected spouse. Must be in deed or separate declaration—taking in one spouse’s name is insufficient.
Anti-Lucas: Property taken in joint title is presumed CP at divorce, absent an express collateral agreement to the contrary. With death, there is a right of survivorship.
Reimbursements: SP contributions to CP (down payment, improvements, principal payments on mortgage) are reimbursed without interest or appreciation
CP - Moore-Marsden
When a spouse brings SP to marriage and makes payments on property with CP (e.g., wages), one applies Moore-Marsden to determine community interest.
CP = [(Principal Reduction @ Marriage)/(Purchase Price of Property)] * Value @ Divorce
CP - Reimbursements
SP to CP: Reimbursed without interest or appreciation
CP to Own SP: CP gets greater of reimbursement or amount by which improvements increase value of SP
CP to Other’s SP: Gift presumption and no reimbursement (majority)—but reimbursement in minority jx
CP - Commingled Bank Account
Generally: Recapitulation counting unavailable, so burden on commingler.
Exhaustion: No CP available, so purchase must have been made with SP
Tracing: Enough SP existed to make the purchase without community property, and intent to use SP
Family Expenses: Presumption that money spent from joint account for necessities were community funds
