Community Property Flashcards
CP Intro Paragraph
CA is a CP state. In a CP state, the marital economic community begins upon marriage and ends at divorce, death of a spouse, or permanent physical separation with an intent not to resume the marital relationship. Property, earnings, or debt acquired during marriage are presumed to be CP. Property acquired by either spouse before marriage; by gift or inheritance during marriage; or after divorce or a permanent separation is presumed to be separate property. Finally, 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 is called quasi-community property.
Requirements for valid marriage
Legal capacity + consent + formalities.
- Capacity = 18 years (or younger with court order + written consent of parent)
Void Marriage
Incest, bigamy, not lawfully contracted
Voidable Marriage
One party under 18, prior existing marriage, unsound mind, consent obtained by force or fraud
Putative Marriage
At least one spouse had good faith belief of valid marriage. All property is Quasi-Marital Property (QMP)
Pre-Nup Requirements
- Writing
- Signed by both parties
- Both parties represented by independent counsel
- Not unconscionable
Exceptions: Oral agreements may be enforceable if promise fully executed by promisor OR promisee detrimentally relied on agreement.
Transmutations
Must be in writing by express declaration of adversely affected spouse, EXCEPT:
* Gifts (1) not substantial in value (2) used solely or principally by the receiving spouse
General Presumptions - Standard and Content
Standard - Must be rebutted by preponderance of the evidence
CP - All wages and property acquired during marriage is CP. Can be rebutted by (1) written evidence that gift was intended (transmutation), (2) purchase funds traced to SP source, (3) agreements designating property as SP
SP - Applies to pre-marital property, inheritance and gifts from family during marriage, or property acquired after death/divorce/physical separation.
Special Presumptions - Standard and Content
Standard - Must be rebutted by clear and convincing evidence
Presumption of Title - Title reflects ownership interests of spouses. Jointly held property is CP. Title in one spouse’s name (or no title) is SP if purchased with SP funds.
Commingled Bank Account
Presumptively CP, but SP can trace funds in bank account when characterizing purchases.
Tracing Bank Accounts - Two Types
Direct Tracing - When the bank account contained sufficient SP funds at the time of purchase, and the purchaser intended to use SP funds.
Indirect tracing - When family expenses exhausted the CP funds in the account, leaving only SP for the purchase.
Who owns goodwill of CP business? How to valuate?
Treated like CP. Valuation by expert testimony or by comparing the business’s success to similar other businesses.
CP Reimbursement for Educational Degrees
- Only for tuition, fees, and books (not living expenses)
- No reimbursement if (1) degree substantially benefited community for >10 years after; (2) other spouse also earned degree, (3) education reduced need for spousal support.
- No right to percentage of enhanced earning potential.
Retirement Pensions
Treated as CP. Divide years spouse was employed during marriage by total years participating in retirement plan.
- Can cash out using actuarial evaluation on wait for division in kind.
- Spouse can demand benefits if other spouse refuses to retire.
- No advances on federal retirement benefits.
Stock options
If replacing earnings during marriage, CP. If replacing later or earlier earnings, SP.
* Divide years spouse employed during marriage by total number of years before stock can be exercised.
