Community Property

Question 1

Separate Property (4)

Answer 1

(1) Property owned by either spouse before marriage
(2) Property acquired during marriage by gift, will, or inheritance
(3) Property acquired during marriage with the expenditure of separate funds
(4) Rents, issue, and profits derived from separate property

Question 2

Community Property

Answer 2

Property, other than separate property, acquired by either spouse during marriage

Question 3

Community Presumption

Answer 3

All assets acquired during the marriage are presumptively community property

Question 4

Domestic partnerships

Answer 4

Count for community property as of 2004, retroactive to 2000

Question 5

Termination of economic community (2)

Answer 5

(1) permanent, physical separation AND

2) intent not to resume marital relations (1 party’s intent sufficient

Question 6

CP on divorce

Answer 6

Each asset divided equally except:

(1) economic circumstances exception
(2) one spouse misappropriated
(3) one spouse has educational debts
(4) one spouse has tort liability based on action not taken for benefit of community
(5) personal injury award unless unjust
(6) negative community –> liabilities exceed assets –> relative ability to pay debt taken into account

Question 7

Gifts of CP

Answer 7

Requires written consent of both spouses

Question 8

Election to take under will

Answer 8

Where will violates CP principles, surviving spouse can elect to take under will or elect half share (can’t mix and match)

Question 9

Credit rules

Answer 9

Funds borrowed during marriage presumptively community credit but look to primary intent of lender –> if based solely on SP, then separate credit

Question 10

Fiduciary duties related rules

Answer 10

(1) presumption of undue influence: if one spouse gains an advantage from a transaction, presumption arises and spouse must show she did not breach FD
(2) a grossly negligent and reckless investment of community funds is breach of FD.

Question 11

Transmutation

Answer 11

Change in character of property from SP to CP and vice versa. Oral okay pre 1985. Post-1985, must be in writing, signed by adversely impacted spouse and explicitly state change in ownership

Question 12

Premarital agreements

Answer 12

Must be in writing and signed by both parties. Oral agreements invalid unless (1) oral agreement executed or (2) estoppel based on detrimental reliance

Question 13

Defenses to premarital agreements (2)

Answer 13

(1) voluntariness: agmt not voluntary unless challenging party (a) represented by independent legal counse; (b) given at least 7 days to sign; and (c) if no counsel, fully informed in writing of terms and basic effect (w/ document declaring receipt of this information and who provided it)
(2) Unconscionability

Question 14

Lucas rule

Answer 14

Property obtained during marriage with SP, or improvements made with SP, is CP absent proof of agreement otherwise

Question 15

Anti-Lucas statutes

Answer 15

APPLIES IN DIVORCE OR SEPARATION ONLY

(1) Ownership: requires express agreement or inclusion in deed that property is SP
(2) Reimbursement: contributions of SP for down payment, improvements, or principal payments on mortgage entitled to reimbursement.

Question 16

Proration rule

Answer 16

Applies to principal debt reduction and whole term life insurance (divide CP-attributable payments from overall loan/payments)

BUT term life insurance determined by last premium

Question 17

Community funds used to improve SP

Answer 17

Doesn’t apply to fixtures, but Court’s are split on whether addition of more substantial amenities are gifts or entitled to reimbursement

Question 18

Rebutting presumption of CP with commingled bank accounts (2)

Answer 18

(1) Exhaustion method: show that all CP in account was exhausted so SP must have been used for given purchase
(2) Direct tracing method: sufficient separate funds available and intent to use SP to buy asset

Question 19

Pereira test

Answer 19

Applied when spouse expends personal skills and effort. Pay interest (10% annum) on SP and then remainder is CP

Question 20

Van Camp test

Answer 20

Applied when business is inherently valuable (little impact to personal contributions). Value community labor (market wages MINUS family expenses paid from community funds) and then the rest is SP

Question 21

Employee retirement benefits

Answer 21

All benefits accumulated during marriage, irregardless of vesting, is CP. (Use proration rule – years service while married / total years employed to retirement)

Question 22

Disability and workers comp

Answer 22

Treated as wage replacement, so status determined by when received, not when earned

Question 23

Marriage of Hug formula

Answer 23

If stock options are a form of deferred compensation, divide years employment to date economic community ended by the years employment to date option became exercisable

Question 24

Marriage of Nelson formula

Answer 24

If stock options are primarily a way to get spouse to stay at company, divide years from date options are granted to date economic community ends by years from date options are granted to date options became exercisable

Question 25

Goodwill

Answer 25

Is CP and subject to division

Question 26

Educational expenses

Answer 26

Contributing spouse entitled to reimbursement for cost of education if the education enhanced earning capacity BUT not if (1) community has already benefited from the earnings of the educated spouse (10 or more years) or (2) other spouse also received CP-funded education

Question 27

Quasi Community Property

Answer 27

Property acquired while the couple was domiciled in a non-community property state, which would have been classified as community property had it been acquired under the same circumstances in California, is quasi community property. Treated the same as true community property on divorce

Question 28

Putative spouse

Answer 28

When someone has the subjective belief she is lawfully married, assets are called quasi-marital property