Community Property-SC

Question 1

Source - Community Property

Answer 1

Community Property is all property, real or personal, wherever situated, acquired by a married person during marriage.

Question 2

Source - Separate Property

Answer 2

Separate Property is all property owned before marriage and that acquired afterwards by gift, bequest, devise or descent, together with the rents, issues and profits thereof.

Question 3

Source

Quasi-Community Property

Answer 3

Under the authority of the “police power” of the state, a California court will apply the quasi-community property law when a couple, validly married in a non-community property state, become domiciled in California and subsequently file for a marital dissolution.

Quasi-community property is property, which was acquired by the parties while domiciled in a non-community property state. It will be characterized as if the parties had been domiciled in California at the time the property was acquired. Those items, which would have been classified as community property will be designated as quasi-community property and, for all intents and purposes, be treated as California community property.

Quasi-community property includes real and personal property acquired by a married couple while domiciled in a non-community property state, which would have been classified as community property if the couple had been domiciled in California at the time of the acquisition.

Question 4

Source - Quasi-Marital Property

Answer 4

The earnings of a spouse during marriage are classified as community property. In a putative spose situation, the community property or quasi-community property is called quasi-marital property.

Question 5

Characterization Of The Loan

Answer 5

The California Supreme Court has held that the primary intent of the lender is determinative of the classification of the loan proceeds.

Question 6

Education Expenses Reimbursement

Answer 6

The community is entitled to reimbursement for community property funds used to pay for tuition. Community funds used to pay ordinary living expenses are not reimbursable, unless they are directly related to the education experience, i.e., school computer expense.

Question 7

Community Funds Used to Pay Child Support - Reimbursement

Answer 7

Community property is liavble for the pre-marital debts of either spouse. If the debtor spouse uses community property funds to pay child support payments from a prior marriage, the community is not entitled to reimbursement.

Question 8

Transmutation

Answer 8

A valid transmutation requires an express written agreement from the spouse whose community property interest is affected in order for funds to be transmitted from community property to the separate property of the spouse opening the account.

-or-

A transmutation occurs when there is an intent to change the status of the property. Effective 1985, an express writing is required to transmute both real and personal property (with certain exceptions, i.e. jewelry, clothing, items of a personal nature, etc.)

Question 9

Exchange Rule

Answer 9

A change in form of property does not change its status

Question 10

Third Party Rights

Tort Creditor Rights

Answer 10

All community property and all of a debtor’s spouses separate property is liable for her debts. If liability is based upon an act or omission that occurs while the married person is performing an activity for the benefit of the community, liability will be satisfied first from insurance (no insurance for intentional torts,) the community property and then the tortfeasor’s separate property.

Question 11

Joint Tenancy

Answer 11

When the characterization of the source is inconsistent with the title, title to the property will control the characterization of the asset.

Third Party Rights - Tort Creditor

Where an asset is owned in joint tenancy, a court may sever the joint tenancy interests of the parties in order to satisfy a judgment.

Question 12

Conduct

Community Funds Used to Pay Off Purchase Price On The Home

Answer 12

When community funds are used to pay off the purchase price of a separate property asset, the community will retain a pro rate interest in proportion to its payments.

Question 13

Conduct of Parties - Separation

Answer 13

A husband and wife begin to live “separate and apart” when one or both parties decide to physically separate with the intent to never resume the marital relationship. Case law states that the actions of the parties must be in keeping with that intent.

Question 14

Community Property Personal Injury Recoveries

Answer 14

Personal injury recoveries that are community property must be awarded entirely to the injured spouse, unless justice demands otherwise, or the damage recovery is commingled with the community property and not traceable, but at least one-half must be awarded to the injured spouse.

Question 15

Community Funds Used To Pay Medical Expenses - Reimbursement

Answer 15

If the personal injury recovery is classified as separate property of the injured spouse and community property funds were used to pay medical expenses as a result of the accident, then the community is entitled to an automatic right to reimbursement for the community property funds used for medical payments resulting from the injury. No such reimbursement is required if the personal injury recovery is classified as community property (Sec. 781)

Question 16

Relationship - Putative Marriage

Answer 16

A putative marriage is an invalid marriage where one or both parties presume, in good faith, that the marriage is valid.

Question 17

Pereira/Van Camp

Answer 17

Pereira: (C/P residually defined) Applies when the determination has been made that the C/P time and skill was the greater factor in producing the profit or increased value. This method allocates the original S/P investment plus a fair return to the S/P (legal rate of return - 10%) multiplied by the number of years the business was held by the owner spouse, while the C/P will receive the balance or residual of the profit.

Van Camp: (S/P residually defined) applies whenever determination was made that the community time and skill was not the greater factor in producing the profits. Rather, other factors cause the business to increase, such as business or economic condictions. Under this method, the Owner spouse (C/P) will be paid for the reasonable value of his services to the business (reasonable value may be determined by what other people in the industry performing the same services are being paid) less what he has already been paid for salary or family expenses, while S/P will receive the residual.