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COMMUNITY PROPERTY > CP from notecards > Flashcards

CP from notecards Flashcards

1
Q

When does the Economic Community End?

A

Permanent physical separation
and
Intent not to resume the marital relation

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2
Q

Rule for Inter Vivos & Testamentary Gifts of CP?

A

Neither SPo can make a gift of CP w/o the other’s consent (in writing).
–> ( Power to manage ≠ Power to give away)

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3
Q

If H makes an Inter Vivos Gift of their CP w/o W’s consent, what can she do?

A

Either:

  1. Set the gift aside in its entirety (now)
  2. On divorce, take equal offsetting CP assets to recover her 1/2 CP
  3. On Death, set gift aside as to her 1/2 CP.
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4
Q

What if H makes an inter vivos transfer of their life insurance?

A

Same as for gifts.

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5
Q

What happens to CP on divorce?

A

Absent property settlement agreement, all CP must be divided equally.

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6
Q

What are the Exceptions to the general rule that CP is divided equally on divorce?

A

Economic Circumstances Exception

  1. Family Residence
  2. Closely Held Corporation
  3. Pension

Statutory Exceptions

  1. if one Misappropriates CP
  2. Incurred Educational Expenses (treated as SP)
  3. Tort L not based on activity for Community Benefit.
  4. Personal Injury (is CP but on divorce awarded to injured)
  5. “Negative Community” –> where Liabilities > Assets. Relative ability to pay debts considered.
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7
Q

For which property is there a SEPARATE PROPERTY Presumption?

A
  1. Property acquired before marriage or after permanent separation
  2. by Gift Will or Inheritance
  3. with the Expenditure of Separate Funds
  4. Rents, Issue, Profits derived from SP
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8
Q

How to characterize Acquisitions on Credit during Marriage?

A

Community Credit Presumption:
“Funds borrowed during marriage and goods purchased during marriage are presumptively community credit.”

However, borrowed funds/credit purchases are classified according to the INTENT of the LENDER.

We look to WHERE THE LENDER IS LOOKING FOR SATISFACTION of the debt.

  • personal trustworthiness–> CP
  • mortgage on land H owns as SP–> SP
  • primarily at credit standing of W –> SP
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9
Q

What about altering the characterization of assets by agreement between the parties?

A

Parties may opt out of CP & SP characterizations by agreement, either as to particular assets or all acquisitions.
By
1. Premarital Agreement
2. Transmutation (agmt during marriage to change characterization of asset)

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10
Q

Defenses to Premarital Agreements?

A 
1. Not voluntarily signed
   (PRESUMED, unless: 
   i) separate legal counsel
   ii) 7 days to sign
   iii) if no #1, fully informed in writing (native language)
  1. Unconscionable
    - - Spousal support: unenforceable if:
    1) no independent legal counsel
    2) provision unconscionable at time of signing
    - -
  2. SOF (see next card)
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11
Q

Must a Premarital Agreement be in writing?

A

Yes. Must be in writing, signed by both partners. No oral agreements.
Exceptions:
1. Oral agreement is fully performed.
2. Estoppel based on detrimental reliance.

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12
Q

What duties do a H&W owe each other?

A

Duty of GF & Fair Dealing
If one spouse gains an advantage from a transaction, a presumption of UNDUE INFLUENCE arises.

That spouse has burden to prove she did not breach her FD.

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13
Q

Is a negligent investment of community funds a breach of FD?

A

No, but a GROSSLY negligent investment of Community Funds is.

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14
Q

Examples of title taken in “JOINT AND EQUAL” form?

A

“H+W Smith”
“H+W Smith, husband and wife”
“Mr+Mrs Smith”
“H+W Smith, as JT’s”

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15
Q

What happens on DEATH if CP acquired in “Joint and Equal” form was improved with SP?

A

Death: like Lucas.

Unless agreement, no SP ownership interest, no reimbursement.

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16
Q

What happens on DIVORCE if CP acquired in “Joint and Equal” form was improved with SP?

A

Divorce:
Ownership: Unless agmt or statement in title instrument, no SP instrument.

Reimbursement: YES reimbursement for DIP.
(Down Payment
Improvements
Principal Payments)

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17
Q

What is “Tracing” or “The Source Rule”?

A

In order to determine the character of any asset, courts will trace back to the source of funds used to acquire the asset.
A mere change in form doesn’t change its characterization.

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18
Q

Property Acquired w/ CP & SP Funds (& no title presumption applies)

A

Apportion the interests according to their contribution.

E.g.: House bought w/SP. Mortgage paid off w/CP.

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19
Q

Property Acquired w/CP & SP Funds – & Title taken in JOINT AND EQUAL form

A

Death: like Lucas.
Unless agreement, no SP ownership interest, no reimbursement.

Divorce:
Ownership: Unless agmt or statement in title instrument, no SP instrument.

Reimbursement: YES reimbursement for DIP.
(Down Payment
Improvements
Principal Payments)

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20
Q

CP used to improve SP

A

No pro rata ownership

Reimbursement?
NOT if CP used by spouse to benefit OTHER spouse’s CP
YES if CP used by spouse to benefit his own SP.
… reimbursement to CP is then the greater of cost of improvement vs increase in value of SP.

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21
Q

What if Title was taken IN ONE SPOUSE’S NAME only?

A

Asset titled in one spouse’s name does NOT overcome the community presumption.

EXCEPT: Married Woman’s Special Presumption.
Assets acquired before 1975 with CP in wife’s name only are presumed to be a gift to her & SP.

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22
Q

What is the Married Woman’s Special Presumption?

A

Assets acquired before 1975 with CP in wife’s name only are presumed to be a gift to her & SP.

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23
Q

When does the Married Woman’s Special Presumption apply?

A
  1. Title taken in W’s name alone before 1975.
  2. Title in name of W+H before 1975 but title NOT taken “in JT,” “husband and wife” or “Mr & Mrs”.
  3. Title in name of W+3rd Party before 1975.
    (W is T/C with 3rd party)
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24
Q

What happens with Commingled Bank Accounts?

Presumption…

What could you try upon divorce?

A

Family Expense presumption: family expenses are assumed to be paid for w/ CP funds.

Recapitulation accounting.

  • Exhaustion Method
  • Direct Tracing Method
25
Q

What is the Exhaustion Method?

Used w/Commingled Bank Accounts.

A

e.g.:

only $3K in account. H deposited $20 SP in account & paid a $5K tuition bill.

26
Q

What is the Direct Tracing Method?

Used w/Commingled Bank Accounts.

A

e.g.:
$15K in account. H deposits $12K SP, 2 days later writes check for $12K to buy stock.

Must show:

  • sufficient SP funds available.
  • you INTENDED to use SP funds to buy asset.
27
Q

What is the Widow’s Election?

A

Occurs when H mistakenly thinks he can devise his CP w/o W’s written consent.

28
Q

What are the options under the Widow’s Election?

A

W can take UNDER THE WILL, but must allow will to devise CP as it wrongfully does.

W can take AGAINST THE WILL by claiming her 1/2 CP. But then must relinquish all testamentary gifts in her favor.

29
Q

How do we characterize…

Disability Benefits?

A

CP or SP, depending which wages intended to replace.

e.g. to the extent they are taken in lieu of retirement benefits, treated as retirement benefits.

30
Q

How do we characterize…

Retirement Pensions?

A

CP if earned during marriage
Time Rule to apportion

Effect of death: spouse gets her share of remaining benefits if other spouse dies first, and has T power over her share if she dies first.

31
Q

What if H is eligible to retire but doesn’t?

A

Upon divorce, spouse may demand her share of benefits from company, as though worker had in fact retired.

32
Q

How do we characterize…

Business + Professional Goodwill?

A

CP if earned during marriage.

33
Q

How do we characterize…

Education & training?

A

SP.

Community entitled to Reimbursement tho, if:

  1. Community funds used to pay &
  2. Enhances spouse’s earning capacity

Community NOT entitled to Reimbursement if:

  1. Community already benefited from educatoin
  2. Need for Spousal Support is decreased.
34
Q

How do we characterize…

Personal Injury?

A

Recovery against spouse: SP

Recovery against 3rd Party: CP
Divorce: awarded to injured spouse so long as:
1. can be traced
2. was not already spent

Spouse L to 3rd Party:

  • CP used to pay first (if while doing act to benefit community)
  • SP used to pay first (if while doing act to benefit spouse personally)
35
Q

How do we characterize…

Severance Pay

A

Typically understood to replace worker’s wages while she finds a new job.
… If replaces wages, CP.

36
Q

How do we characterize…

Stock Options?

A

Form of employment compensation.

CP or SP, depending when awarded.

37
Q

How do we characterize…

Stock Options awarded during marriage but not yet vested?

A

TIME RULE to determine CP&SP shares.

  • Marriage of Hug – more CP – intention to pay for past services
  • Marriage of Nelson – less CP – intention to encourage to remain
38
Q

What are the formulas for Marriage of Hug and Marriage of Nelson? (Stock options awarded during marriage)

A

Marriage of Hug: (for past services)
Yrs EMPLOYED while married /
Beginning employment to option exercise

Marriage of Nelson: (to encourage to remain)
Yrs since option granted while married /
Yrs option granted to option exercise.

39
Q

What happens when…

Community Labor is used to enhance SP business?

A

Community is entitled to share in the increased value of the SP.

To calculate CP’s interest, use either Pereira or Van Camp formulas.

40
Q

What is the Pereira formula? When is it used?

A

To calculate CP’s interest when one spouse brings a SP business into the marriage & devotes her CP labor to the management of the business.
–> When increase is result of COMMUNITY LABOR.

Pay interest on invested capital.
That part is SP
The rest is CP.

41
Q

What is the Van Camp formula? When is it used?

A

To calculate CP’s interest when one spouse brings a SP business into the marriage & devotes her CP labor to the management of the business.
–> When increase is result of UNIQUE NATURE OF SP ASSET

Value spouse's managing services. 
multiply by years marriage. 
subtract any salary already paid. 
subtract any family expenses paid. 
That part is CP. 
The rest is SP.

e.g. value of the product due to wartime rationing of the government.

42
Q

How is property divided at divorce?

A

The basic rule at divorce is to divide each community asset equally in kind.

43
Q

How is property divided at death?

A

If spouse dies with a will, entitled to dispose of all his SP and 1/2 CP.

If dies w/o a will, surviving spouse gets all the CP.
Between 1/3 to all the SP will be awarded to surviving SP depending whether issue or parents surviving.

44
Q

What is Quasi-Community Property?

A

Property acquired by the couple while living in another jurisdiction which would have been classified as CP had the parties been domiciled in CA.

45
Q

How is Quasi-Community property divided at Divorce?

A

At Divorce:

QCP is treated exactly like CP.

46
Q

Management and Control During Marriage:

A

Equal Management Rule:
The general rule is that during the marriage the spouses have equal management and control of all the community assets.

Some exceptions.

47
Q

What are the Exceptions to the Equal Management Rule?

A
  1. RP transfers: both spouses must join
  2. Personal belongings (clothing, furniture)
  3. Sp managing a business gets primary management and control
  4. Bank accounts in name of one spouse alone.
48
Q

What is Quasi-Marital Property?

A

All property that would be QCP if a marriage was lawful is labeled as QMP.

49
Q

What is a Putative Spouse?

A

A putative spouse is not lawfully married but has a GF belief she is lawfully married.

50
Q

What are the rights of a Putative Spouse?

A

A putative spouse is treated as a legal spouse and takes according to QMP principles.

Under QMP principles, all property acquired during the putative marriage is quasi-marital property, while property acquired before the putative marriage or after permanent separation is SP.

51
Q

What does lawful marriage require?

A

Capacity
+
Performance of legal procedures

52
Q

What happens when one partner is a Putative Spouse in GF, but the other knew there was no marriage?

A

It is not clear whether the non-GF spouse may make any claim to QMP accumulated by the GF-spouse. The California Sup Ct has left this question open but has suggested it might treat the spouses equally despite one partner’s lack of GF.

53
Q

What happens if a spouse’s child support obligations arose from a prior relationship?

A

This is treated as a Debt incurred before marriage.

54
Q

What happens if a Debt is Incurred before marriage?

A

All the Debtor’s SP and all of the CP is liable for the debt, but not the other spouse’s SP.

55
Q

How may a non-debtor spouse protect her CP earnings from her spouse’s premarital debts?

A

CP earnings of the non-debtor spouse are not liable for her spouse’s premarital obligations, so long as:

  • held in separate account
  • debtor spouse no rt of withdrawal
  • earnings not commingled with other QMP
56
Q

If CP was used to satisfy the Debtor spouse’s preexisting debt but his SP funds weren’t used, is CP entitled to reimbursement?

A

yes. to the extent that SP income was then available.

57
Q

What property may be reached by creditors for Debts incurred DURING marriage?

A

All the CP and the debtor’s SP.

58
Q

Life Insurance:

What happens if Decedent has named a Beneficiary other than the surviving spouse in connection w/ a CP policy?

A

Proceeds are CP regardless of the named beneficiary.

Decedent deemed to have devised his 1/2 CP interest in the proceeds to the name beneficiary.

59
Q

When is an oral prenuptial agreement valid?

A

A. only if made before 1985, and only if:

B. executed promise was fully executed by the promisor or the promisee detrimentally relied upon the agreement.

COMMUNITY PROPERTY (1 decks)

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