Definitions and Basic Principles Flashcards
ESSAY TIP: Community Property Intro Paragraph
1) California is a community property state. In a community property state, the marital economic community (MEC) begins upon marriage and ends at divorce, the death of a spouse, or permanent separation. Property acquired during the marriage is presumed to be community property (CP). All earnings during the marriage and all property acquired with those earnings are considered CP. All debts incurred during the marriage are the debts of the MEC.
2) Property that either spouse acquired before the marriage or after death, divorce, or permanent separation is separate property (SP). During the marriage, property acquired by gift or inheritance is SP, as well as any other property that is traceable to an SP source.
3) [IF APPLICABLE]: Quasi-community property (QCP) is property acquired by a married couple while living in a non-CP state that would be characterized as CP if the couple had been living in California at the time the property was acquired. The QCP classification is triggered by divorce or the death of the titled spouse.
What is Community Property?
All property that is acquired during marriage is considered CP and for the benefit of the Marital Economic Community (MEC).
Includes:
1) Rent, Income, or Profit of CP Asset
2) Labor, Earnings, Salary, and Wages of spouse
3) Property acquired with CP funds (tracing!)
When does the Marital Economic Community (i.e. CP presumption) end?
1) Death
2) Divorce
3) Permanent Separation
When does a permanent separation occur?
1) At least one spouse has expressed intent to end marriage
2) Spouse’s conduct is consistent with intent to end marriage
What is Separate Property?
Property that either spouse acquired:
1) Before the marriage or after death, divorce, or permanent separation is SP.
2) During the marriage, property acquired by gift or inheritance is SP, as well as any other property that is traceable to an SP source.
ESSAY TIP: What’s significant about a spouse having their own bank account?
It is evidence of the SP presumption.
However, consider whether or not the money IN the account is CP or SP funds through tracing.
ESSAY TIP: What’s significant about a spouse using their own funds to purchase property during marriage?
It is evidence of the SP presumption.
What is a Premarital Agreement and what are it’s effects?
A premarital agreement is an agreement between California couples who want to avoid the CP system. Requires:
1) Signed by both parties
2) In writing
Does not require consideration.
Premarital Agreement Defense:
Involuntary Agreement
Premarital agreements are presumed to be involuntary, UNLESS:
1) Party agreement is being enforced against had independent counsel or waived counsel at least seven days prior to signing
2) Party had **not less than 7 days between presenting and signing agreement
3) If not represented, party was fully informed of rights and obligations of agreement
4) Parties did not lack capacity
5) No evidence of duress, fraud, or undue influence.
ESSAY TIP: If it is uncertain whether an agreement is enforceable or not, what should you do?
For all assets/debts, do both analysis’!
Premarital Agreement Defense:
Unconscionability
An agreement is unconscionable if:
1) Party was not provided fair, reasonable, or full disclosure of property or financial obligations of other
2) Did not voluntarily or expressly waive, in writing right to disclosure
3) Did not or reasonably could not have adequate knowledge of property or financial obligations of other party.
