Difficult to Classify Assets Flashcards
Purchases made with both SP and CP Funds?
Pro Rata SP and CP
Personal Injury from Third Party
Cause of Action During Marriage: At death –> CP; at divorce –> awarded to injured spouse
Cause of Action Before/After Marriage: SP but community can get reimbursement for expenses paid due to injury
Personal Injury Cause by Other Spouse
Collect from spouse’s SP first, then CP once exhausted
Pension Benefits
Accumulated During Marriage: CP
Accumulated After Marriage: SP
Apportion pro rata
If spouse chooses not to retire, court may order employer to give non-employee spouse their share of benefits as if employee-spouse had retired
Disability Benefits and Workers Compensation
Depends on when received –> CP if during and SP if after
Stock Options
Vest During Marriage: CP
Vest After Marriage: Depends on Intent of Employer:
To encourage future services: time between date of grant and date community ends / years from grant to becoming exercisible * # of shares = CP
Reward for Past Services: time between hired and community ending / time between employment and options becoming exercisbile * # of shares = CP
Severance Pay
Split between treating it CP and SP
Bonuses
During Marriage: CP
After Marriage: SP
Education/Training
SP with possible right to reimbursement if:
1. CP paid for education
2. Person’s earning capacity was substantially enhanced
DEFENSES:
- Community substantially benefited (*presumed if greater than 10 years)
*- Other spouse received education too
- Reduced need for child support for educated spouse *
Life Insurance
Lifetime Coverage: Each spouse gets % cash value based on % of premiums paid
Term Coverage: Property of whichever estate paid the last premium
Property Insurance Proceeds from SP Property
If CP used to pay premiums, it is SP but CP entitled to reimbursement
Business Goodwill
Definition: qualities that generate income beyond labor/reasonable expenses/physical assets
Use either (1) market sales valuation or (2) the excess earnigns method
