Final Flashcards
Community Property
California is a community property state. There is a rebuttable presumption that all property acquired during the marriage is community property, while all property acquired before marriage, or after permanent separation or by gift or inheritance is presumed to be separate property. This presumption may be rebutted by a preponderance of the evidence and the burden is on the separatizer. The characterization of an asset as either community property or separate property depends on the three factors
3 factors
1) the source of the asset, 2) any actions by the parties that may have altered the character of the asset, and 3) any statutory presumptions that apply to the asset.
Separate Property
Separate property is all property acquired before marriage, after entry of judgment, earnings after the date of separation, property acquired by gift, bequest, devise, dissent, as well as rents, issues, and profits of separate property.
At Divorce
All CP is equally divided between the parties unless they have otherwise agreed in writing, orally stipulated to an open court, or an exception applies to the general rule of equal division of CP at divorce. A spouse’s SP remains his or her SP at divorce. With these general principles in mind, each property will be assessed individually.
Fiduciary Duty
Extremely high duty. Act in the interest of the other
Pre-Marital Agreements
- Made in contemplation of marriage 2) regulated by Uniform Premarital Agreement Act 3) May contract over any species of property (not child support) 4) Amended in writing does not require new consideration 4) If its against public policy by promoting divorce, is unconscionable or makes someone a public ward - must be made with adequate knowledge of the wealth of the other party and did not waive rights to disclose
Pre-Marital Agreement Requirements
Enforceable if:
1) independent counsel or express waiver 2) seven days to review except when they have attorneys and multiple drafts 3) fully informed in writing 4) proficient in the language in which it is written 5) no duress, fraud, or undue influence 6) any other factors courts deem relevant
Post-Nuptial Agreements/Transmutations 852(a)
1) must be in writing - statement in a will is not enough to establish valid transmutation 2) contain express declaration acknowledging the change in character of the asset, meaning a present intent to change the character of the asset 3) made, joined in, consented to, or accepted by the spouse whose interest in the property was adversely affected by the transmutation 4) consideration NOT required 5) parole evidence is inadmissible.
Transmutation Questions Flow
1) Was there a valid transmutation? If yes, then, 2) did the other party receive an unfair advantage? (fraud?) If yes, the undue influence (constructive fraud) must be rebutted by the defendant by clear and convincing evidence. If the defendant succeeds, then go to 2640 tracing 3) even if there was a valid transmutation, the AA spouse must have waived their 2640 tracing rights in writing.
Valid Transmutation: Did the other party receive an unfair advantage?
a. Adversely affected spouse must show: parties in confidential relationship which is presumed to exist, spouse benefitted relied on that relationship, benefitted spouse participated in transaction, unfair advantage gained by benefitted spouse
b. Burden shifts to benefitted spouse to show to AA spouse: freely and voluntarily entered into agreement, knew all the facts needed, knew legal effect of transmutation, fair and just, adequate consideration
Transmutations Requirements Exception
Do not need to follow transmutation requirements for “clothing, wearing apparel, jewelry, or other tangible articles of a personal nature that is used entirely or principally by spouse, to whom gift is made and that is not of substantial value, taking into account the circumstances of the marriage.
Quasi Community Property
QCP is property acquired by either spouse that would have been community property had the spouses been domiciled in CA at the time of acquisition. The “quasi community” label typically only becomes significant at divorce, death, or for purposes of creditor rights. Here,
Putative Spouse
A putative spouse is not lawfully married, but has a good faith belief based on objectively reasonable grounds that she is lawfully married. Once she learns that her marriage is invalid, she no longer accrues putative spouse property rights. In CA, a putative spouse is treated as a legal spouse and takes according to quasi-marital property principles. Here,
Quasi Marital Property
All property that would otherwise be CP or QCP under CA law will be labeled QMP. In CA, a putative spouse is treated as a legal spouse and takes according to quasi marital property principles. Under quasi marital property laws, all property accrued during the putative marriage is QMP, while property acquired before the putative marriage or after permanent separation, or by gift or inheritance, is SP.
Bad-Faith Spouse
When one partner is a good faith putative spouse, but the other knows of the defect in the marriage, it is not clear whether the non-good-faith spouse may make any claim to QMP accumulated by the good-faith spouse. The CA supreme court has left this question open, but has suggested that it might treat the spouses equally despite the partner’s lack of good faith. Thus, each partner is entitled to 1/2 of the QMP
Marital Economic Property
CP may only be acquired during the existence of the marital economic community. The marital economic community begins at marriage and ends at one spouse’s death or permanent physical separation. A permanent physical separation occurs when there is an actual physical separation and an intent not to resume the marital relationship. Here,
Transmutation
An oral agreement transmuting property is valid if made before 1/1/85 but must be in writing after that date. Here,
Prenuptial Agreement
A prenuptial agreement made before marriage MUST be in writing. An oral agreement is valid only where 1) the executed promise was fully executed by the promisor or 2) the promisee detrimentally relied upon the agreement. Here,
Personal Injury Award
Before marriage or after permanent separation = SP. If cause of action arose during marriage and award is for economic damages = maybe CP. If cause of action arose during marriage and award is for pain and suffering damages = SP. Beware of co-mingling or using award to pay off CP property
Retirement Benefits
Retirement benefits are CP if earned during the course of marriage. When retirement benefits are earned both during and after and/or before marriage, then the courts will apply the time rule to determine how much of the retirement bens are CP and SP.
Time Rule
The community’s share is calculated by determining the number of years the retirement benefits were earned while married divided by the total number of years the retirement benefits were earned. Here,
Stock Options
Stock options are a form of compensation. To the extent stock options are earned during the course of marriage the community has a right to share in their value. Here,
Community Loan + Separate Funds
When separate property and community bank loan proceedings are used to purchase an untitled asset, the CP and SP acquire a pro rata interest in the asset. The percentage of ownership is determined by the percentage that each contributed to the purchase price. Here,
Bonuses
Bonuses are treated as CP or SP depending on the circumstances. Bonuses are usually CP because they are a form of compensation for the spouse’s labor during marriage. However, in some cases, a bonus is more like a personal gift from an employer to an employee. Thus, the bonus would be the SP of the working spouse. Here,