Lesson 4

Question 1

Commingling of Bank Accounts

Answer 1

If community and separate funds are held in one bank account it is presumed that all funds are community property unless community property funds are de minimus or separate property funds can be traced.

Question 2

Improvements in Real Property

Answer 2

1. Community property used to improve other spouse’s separate property: rebuttable presumption of a gift.
2. Community property used to improve own separate property: Community gets reimbursed or the value added by the improvement, whichever is greater.
3. Community property used to preserve own separate property: Community entitled to reimbursement.
4. Separate property contributed to community property:
   Separate property reimbursed for down payment, improvements, and payment of a loan if
   there was a divorce.

Question 3

Pereira

Answer 3

gives the separate property its original investment plus a fair rate of return (usually the legal rate of
return) while the community will receive the residue (if any). This method is used when the community
property time and skill was the greater factor in producing the profit or increased in value.

Question 4

Van Camp

Answer 4

A value is placed on the community labor placed in the business. This “salary” is community property while the remaining earnings are separate property. Van Camp is used when factors other than community time and skill, such as economic conditions, caused the increase.