Management and Control of Community Property

Question 1

Management and Control of Community Personal Property

Answer 1

M&C of the CP belongs to either spouse with absolute power of disposition, other than testamentary, as they have with their SP estate.

Question 2

Gift exception for M&C of Community Property

Answer 2

A spouse may not make a gift, or dispose of community personal property for less than fair and reasonable value without the written consent of the other spouse.

Question 3

Family Dwelling M&C

Answer 3

A spouse may not sell, convey, or encumber community personal property used in the family dwelling, furnishings, clothing of children or the other spouse without the written consent of the other spouse.

Question 4

Management and Control of Community Business

Answer 4

A spouse who is in charge of managing and controlling a community business can make all business decisions alone but must give written notice of a sale or disposition of all or substantially all of the personal property used in the business operations.

Question 5

Sale or Lease of Community Real Property

Answer 5

Both spouses must execute an instrument to convey or sell community real property or for leases greater than one year.

Question 6

Conveyance to 3rd Person of Community Real Property

Answer 6

Conveyance of community real property by one spouse to a bona fide purchaser (3rd person who took in good faith without knowledge) is presumed valid, but a conveyance to a 3rd person can be voided by the other spouse within one year of filing the instrument.

Question 7

Fiduciary Duties Community Property Context:

Full Disclosure

Answer 7

Each spouse has a fiduciary duty to other spouses to full disclose all material facts about community assets and debts as well as provide equal access to all information upon request.

Question 8

Fiduciary Duties Community Property Context:

Good Faith and Fair Dealing

Answer 8

Each Spouse has a fiduciary duty to use the highest good faith and fair dealing with each other and never take unfair advantage of the other.

Question 9

Economic Circumstances Exception toward distribution of community property on divorce

Answer 9

Can have non-pro-rata division, giving particular assets wholly to one spouse and “cash out” other spouse with other assets (with each spouse getting 50% of total value)

Question 10

Statutory exceptions to “equal 50/50 division on divorce” rule, with one spouse getting more than 50% of total value

Answer 10

1. One spouse misappropriates CP. before or during pendency of divorce
2. One spouse incurred educational debts- treated as SP
3. One spouse incurred tort liability not based on activity for the benefit of the community
4. Personal injury award is CP but on divorce is awarded to injured spouse (unless the interests of justice require otherwise)
5. “Negative community” liabilities exceed assets; relative ability of spouses to pay debt is considered (concern is to protect creditors)

Question 11

Federal bond presumption

Answer 11

Only exception to party not being able to give CP award is when US gov’t savings bonds are involved. Federal law trumps and spouse cannot recover 1/2 of CP used to purchase bonds.