Management and Control of CP Flashcards
What is the equal management and control rule?
During marriage, each spouse has equal management and control over all community assets and therefore has full power to buy or sell CP and contract debts w/o the other spouse’s consent.
What are exceptions to equal management rule?
Fiduciary duty exception; real property exception; household furnishings exception; business exception; unauthorized gift exception.
What is the fiduciary duty exception?
Not an exception per se, but a limit on the spouse’s right to manage CP. In managing CP, each spouse owes the other the highest duty of good faith and fair dealing, including disclosing material facts to the other regarding CP and debts. Duty breached by gross negligence or recklessness, not mere negligence. Managing spouse must provide an accounting when requested.
What is the real property exception?
Both spouses must consent in writing to a sale, mortgage, lease of real property of more than one year.
What are the remedies for breaching the real property rules?
Sale to BFP (without knowledge of marriage): Injured spouse can void sale if seeks to do so within one year. Reimbursement of purchase price to BFP without interest or appreciation.
Sale to non-BFP (with knowledge of marriage): Same as above EXCEPT voidable at anytime. Purchaser does not have protection of the one year rule.
What is the Household furnishing exception?
Spouse cannot sell, convey or encumber household items such as furniture or clothing without written consent of the other spouse. Transfer voidable.
What is the business exception?
Spouse operating business even if it’s CP has primary but not ale management and control. Can act alone in most ways but must notify spouse in writing re sale or lease of business; exchange of all or substantial y’all of the personal prop used in business. If no written notice, injured spouse can’t void transfer but has remedy if transaction substantially impaired 1/2 interest.
What is the gift exception?
Neither spouse can make an inter vivos gift of CP without the other spouse’s consent. Non gifting spouse may take the gift back at anytime, thus restoring the community. However, if the non gifting spouse does not discover gift until after death of gifting spouse, the non gifted may set aside the gift only as to her 1/2 CP share. Recovery from donee or gifting spouse’s estate.
