Management of Community Property

Question 1

General Rule

Answer 1

1. equal management powers
   i. each spouse has equal management and control over all community property
   ii. i.e. each spouse can unilaterally buy or sell CP and contract debts without the other spouse’s joinder or consent
2. personal belongings exception:
   i. one spouse cannot sell or encumber personal property used in family dwelling (furniture, clothing, etc.) without written consent of other spouse
   ii. violating transactions voidable by other spouse at any time
3. business exception:
   i. applies if one spouse has primary control over an entire business that is all or substantially all community personal property
   ii. managing spouse can act alone in all transactions
   a. but if selling, leasing, or otherwise encumbering substantially all of the personal property used in the business, must give written notice to other spouse

Question 2

Real Community Property

Answer 2

1. for conveyances of real property that is community property (usually a house):
2. joinder of both spouses is required
   i. BFPs: one-year statute of limitations
   a. if the buyer is did not know, and is not the case that buyer should have known, the seller was married, the unjoined spouse has a one year to void the transaction (by providing BFP with a refund)
   ii. non-BFPs: no statute of limitations
   a. if the buyer knew or should have known that seller was married, then there is no statute of limitations
3. entire interest: only entire interest can be transferred or encumbered
   i. neither spouse can transfer or encumber their half interest in real community property
   ii. family attorney’s real property lien exception: a spouse can unilaterally encumber her interest in real CP to pay the family attorney representing her in a divorce action