Pg 11 Flashcards
After you separate and file for divorce, what must you do with the marital property?
Catalogue and characterize it.
Does a California court have any power to award any part of a spouse’s SP to the other spouse?
No
What is the equal division requirement in California?
There must be equal division of each asset, but on divorce this could mean that the aggregate community estate has to be equally divided, not that each asset has to be equally divided. On death each asset is divided
What is the rationale for equally dividing each asset upon dissolution?
There must be equal division because otherwise even though each spouse has a mathematically identical portion, each would get different property
What are the two exceptions to the rule that there must be equal division of each asset on dissolution?
– ESSENTIALLY equal in value: You can use a method of division that doesn’t divide in kind if economic circumstances warrant it. Like maybe the asset cannot be divided without impairment. I.e.: ongoing family business, or family residence if one spouse has custody
– if the asset satisfies a critical need of ONE SPOUSE and there is no adequate replacement for it, it doesn’t have to be equal division. Ie: if an asset is essential to one party’s ability to earn a living
What happens if there is a family home especially if kids have lived there a long time and it would be really traumatic for them to have to leave upon dissolution?
The court can award the home to the parties as TIC but delay the sale until the youngest turns 18, or can give the home to the custodial spouse but require him to refinance it to pay the other spouse his share
What is the time that the court values assets for division of property on dissolution?
At the time nearest trial
What is the reason that valuation of assets upon dissolution isn’t done until a time closest to trial?
Because the parties share the risk of change in value so that the profit or loss is shared up to the valuation date.
Ie: if stocks skyrocket between separation and trial, this allows the parties to share that win
If assets include something like human capital or value that is added by labour to a business, what is the best time to value the assets in regard to dissolution?
From the date of separation because profits after that are the earner spouse’s SP
If assets have tax consequences, like a family home, when is the best time to value them with regard to dissolution?
After payment of taxes. Taxes are owed equally by both spouses, so this equalizes division.
If parties decide they’re going to divide property themselves upon dissolution, what is required?
It must be in writing or in open court, not by an oral agreement outside of court
If there are unpaid debts at the time of the trial for dissolution, what happens to them?
Generally they are divided equally or assigned to one spouse
What happens with educational loans or tort liability debts at dissolution?
They are usually assigned to the spouse that is responsible for them
If a debt occurred before a marriage, what happens to that debt at dissolution?
It belongs to the spouse that incurred it
If a debt was incurred during the marriage, what happens to it at dissolution?
It is characterized as being either CP or SP and then divided.
Ie: if a husband takes out a $10,000 loan during marriage for a family vacation, that benefits the community, so it is CP and it is divided equally at divorce. But if a wife was caught stealing and had a $15,000 attorney bill, at divorce she would owe that bill. If the activity is not for the benefit of the community, it is assigned to the responsible spouse
What happens to debts that are incurred after separation but before divorce?
– if incurred for common necessities of life of either spouse or for necessaries of life of the kids: it is assigned to either spouse depending on the respective needs and ability to pay at the time the debt was incurred
– if incurred for non-necessaries: it is assigned without offset to the spouse that incurred the debt
After there has been an entry of judgement for dissolution but before finalization of the divorce, what happens to debts that are incurred in that period?
The spouse is responsible for his own death without offset
If debts are incurred after a dissolution judgement has been entered, what happens to that debt?
Neither spouse is responsible for any debt incurred by the other at that time
What are the rules for dividing property at the death of one spouse?
The survivor gets half of the interest in each CP asset
If property is held in joint form like JT or CP, what happens on the death of one spouse?
Presumption follows the title
If there is no will, and one spouse dies, what happens to property that is held in joint title or CP?
JT becomes the property of the surviving spouse, and CP property does too because the surviving spouse already owned half of the property, and now he gets the decedent’s half too. At least 1/3 of the SP also goes to the surviving spouse
What happens to property on the death of one spouse when there is a will?
- JT property becomes the property of the surviving spouse
- CP: the decedent has a right to dispose of his half by will, so the surviving spouse only gets the other decedent spouse’s half of the CP if he didn’t devise it to someone else. SP can also be disposed of any way the decedent ones
What happens to pension benefits on divorce?
Distribution depends on when the benefits were earned. These are a property interest if they derive from employment during the marriage. The spouse gets 50% of all pension earned during the marriage.
When does a right to a pension terminate?
If an employee quits or gets fired
