Third Party Creditors & Transfers

Question 1

Creditors: SP

Answer 1

• Each spouse is personally liable for his or her own SP debt
• NOTE: child/spousal support incurred before the marriage is SP, regardless of when ordered
• SP of either spouse is liable for:
  1) necessaries of life contracted by other spouse while living together (Note: if no SP, CP liable, but entitled to reimbursement)
  2) Common (ordinary) necessaries by other spouse during separation (reimbursement)

Question 2

Creditors: CP is liable for

Answer 2

• debts of either spouse incurred before or during marriage (limited exception: premarital debt - other spouse’s earnings will not be liable if kept separate and inaccessible to incurring spouse, but still CP)
• at dissolution, premarital debt is assigned to the incurring spouse

Question 3

Torts of either spouse vs. 3P (or criminal fines)

Answer 3

CP liable if tort/crime is for benefit of community. CP secondarily liable if not for benefit of community

Question 4

Reimbursement

Answer 4

• If SP funds used to pay CP debt, SP is entitled to reimbursement as long as CP funds were available at time debt arose.
• If CP funds used to pay SP debt, CP is entitled to reimbursement as long as SP funds were available at time debt arose.

Question 5

Gifts to Third Parties: General Rule

Answer 5

GR: Spouse management and control: equal rights since 1975. Either spouse may act alone. Can deal with CP as his own, except CP business where other spouse is manager.

Question 6

Gifts to Third Parties: Requires written consent except:

Answer 6

• ratification (affirm/acknowledge)
• waiver (refrains from acting when has chance)
• estoppel (conduct by spouse results in detrimental reliance by other spouse)

Question 7

Gifts to Third Parties: Remedy

Answer 7

• during life, set aside entire
• at death, 1/2 set aside
• SL= 3 years

Question 8

3P Transfer for Consideration (BFP)

Answer 8

GR: Spouse management and control: equal rights since 1975. Either spouse may act alone. Can deal with CP as his own except CP business where other spouse is manager.
-However, it is a breach of fiduciary duties for one spouse to sell CP REAL property without the other spouse’s knowledge and consent.

Question 9

3P Transfer of Personal Property (to BFP)

Answer 9

• no consent needed if sale for FMV

- except clothes, furniture - remedy is to set aside sale; no reimbursement for a BFP

Question 10

3P Transfer of Real Property (to BFP)

Answer 10

-need knowledge and consent of both H and W for sale or lease > 1 year
-Remedy:
-before death, set aside; reimburse BFP
-after death
If BFP, set aside 1/2 of sale; reimburse BFP 1/2 (becomes TIC with BFP)
If not BFP, set aside entire sale (reimburse purchase price)
-SL: 1 year from date recorded

Question 11

Note about BFP

Answer 11

Since 1975, transfer to a BFP of property held in one spouse’s name alone is presumed valid. The injured spouse has one year from the date of recording to rebut the presumption by showing no consent - making the transfer no valid.