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32 Cards in this Set

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When does the Marital Economic Community(MEC) begin and end?
Begins: Marriage

Ends: Divorce, Death, or Permanent physical separation and an intent not to resume the relationship
What is Separate Property(SP)?
1) Property acquired before or after MEC
2) Property acquired during marriage through gift, bequest, devise, or purchased with SP funds.
3) Wages paid during marriage but earned prior to marriage
What is Community Property(CP)?
Property is presumptively CP if:
1) Acquired during marriage or temporary separation.

Can rebut presumption with:
1) Statutory evidence,
2) Written title evidencing a gift,
3) An agreement that the property is SP; OR
4) Funds traced to SP source.
What is Quasi-Community Property (QCP)?

And how is it treated?
QCP = Would have been CP if they had been in CA at time acquired.

Treatment:
1) During Marriage: SP
2) Divorce: CP *
3) Death: Survivor 1/2 interest, Decedent No interest in Survivors QCP *
4) Creditor: CP

* CA may be unable to get JDX over the QCP in another state, in these cases the non-acquiring spouse's interest will be offset by another source.
How is CP divided at divorce?
Equally, absent some other agreement.

Item Theory:
- Each spouse entitled to 1/2 of each ITEM
- NOT 1/2 of aggregate total
- Exception in certain logical and equitable circumstances

NOTES: Disparity in earning power is only considered when calculating spousal support.
Can a spouse transfer any of the CP?
A spouse can transfer 1/2 of the CP and all the SP by will.

Gifts from CP made before death can be voided by non consenting spouse, during lifetime.
When must a widow make an election, and what are the options?
When:
1) the testator includes an explicit election clause in the will; OR
2) the testator attempts to devise all* of the community property in the will.

* Note: T&W outline says this applies when testator attempts to devise more than 1/2 of CP. Which seems to make more sense.

What are the options:
1) Take under the will - giving up any right to 1/2 the CP
2) Take against the will - assert 1/2 CP ownership rights, this prevents her from taking under the will

NOTE: The statement 'all my interest' is not a violation, the decedent is only transferring his 1/2 CP interest then.
What is the intestate disposition to a spouse?
SEE T&W CARDS.

Basic - Decedents 1/2 CP, so she gets 100% CP.
SP:
- All if no heirs
- 1/2 if anyone in column 1 or 2
- 1/3 if more than 1 child
What property is liable for debts?
Creditor can reach the debtors spouse SP and all of the CP for debts incurred before or during marriage.
- EXCEPTION - A non-debtor spouse's CP earnings are NOT liable if:
- 1) debt occurred before marriage; AND
- 2) the bank account is not accessible to debtor spouse.

Non-debtor spouse's SP can be reached for necessities.
- Reimbursement is available if debtor spouse has SP or CP funds available to pay debt
What is the tort liability in marriage?
In general non-tortfeasor spouse is not liable.

However, CP can be used to pay tort liability.

Order of Satisfaction:
1) Acting for the benefit of the community. CP then SP
2) Not for the benefit of the community. SP then CP
What is the legal relationship between cohabitants?
Property disputes between unmarried cohabitants are governed by general contract principles, and if there is no express contract, a cohabitant may prove the contract was implied by the conduct.
What is a putative spouse, and what rights do they have?
A putative spouse must have a Good faith belief based on objectively reasonable grounds that she is married.

Rights: All property that would be CP or QCP if the couple had been legally married at acquisition is Quasi-Marital Property.

Termination: Once putative spouse is aware that there is no marriage.

NOTE: Putative spouse and real spouse may have to split property at decedents death.
What is Lucas and Anti-Lucas and how does it apply?
Property is presumptively CP if:
1) Property is purchased with SP + CP
2) Spouses take property in JOINT and EQUAL form.

Pre 1987 - Lucas - Presumption can be rebutted with an oral or written agreement to make property SP.

1987-Today - Anti-Lucas - Presumption can be rebutted with written agreement or title evincing SP.
- EXCEPTION: However, even if presumption of CP stands. Spouse may still seek reimbursement for:
- 1) Down payment
- 2) Improvements
- 3) Principle Payments
- NOTE: But not, interest, or appreciation.
- NOTE: Does not apply in DEATH - Death the property passes under Lucas.
What is the property form of an asset purchased from an account commingled with SP and CP funds?
Presumptively CP, but SP proponent bears burden of showing that SP funds were used to purchase the property.

Methods to show that SP used:
1) Exhaustion - CP funds depleted to pay family expenses
2) Direct Tracing - At the time there was sufficient SP funds available in the account.

Family expenses are always purchased with CP funds if available, and if SP funds are used there is NO right to reimbursement.
What happens if CP funds or Labor are used to contribute to an SP business?
What was the PRIMARY reason the business appreciated in value?
1) Character of Business - Favors SP - Van Camp
. .a) Factors: spouse drew a large salary implying that community was well compensated.
. .b) Equation: Market Salary(all years) - Family Expenses(all years) = CP portion
2) Personal Skills and Effort of the Spouse - Favors CP - Pereira
. .a) Factors: spouse worked long hours or drew a modest salary
. .b) Equation: Business(at time of marriage) + 10% = SP portion
What happens if CP funds are used to pay for SP property?
Used to pay principle:
- Use the buy-in rule to calculate CP ownership to extent that it reduced principle.
- Note: NOT Insurance, Interest, Taxes

Used to improve:
- Generally a gift, but may be reimbursed if presumption is rejected.
- But if used to improve your OWN SP then it is NOT a gift and:
- - CP must be reimbursed cost or appreciated value which ever is more.
What happens if SP funds are used to pay for CP improvement?
The anti-Lucas reimbursement rules apply. So the SP funds can be reimbursed for improvements.
Who has management and control over property?
Each spouse has equal control over CP and can buy, sell, and encumber all CP.
EXCEPTIONS:
1) Real community Property
2) Personal community Property
3) Gifts from CP

Each spouse has sole control and management over their SP
What requirements exists to convey Real community property?
Both must jointly execute a written document.
- Transfers to BFP are presumed valid, but non-consenting can void by showing she did not consent.
- Has 1 year to do this

Cannot make a non-testamentary transfer of 1/2 CP without others consent.
What are the requirements to transfer personal community property?
Includes household furnishings or clothing.

Requires: Written consent

Remedy: Non-consenting can void at ANY TIME and does not need to refund price
What are the requirements to make a gift of community property?
Requires Written consent

Remedy: Non-consenting can void during donors life. But can only get back 1/2 of CP after death.
What is required to have a valid premarital agreement?
Requires:
1) Writing
2) Represented by independent counsel
Exception: Oral ok, if fully performed, or promisee detrimentally relied

Limitation:
1) Limits or waives spousal support - with no attorney and unconscionable
2) Cannot promote divorce
What are the requirements to transmute property during marriage?
Pre 1985:
- Oral agreements based on express or implied behavior allowed.

1985 to today:
Agreements that alter the character of property must be:
1) Written
2) Signed by spouse adversely affected
3) Expressly states that a change in ownership is being made.
EXCEPTION: Not needed for tangible gifts of a personal nature
What are the ways a married couple could take title in property?
Joint Tenancy: Language - H+W take as joint tenants

Language: to 'H+W'
Prior to 1975 - Tenant in Common
1975 to today- Community Property

CP with Right of Survivorship:
Language: Any conveyance granting the grantees as having CPWROS rights.
What is the married woman's special presumption?
Requires:
1) Property Acquired before 1975
2) Special Title:
. .a) Wife's name only = SP
. .b) Tenants in Common = Wife 1/2 SP, Husband 1/2 CP
. .c) Wife and 3rd party = SP
Remedy: Husband can rebut wife having her name only on property.
What form of property is a personal injury recovery?
Generally: Recovery is SP if before of after marriage and CP if during.
- EXCEPTION: In divorce will be awarded to injured party if not commingled and equity concerns weigh in favor of.

NOTE: Personal injury recover against spouse is SP.
When does the community have the right of reimbursement for a spouses education?
Right to reimburse if:
1) CP funds used to pay education expenses, not living expenses.
2) The earning capacity was SUBSTANTIALLY ENHANCED; AND
3) The spouse did not waive by a signed agreement

Defenses:
1) 10 years have passed, and CP has benefited
2) Other spouse also received an education benefit; AND
3) Education reduced need for spousal support

NOTE: Any outstanding education loans at divorce belong to educated spouse.
How are stock options handled?
Stock options awarded during marriage are CP, courts use the time rule to apportion CP interest.

Date Option awarded to date MEC ends / Date option awarded to date it can be exercised = % of CP
How are pension benefits handled?
Vested and Unvested pension benefits earned during marriage are CP, courts use the time rule to apportion CP interest.

1) Determined based on when earned
2) If not eligible for payment:
. .a) Pay to non-participating spouse when paid
. .b) Cash out non-participating spouse
3) If eligible for pension benefits then non-participating spouse has a present right to money.

Calculation: Years of employed during marriage / Total Years of Employment = % CP
How is disability pay handled?
Workers compensation is treated like wage replacement and are classified based on when received.

Intended to Replace:
1) Marital Earnings = CP
2) Post Divorce Earnings = SP
3) Retirement benefits = CP
How is severance pay handled?
If it resembles retirement then CP

If it resembles lost earnings then SP
How is life insurance handled?
Whole Life: - Investment portion.
1) Death/ Divorce
. .a) Spouse entitled to CP apportionment based on amount CP paid. Remember only gets 1/2 of CP
. .b) Example on death with all CP used, 3rd party and spouse split since all CP.

Term: - No investment.
1) Death -
. .a) Apportion; OR
. .b) Determine based on characterization of final premium payment.
2) Divorce
. .a) No value