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26 Cards in this Set
- Front
- Back
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Pereira Formula and when to use this test |
Pay interest on SP; the rest is CP
Personal Skills & Effort- use where spouse's time, skill, and effort are major factors in growth of the business (look for instances where spouse contributed creative ideas or develops new techniques and/or worked long hours and only drew a modest salary) |
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Van Camp Formula and when to use this test |
Value of Community Labor; the rest is SP
Use where capital investment was the major factor in the business's growth, and spouse's skills and efforts were less of a factor. (Look for instances where spouse was paid substantial salary and large bonues--meaning the community was compensated) |
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Types of Separate Property |
-Property owned by either spouse before marriage; OR -Property acquired during marriage by gift, will or inheritance; OR -Property acquired during marriage with the expenditure of separate funds -the rents, issue and profits derived from separate property |
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Definition of Community Property (CP) |
Property, other that separate property, acquired by either spouse during marriage. Common examples: (i) salary or wages earned by either spouse, and (ii) the income from community of assets |
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Community Presumption |
All assets acquired during the marriage are presumptively community property. The burden of proof to overcome this presumption is on the party so contending |
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How to being a CP essay question |
1) CA is a CP state 2) There is a community property presumption where all assets acquired during marriage are presumptively CP. 3) There are areas of Separate Property (SP) -Property owned by either spouse during marriage -gift, will or inheritance -The expenditure of separate funds -rents, issues, & profits |
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When does the economic community end? |
1) Permanent physical separation AND |
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Disparity in earning power can be considered only as to: |
1) Spousal support (alimony); AND 2) Child support |
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Economic Circumstances Exception |
Can have non-pro rata division, giving particular asset wholly to one spouse and "cash out" other spouse with other assets (with each spouse getting 50% of total value
Examples: - Family residence - Closely held corporation - Pension |
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Presumption of undue influence |
If one spouse gains an advantage from a transaction, a presumption of undue influence arises |
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Characterization of Assets |
Absent any contrary agreement, the statutory definitions of SP and CP control. But CA has always allowed the parties to opt out of the CP and SP characterization by agreement, either as to particular assets or as to all acquisition. |
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General Rule for Premarital Agreements |
Premarital agreements must be in writing, signed by both parties. Oral agreements are invalid |
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2 Exceptions to General Rule for Premarital Agreements |
1) Where oral agreement is executed (it has been fully performed)
2) Estoppel based on detrimental reliance |
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There are 2 defenses to enforcement of a premarital agreement |
1) Not signed voluntarily
2) Unconscionability |
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Marital agreements (transmutations) |
Before 1985- oral transmutations were permitted, whether by express agreement or agreement in fact
After 1985- Must be (1) In writing (2) signed by spouse whose interested is adversly affected; and (3) must explicitly state that a change in ownership is being made |
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Marriage of Lucas |
Absent proof of an agreement that W was to have a SP interest, by taking title in CP form W must have intended gift to community. Unless such an agreement is established, W has NO separate ownership interest and has NO claim for reimbursement. |
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What are the 2 Anti-Lucas Statutes? |
1) Ownership 2) Reimbursement |
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Pension Benefits |
Years of service while married/ total years employed to retirement |
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Marriage of Hug proration formula for stock options |
Used to reward the employee for their past service
Years from the date of employment to date economic community ends/ years from date of employment to date options become |
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Marriage of Nelson formula for stock options |
Used to encourage employee to remain with the company.
Years from date options are granted to date economic community ends / years from date option granted to date option became exercisable. |
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General rule for management powers |
Equal management powers- each spouse has equal management and control over all community property, and thus has full power to buy or sell CP and contract debts without the other spouse's joinder or consent |
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Personal belongings exception |
One spouse cannot sell or encumber personal property used in family dwelling (furniture, clothing, etc.) without written consent of other spouse |
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Business Exception |
Applies when a spouse operates a business interest that is all or substantially all community personal property and has primary management and control of all the business. If the spouse sells, leases, or otherwise encumbers substantially all of the personal property used in the business, must give written notice to other spouse. |
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What is Quasi Community Property |
Property acquired while the couple was domiciled in a non-community property state, which would have been acquired under the same circumstances in California. |
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Common Law Marriages |
CA does NOT recognize common law marriages. Exception: Where common law marriage is validly contracted in another state. |
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Putative Spouse and QMP |
The test is whether she had an objectionably reasonable and good faith belief that they were lawfully married.
If so, the assets required by them are quasi marital property. |
