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67 Cards in this Set
- Front
- Back
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What is Community Property?
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Property acquired by either spouse after marriage but before permanent legal separation is presumed CP in CA, absent a showing of transmutation. The burden of proving the property was SP is on the spouse contending SP.
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What is Separate Property?
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1) Property owned by either spouse before marrige is SP
2) Property acquired during marriage by gift, devise, bequest or inheritance is SP 3) Property acquired during marriage by expenditure of SP funds may be established as SP through tracing 4) Rents, issues and profits derived from SP are SP |
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When does the economic community begin and end?
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The economic community begins upon marriage and ends at either death or permanent physical separation with intent not to resume the marital relations; but that intent MUST BE communicated to the other spouse!
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Does a trial separation end the economic community?
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No, a trial separation will not end the economic community because INTENT not to resume marital relations was lacking at the beginning of the "trial" separation.
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What if the trial separation eventually turns into a permanent separation?
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The economic community still will not end until intent not to resume the marital relations can be established. You can imagine this is a much-litigated cutoff.
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Are earnings and wages classified as SP or CP on the basis of when they were earned or when they were received?
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Earnings are classified on the basis of when they were earned because CA law treats the labors of each spouse as a community asset. Even if the financial renumeration for such labor doesn't come until after dissolution, both spouses are entitled to half under the principle of equal division.
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What happens to CP if it is left out of the judgment or not divided by the court upon divorce?
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The court retains continuing jurisdiction and can divide such assets 50/50 even after the divorce is final, unless the interests of justice dictate otherwise.
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How is CP divided upon divorce?
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All CP is divided 50/50, unless the parties agree to an alternate property settlement. Disparity in earning power will NOT be considered, except in fixing spousal support. If economic circumstances warrant, certain assets can be awarded wholly to one spouse and another asset awarded in setoff to the other spouse, as long as 50/50 division of the entire CP estate is maintained. Examples: the marital home to the custodial spouse; a closely-held corp. to managing spouse; pensions.
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What EXCEPTIONAL circumstances defeat the equal division rule?
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1) one spouse misappropriates CP
2) student loans must be assigned to the educated spouse 3) tort liability not based on activity for "benefit of the community" 4) personal injury awards of one spouse are awarded soled to that injured spouse (unless the interests of justice require otherwise) 5) community liabilities exceed assets: relative ability of the spouses to pay considered to protect the rights of creditors |
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What happens when one spouse makes an inter vivos gift of a Jag to the pool boy or her tennis pro? Or transfers him the Jag for $5?
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1) the wronged spouse can set aside the gift in its entirety and go take the Jag back from the poolboy because neither spouse can make a gift of CP without the other spouse's consent in writing
2) Or, upon divorce, the ripped off spouse gets to take offsetting CP assets to recover his 1/2 community share in the Jag. |
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Ok, this time Wifey names the poolboy as the beneficiary on her life insurance policy. What can H do?
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When Wifey dies, H can recover his 1/2 community interest in the life insurance proceeds from the poolboy. But, sadly, poolboy gets to keep Wifey's half!
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Can Wifey will her SP and her 1/2 share in the CP to poolboy?
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Yes, yes she can. Each spouse has the power of testamentary disposition over all of her SP and over her 1/2 share of the CP.
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What if Wifey dies intestate?
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H has the last laugh. All the CP goes to H as the surviving spouse, and 1/3 to 100% of Wifey's SP will be H's too-- it depends on how many of their kids survive her.
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What happens if Wifey's will devises CP to the poolboy and leaves H the residuary clause which contains only the trailer in Bakersfield and a PacMan machine?
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H will be put to a Widow's election, poor sap. He can either accept the residuary gift and go live in the trailer, or elect to take against the will and claim his half of the CP, but give up the trailer. Hm, what to do?
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Now Wifey has gone out and gotten a Black Amex and racked up a sh*tton of debt. Who gets to keep the alpaca farm she bought?
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When title is NOT taken in joint and equal form:
1) Funds borrowed during marriage and good purchased on credit are presumed CP. But, the alpaca farm will ultimately be classified according to the intent of the lender- did AMEX intend to rely solely on Wifey's SP assets to satisfy the debt? Or were they also considering her great credit rating (a community asset)? 2) If Wifey used CP $ as a down payment or whatever, then the alpaca farm is proportionally CP and the community gets a "buy-in" in proportion to the community funds she used in the purchase. |
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What about that prenup Wifey and H signed BEFORE they got hitched? Won't that act to preserve the alpaca farm as Wifey's very own?
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Transmutation by antenuptial agreement requires no consideration. But Wifey and H both had to sign a writing UNLESS:
1) they had an oral agreement and it was fully performed (sounds fun!) 2) H relied on Wifey's oral promise that the alpaca farm would go to red-headed stepson, and she reneged and failed to change her will. |
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Can Wifey make H promise that if they split up she will never have to pay him child or spousal support?
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Uh, no. That would violate public policy.
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What defenses might H assert when Wifey tries to wave the prenup in his face at her lawyer's office?
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1) H can prove that he didn't sign the prenup voluntarily because Wifey had redheaded stepson by the toes and was dangling him over the alpaca farm fence.
2) H can prove that the prenup was unconscionable when made becasue Wifey hid from him the existence of her diamond mines in South Africa and he didn't waive his right to disclosure of her assets in writing |
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What about after they do the deed? Can Wifey hide behind a postmarital agreement declaring that the alpaca farm and all of the blood diamonds are hers alone?
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Well, no consideration would be needed for such a postnup, but if this happened after 1985, it better be in writing.
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What should Wifey's postnup contain?
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Oral transmutations are not valid if entered in to after 1985. Must be:
1) in writing 2) signed by H since his interest is the one being adversely effected and 3) the writing must expressly state that ownership of the alpaca farm is changing from the community to Wifey's SP |
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What if Wifey gives H a scale model of Neverland Ranch for his bday? Does she retain a CP interest in the gift?
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Gifts of tangible property (but NOT cash or investments) of a personal nature from one spouse to another, so long as not substantial in value, will become the SP of the donee spouse without a writing. So, H owns the Neverland Ranch as his SP, free & clear.
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Can Wifey use H's will to prove that he subsequently transmuted the Neverland Ranch model back to her?
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No, a will is not a satisfactory writing and cannot be used at divorce to prove a transmutaton during marriage.
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Let's say that in 1974, Wifey used CP $ to buy an emu ranch, taking title as "Mrs. Wifey, a married woman." Then, she sells said emu ranch to poolboy. Can H get half?
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No. Under the Married Woman's Special Presumption, if CP was used to take written title in a married woman's name prior to 1975, the property was presumptively the wife's SP. The presumption could be rebutted as between H and Wifey, but is irrebuttable against a BFP like poolboy.
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Ok, but will the MWSP apply if title to the emu ranch is taken as "Mr. and Mrs. H Hubby" or "H Hubby, Husband and Wife," or in joint tenancy?
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No, in that case the MWSP would not apply. The emu ranch would be CP. If Wifey sold it away, H could undo the transaction and claim his half.
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What if Wifey and H take title to the emu ranch as "Wifey and H" but the title doesn't mention that they're married at all- no Mr. and Mrs., no husband and wife?
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If H's name is on the title but there's no "Mr and Mrs" or "Husband and Wife," then title is held as a tenancy in common-- Wifey owns her SP portion plus half the CP and H only gets the leftover CP.
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Ok, it's 1979 and Wifey and H are at it again. This time, they're taking title to a timeshare in Cabo in joint and equal form using H's SP $. Is it CP?
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Before 1980, tracing was allowed to establish character. So, H would be allowed to demonstrate that he paid for the Cabo shack with his SP funds and thus the shack is his SP.
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It's after 1980 and H and Wifey do the same thing with a condo in Boca next door to the Seinfelds?
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After 1980, Lucas tells us that taking title in joint and equal form makes any SP contributed by H a gift to Wifey. Absent proof of some intent to keep the SP separate, the Boca place is CP.
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H. and Wifey buy a place in Aspen now, using H's SP funds and taking title in joint and equal form. H. dies in a tragic outdoor hot tub incident while still wearing his ski suit. What result?
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For purposes of death, jointly titled property is controlled by the Lucas principle and is presumtively CP.
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Now it's late in 1984. H. and W use H's SP funds to buy an RV and driver cross country. They take title in joint and equal form. H. is injured in an unmentionable tailpipe incident and survives but Wifey divorces him because she doesn't want to be held back by a cripple. What result?
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For purposes of divorce the CA legislature has given us special anti-Lucas statutes. After January of 1984, property acquired during marriage in joint and equal form is presumptively CP. The presumption can be rebutted only by an express statement in the deed that the RV is H's separate property, or a valid written contract designating it as his SP and signed by Wifey.
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Wifey and H patch things up and in 1987 H uses his SP funds to buy new yellow shag carpet for the RV and a fierce new satellite TV system with plasma screen. Wifey decides to take the RV and split. What result?
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A spouse who makes post-1984 SP contributions to CP for a downpayment, improvements or principal payments on a mortgage can get reimbursed for such contributions, capped at the net value of the RV.
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H and Wifey settle down in the 'bu in H's nice little SP beach house, paying for the morgage payments with CP earnings. What result when Wifey sails away into the sunset?
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H's SP house is still his SP, but the mortgage was paid partly with CP funds, so the equity in the beachhouse will be CP in proportion to the amount of PRINCIPAL buy-in of those payments. Wifefy gets nothing for the INTEREST payments, however.
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H gets smart and takes out a life insurance policy to provide for red-headed stepson, but he pays the premiums with CP. What will happen to the proceeds?
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If it's a whole life policy that has a cash value, it will be CP in proportion to the payments made using CP. If it's a term policy, the last payment made will determine the character. So redheaded stepson better hope that last payment was with H's SP $.
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Wifey used CP $$ to add a hyperbaric chamber to her SP sweat lodge in the desert. What result?
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If CP was used by Wifey to improve Wifey's SP, H has a right of reimbursement for the greater of 1) the CP funds expended or 2) the enhanced value of the sweat lodge. The improvements won't give the community a proportionate share in the sweat lodge though (under the law of fixtures). Lucas doesn't apply here because we only use Lucas when SP is being spent on CP before 1984 and some one gets divorced, or when anyone dies, any year. Get it? GET IT?
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Wifey, in an uncharacteristically unselfish move, uses her SP funds to spruce up the RV with a new coat of paint.
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The ANTI-Lucas statute will kick in: a spouse who makes post- 1984 SP contributions to CP for downpayment, improvement or principal payments on a mortgage will get reimbursement capped at the net value of the RV.
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H and Wifey commingled SP funds with CP earnings in a bank account. Wifey wants to argue the mink stole purchased using money from the commingled account is hers because the total cost of living in the RV exceeded the CP wages H was pulling down from his bowling alley shoe guy job. Can she do this?
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No. No recapitulation accounting is allowed.Wifey can't say that bc their living expenses in the RV exceeded their CP income, all CP funds must have been exhausted and the $$ used to buy the mink were her SP.
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Well then what can Wifey do to prove that the commingled bank account contained her SP funds and that she in fact used those funds to buy the mink stole?
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The burden will be on Wifey as the SP proponent to show that each asset was acquired with SP funds. She has 2 choices:
1) the EXHAUSTION method: if Wifey can show that all the CP was gone, an inference arises that any subsequent purchase was made with SP. 2) Direct tracing: Wifey can try to show "quick in, quick out." There must have been sufficient separate property funds available to make the purchase, and Wifey must have intended to use her SP and not CP to buy the asset. |
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What is the family expense presumpton with regard to commingled bank accounts?
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Expenditures for family expenses are presumed to have been made with CP (even if SP was also available) unless a contrary agreement between the parties can be proven.
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Explain how Van Camp (Valuable Company) accounting would treat the increase in value of a business over the course of a marriage.
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Van Camp is used when SP capital investment was the primary factor in the business' growth. Value the community labor contributed and the rest of the business will be SP.
Start with the value to the community over the years of the operating spouse's services at market rate (not necessarily the same as what they were actually paid) subtract family expenses paid with CP and you have the CP value of the business. The rest is SP. |
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In Van Camp accounting, what do we do with those family expenses?
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Vacuum them out, baby! Family expenses are subtracted from community labor to find the CP value of the company under Van Camp accounting.
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Explain how Pereira (Personal skillz & effort) accounting would treat the increase in value of a business over time?
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When the personal skills and efforts of the managing spouse were the primary cause of the growth or productivity of the business over time, use Pereira. Look at the initial SP capital investment and calculate a reasonable rate of return for that kind of business. Subtract that from the total actual value of the business and the rest is CP!
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What about pension and retirement benefits? Can Wifey get H's bowling alley pension?
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If H's right to receive the bowling alley pension was earned during marriage, then yes. The formula divideds the number of years employed at the bowling alley during the marriage by the total number of years H was working at the bowling alley. The judge can either issue a "when and if received order" or cash Wifey out of the CP share right then and there with assets of equal value.
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What if H is eligible to retire from the bowling alley, but refuses to do so?
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If H is eligible to retire but doesn't, Wifey still has a right to receive her half of the pension.
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What about H's disability payments after that tragic hottubbing incident?
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Disability pay, worker's comp and severance pay, if treated as wage replacement, will be characterized according to what wages they replace: are they designed to replace past CP wages or future lost SP income? Characterize accordingly.
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May H elect to take disability payments rather than retirement benefits, characterizing them as future lost wage replacement and defeating Wifey's CP claim to his retirement pay?
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Sadly for H, no he may not. That wouldn't be equitable, yo! Don't let H elect disability just to thwart the CP system.
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What about stock options earned during employment while married?
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Stock options are CP in proportion to the % earned during the marriage. Use a time formula: (months from date of award of the options to the employee / months from date of the award to the employee to date of exercise.
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What about GOODWILL of a professional practice? Say Wifey has a thriving hypnotherapy practice?
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Good will is CP to the extent derrived from community labor expended during the marriage by the professional spouse. So, we'll take Wifey's net annual return from the hypnotherapy practice and subtract the value of her hypnosis services minus a reasonable rate of return on initial capital investment multiplied by the number of years she operated the practice while married and that wil be the CP value. Whew. That's why an expert usually determines the capitalization of excess earnings attributable to GOODWILL.
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Can H claim a CP interest in Wifey's Hynotherapy degree?
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Education is not property subject to CP division, but if Wifey's education enhanced her earning capacity, the community is entitled to reimbursement unless:
1) it's been at least 10 years and thus the community has already benefittd 2) H also received a community funded education 3) the hynotherapy degree reduced Wifey's need for spousal support Wifey's loans to pay for hypnotist school will be assigned to her as the educated spouse. |
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What if Wifey tortiously whacks H over the head with a frying pan and he sues and recovers a PI award?
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If a tort was between spouses, recovery is SP of the injured spouse.
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What if instead poolboy whacks hubby with that pool strainer thingy poolboys use?
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If the tort was committed by a third party, recovery will be CP but upon divorce the award goes to the injured spouse, unless the interests of justice require otherwise.
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What if H hits poolboy with the Jag while going to pick up a hynotherapy client for Wifey?
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Tortfeasor spouse liability: if the tortfeasor-ing spouse was acting to benefit the community, then first CP assets will be taken to satisfy the award and then H's SP.
If the act was not of benefit to the community, then first the tortfeasor's property and then the CP will satisfy the judgment. |
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Can a judgment creditor reach the innocent spouse's SP?
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A judgment creditor cannot reach the innocent spouse's SP, except for Ks for necessaries (subject to reimbursement if CP funds were available).
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Can CP be reached for pre-marital debt?
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Yes. CP can be reached for pre-marital debt, except that the earnings of the nondebtor spouse cannot be reached if held in a separate account, NEVER commingled and debtor spouse has NO right of withdrawal on the account.
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After divorce, can a creditor reach CP awarded to a nondebtor spouse?
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No, unless that spouse was assigned the debt by the court, a creditor can't reach CP awarded to a nondebtor spouse after divorce.
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Can one spouse acting alone buy, sell, spend and encumber CP?
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Generally, yes. Each spouse has equal management and control of CP and either spouse acting alone can buy, sell, spend and encumber to his or her little heart's content-- subject of course to certain exceptions. (C'mon, this is the LAW ya know.)
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Can a spouse running a CP business act alone in conducting that business? What about selling or encumbering all or substantially all of the personal property used in that business?
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A spouse can act alone in managing a CP business interest substantially run by one operating spouse. However, the innocent spouse has a remedy should that managing spouse sell or substantially encumber the property without first serving written notice to the non-managing spouse.
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Can one spouse dispose of the other's personal belongings?
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No, such a transaction is voidable by the other spouse at any time.
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What is required to convey real property that is also CP?
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Joinder of both spouses is required to convey CP real property. An innocent spouse can set aside the deed and void the transaction, even against a BFP (however, BFP gets consideration back). There is, however, a one year SOL from the date of the conveyance and the innocent spouse has the burden of proof.
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Can 1 spouse encumber his or her 1/2 interest in CP real property?
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No, neither spouse can encumber his or her 1/2 interest in CP real property, except that we lawyers have carved out a real nifty little exception for liens to family law attorneys in divorce actions.
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What is quasi community property?
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Property acquired while the couple was domiciled in a non-CP state which would have been classified as SP had it been acquired under the same circumstances in CA is "quasi-CP."
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How do we treat quasi-CP upon divorce?
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We treat quasi-CP at divorce just like we would treat the real thing. If the real property is located in another state, the court an award the out-of-title spouse other assets of the same value, or order the spouse to sign deed over. Same result for out-of-state land purchased using CP funds.
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How do we treat quasi-CP upon death?
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At death, personal property is treated as CP, but foreign real proerty must be probated per the law of the situs. A non-titled spouse may be entitled to a constructive or resulting trust remedy in equity. A non-titled spouse has no power of disposition over foreign real property that is quasi-CP.
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What about property acquired by shackmates outside the covenant of legal marriage?
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CA does not recognize common law marriage, but will apply general contract law principles and equitable remedies to Marvin v. Marvin type situations.
If a "putative spouse" has a good faith belief that they really are married, but the meretricious jerkwad spouse never actually sent in the license, CA calls that "quasi marital" property and distributes it according to CP principles. |
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What is the remedy for one spouse's breach of fiduciary duty to the other spouse?
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Within 3 years of learning of the breach, or in conjunction with divorce, that innocent spouse can be awarded 1/2 of the amount misappropriated, or if MALICE, OPPRESSION or FRAUD existed, the wronged spouse may get 100% of the misappropriated value.
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When can a judgment of dissolution or MSA be set aside?
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Within 6 months of issuance, set aside permissible for mistake, inadvertance, surprise or neglect. After 6 months set aside will only be awarded for EXTRINSIC fraud.
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How do we characterize property insurance proceeds?
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Property insurance proceeds take on the character of the property they are designed to replace.
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Federal preemption mandates that the following are SP and may not be offset with an award of CP:
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1) Armed forces life insurance
2) Federal disability benefits 3) Social Security payments 4) U.S. Savings bonds |
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Federal preemption does not apply to the following $$ and thus they can be treated as CP and subject to equal division and/or offsetting awards:
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1) Foreign service pensions
2) Military retirement benefits 3) Civil service pensions |
