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33 Cards in this Set
- Front
- Back
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Marital Economic Community
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Begins: At marriage
Ends: * Divorce * Death of spouse * Permanent physical separation with intent not to resume relationship |
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Separate Property
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SP is property acquired:
* Before marriage (including wages not paid until after marriage) * During marriage: gift, bequest, devise or descent * After death, divorce, or permanent separation with intent not to resume |
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Community Property
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Presumptively CP: Property acquired during marriage or temporary separation
Rebutting the Presumption: - Statutory evidence - Written title evidencing gift - Agreement that the property is SP - Purchase funds traced to SP source |
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Qualified Community Property
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QCP is property acquired by either spouse while domiciled in a non-CP state that would have been CP if domiciled in CA at time of execution
* During Marriage in CA: treated as SP (CP to creditors) * On Divorce: CP * Surviving Spouse at Death: 1/2 interest in QCP acquired by other |
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Equal Division Requirement
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Upon divorce, all CP assets are divided equally between spouses based upon an item theory of distribution
EXCEPT: where economic circumstances warrant unequal treatment |
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Equal Division Requirement: Statutory Exceptions
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1. Misappropriation
2. SP debts assigned to debtor spouse 3. Tort liability 4. Personal injury recovery 5. Negative CP: allocates debts per ability to pay |
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Property Distributed by Testamentary Transfer
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A spouse can transfer all of SP and 1/2 of CP by will
Spousal Clawback: Gifts of CP made without spousal consent can be voided to the extent of: - During Life: entire gift - After Death: 1/2 CP interest |
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Property Liable for Debts
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Creditor can reach debtor spouse's SP and all CP for debts incurred before or during marriage
LIMITS: - Separate bank accounts: Non-debtor's CP can't be reached for pre-marriage debts - Necessaries during marriage: both SP and CP available - After divorce: Only spouse who incurred or was assigned debt can be reached |
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Timing of Debt
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Debt is incurred at the time it arises
Torts: Time of tort Contracts: Time of formation Support from Prior Relationship: SP Divorce: Spouse personally liable for debts incurred or assigned to him |
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Right of Reimbursement for Debts
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Non-Debtor spouse can be reimbursed for:
* Support Payments: CP funds used where SP available * Necessaries: SP funds where CP or SP available |
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Creditor's Rights: Torts
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Non-tortfeasor spouse generally not liable for other's torts
EXCEPT: CP is subject to tort liability of either spouse Order of Satisfaction * For benefit of community: CP, then SP * Not for community: SP, then CP |
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Lawful Marriage
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Requirements:
1. Legal capacity 2. Performance of formal legal procedures - EXCEPT: Common law marriages from other states recognized |
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Putative Spouses
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May claim as quasi-marital property where:
1. Good faith belief 2. Based on objectively reasonable grounds 3. To believe she is lawfully married LIMIT: Stops accruing on discovery of invalidity + COUNTER: Estoppel where other continued "cohabitation" (zing!) |
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Division of Out-of-State CP
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Divorce: Realty will be given to one spouse and other spouse will get assets of equal value
Death: Apply probate laws of state where property at |
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Property by Mixed Sources
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Property is presumptively CP if:
1. Purchased with CP + SP 2. Spouses take in joint and equal form |
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Property by Mixed Sources: Pre-1987
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SP contribution presumed to be a gift to community, absent an agreement
Effects: - No SP ownership interest - No claims for reimbursement |
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Property by Mixed Sources: Post-1987
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Presumption that joint and equal title is CP rebuttable by:
- Collateral written agreement - Statement in title: "SP and not CP" EXCEPTIONS: 1. Reimbursement available for - Down payments - Improvements - Principal payments 2. Does not apply to death |
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Property Purchased from Commingled Bank Accounts
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Burden of proof on SP proponent to show SP funds used
Tracing Methods: 1. Exhaustion: CP funds gone after paying family expenses 2. Direct Tracing: At time of purchase, SP funds available and SP proponent intended to use SP funds to purchase Family Expenses: CP then SP * SP payments a gift to community, no right to reimbursement * No recapitulative accounting to show expenses > CP |
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SP Business Enhanced by CP Assets/Labor
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Use either Van Camp or Pereira to calculate CP value of business
Van Camp: Character of business was primary growth factor Pereira: Personal skills of manager spouse increased value |
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Van Camp
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CP Portion = Market salary for managing business - Family expenses paid from business earnings
Factors: - Substantial salary - Large bonuses - Other indicators that community well-compensated |
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Pereira
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SP = Value of business at marriage + Fair rate of return (10%)
Factors: * Spouse worked long hours * Spouse drew a modest salary |
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Right to Reimbursement: CP Funds Used for SP
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Paying Principal: Community acquires a pro-rata ownership to extent CP payments reduce principal
Improvements * CP used for other's SP: Presumed a gift (highly rebuttable) * CP used for own SP: Community can seek reimbursement for costs or increase in property value |
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Property Purchased on Credit
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Treat like cash and presume CP
- EXCEPT: Can rebut by showing intent of lender to rely on borrower's SP in extending credit |
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Conveyances of Real Property
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CP real estate must be conveyed by a joint written agreement
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Prenuptial Agreements
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A valid premarital agreement must be
1. In writing (EXCEPT: full performance, detrimental reliance) 2. Signed 3. In presence of independent legal counsel LIMITS: Unenforceable if 1. Unconscionable and not represented, OR 2. Promotes divorce |
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Transmutations
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Before 1985: Oral transmutations enforceable, whether express or iplied
After 1985: Agreements altering character of the property must be 1. In writing 2. Signed by adversely affected party 3. Expressly state that change in ownership being made |
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Co-Ownership Presumptions
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"to H+W"
- Pre 1975: Joint tenancy - Post 1975: Community property "to W" - Pre 1975: Presumptively W's SP - Post 1975: Gift only if from other spouse "to W + 3rd Party": H has no interest |
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Tort Recoveries: Presumptions and Effect of Divorce
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Injury before or after marriage: SP
- COUNTER: Community subject to reimbursement for expenses Injury during marriage: CP - EXCEPT: SP where received against spouse At Divorce: Recharacterized to SP if 1) Not already spent or commingled, and 2) Interests of justice not opposed |
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Education: Presumptions and Effect of Divorce
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Education is not a community asset, but community entitled to right of reimbursement if
1. CP funds used 2. Substantially increased earning capacity 3. No waiver by signed agreement Defenses: 1. > 10 years have passed => community has benefited 2. Other also received education from CP funds 3. Education reduced need for spousal support |
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Stock Options and Pension Benefits: Presumption and Effect of Divorce
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Whatever received during marriage is CP, apportioned by time rule
Options if Assets Unvested 1. Pay benefits when and if received 2. Cash out other spouse 3. Retain jurisdiction |
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Disability Benefits: Presumptions and Effect of Divorce
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Treated as wage replacement
* Received during marriage: CP * Replaces Wages Post-divorce: SP * Substitute for Retirement: CP |
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Life Insurance Benefits
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Whole Life Insurance
* Death, Paid with CP: Beneficiary + spouse split 50/50 * Death, Paid SP+CP: CP reduced by proportion of SP payments * Divorce: CP in proportion Term Insurance: * Death: Apportion by payments or determine by source of final payment * Divorce: No value, so SP |
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Goodwill
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Qualities that generate income beyond that derived by labor and return on capital
Created during marriage: CP Valuation Techniques: 1. Market sales valuation 2. Capitalization of past excess earnings attributable to goodwill |
