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141 Cards in this Set

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What is the first/basic rule in Community Property?
Absent an agreement to the contrary, all property acquired during marriage by the labor of either spouse is community property.
What is characterization?
Characterization is the process of determining whether an item of property is a spouse’s separate property (“SP”) or community property (“CP”).
Why is the time an asset acquired important?
CP may only be acquired during the existence of the marital economic community. Property owned before marriage or acquired after permanent separation is SP.
What times mark the Beginning and End of the Marital Economic Community?
The marital economic community begins at marriage and ends at one spouse’s death, or when H and W effect a permanent physical separation (i.e., actual separation and an intent not to resume the marital relationship).
What about wages earned before marriage but received during marriage?
Wages earned before marriage but received during marriage are the earner’s SP unless he takes some action to change the character of those earnings.
~ Similarly, wages earned during marriage but received after separation are CP.
What about the SOURCE OF ACQUISITION - what types of property are SP?
The following property acquired during marriage is a spouse’s SP: (i) property received by gift, bequest, devise, or descent;
(ii) rents, issues, and profits of SP acquired before or during mar­riage; and
(iii) property acquired in exchange for separate property.
How about Out-of-state realty?
Out-of-state realty is included within the definition of CP. Proof that an asset was acquired during marriage only raises a presumption that the asset is CP. The presumption is overcome by showing that the property was acquired by gift or is the fruit of SP, or by tracing the acquisition back to an SP source.
What is the classification of a Personal Injury Recovery Against Third-Party Tortfeasor?
If a cause of action arises during marriage, any recovery is CP. A cause of action arises when the injury is inflicted. A cause of action that arises after permanent separation is the injured spouse’s SP, but the injured spouse must reimburse the community or the other spouse’s separate estate for any expenses paid on account of the injury.
What is the characterization of Retirement Pensions?
California treats unvested as well as vested retirement pensions as CP to the extent that the right to benefits was earned during marriage. It is immaterial that benefits are in fact re­ceived after divorce. To the extent that the original pension was earned during marriage, a reinstated pension is a community asset.
How do courts determine the apportionment of CP and SP as it relates to retirement pensions?
Courts apply a “time rule” to apportion the separate and community interests of a pension earned both during and after marriage.
~ When the pensionable spouse is eligible to retire but does not, the divorce court may order a private employer to pay the nonemployee spouse her share of benefits as though the worker had in fact retired. The worker himself may be ordered to pay if he has a public employer.
How about the characterization of Disability Pay and Workers’ Compensation?
~ To the extent that disability pay and workers’ compensation are intended to replace marital earnings, they are CP.

~ To the extent that they are intended to replace separate postdivorce earnings, they are SP. it is immaterial that the right to receive benefits may have been earned during marriage.
How about When a Worker Eligible for Retirement Pension Elects Disability Pay instead?
California requires that disability pay be treated as CP to the extent that it replaces a com­munity interest in an old-age retirement pension the retired worker would have received had he not elected to receive disability pay instead.
How about Severance Pay?
When severance pay resembles a retirement pension, it has been treated as CP (because it was earned by marital labor), but when severance pay is intended to sustain the worker for a short time until his next job, it has been analogized to disability pay and treated as SP (because it replaces postdivorce lost wages).
How about Stock Options?
In Marriage of Hug, the court treated options as earned from the time the employee began to work for the company rather than merely during the year in which they were exercisable, and the court applied the pension “time rule” to determine the community interest in the options.
How about Business and Professional Goodwill?
To the extent that goodwill is earned during marriage, California treats it as CP.
How about Education and Training?
Education and training earned during marriage are Not CP but there is a Right of Reimbursement (at divorce).
~ unless the parties sign an agreement to the contrary, there is an equitable right of reimbursement with interest to the community when: (i) community funds are used either to pay for education or training or to repay a loan related thereto, and (ii) educa­tion or training substantially enhances the earning capacity of the party.
~ Loans still outstanding at divorce shall be assigned solely to the educated spouse. Reimbursable expenses only include direct education expenses, but debt assignment with respect to loans may include loans incurred for living expenses as well.
What are the Equitable Defenses to the Reimbursement Duty?
Equitable defenses to reimbursement duty include: (i) the community has already substantially benefited from education or training (e.g., more than 10 years have passed between contributions and divorce); (ii) the other spouse has received community-funded education; and (iii) the need for spousal support is reduced as a result of educa­tion or training.
How about Life Insurance - for proceeds paid at death, when the deceased names a beneficiary other than the surviving spouse?
For a community-funded policy, if the deceased spouse has named a beneficiary other than the surviving spouse, the named beneficiary receives the deceased spouse’s one-half community interest in the policy and the surviving spouse takes a one-half interest.
~ Whole life insurance proceeds have been treated as CP in proportion to the percentage of premiums paid by the community.
How about Life Insurance - for proceeds paid at divorce?
To the extent a policy has a current cash value (whole life), that cash value is CP in proportion as the community paid the premiums. Term insurance has no cash value. Consequently, most courts now hold that term insurance has no value at divorce.
How about Property Insurance Proceeds?
Property insurance proceeds from a casualty to one spouse’s SP remain SP even though the community paid the insurance premiums on the property. The community may, however, have a claim for reimbursement of the community funds that paid the premiums.
What is the General Presumption of CP?
All property acquired during marriage is presumed to be CP. A showing of possession during marriage may imply acquisition during marriage.
~ The presumption is inapplicable as to property to which legal or equitable title is held by a person at the time of his death, if the marriage during which that property was acquired was terminated by divorce more than four years prior to such death.
How is the CP Presumption overcome as to an Asset Acquired During Marriage (5 ways)?
CP presumption may be overcome by showing any of the following facts: (i) statutory facts
(i.e., asset was acquired by gift, bequest, devise, or descent, or was rent or income from SP);
(ii) the parties took written title to the asset in a manner (e.g., joint tenancy) that shows that
the parties agreed to hold it other than as CP; (iii) the parties agreed that the property would not be community property ; (iv) one spouse took title in a form that evidences a gift to the other spouse; or (v) the purchase funds are traced to an SP source, in which case the separate estate is an owner in proportion to its contribution to the purchase price.
What is the Statute of Frauds Requirement for premarital (antenuptial) Agreements?
There must be a writing signed by both parties.
When may an oral permarital agreement be enforced (2 ways)?
However, an oral premarital agreement may be enforced when: (i) the executory promise was fully executed (i.e., the promisor has actually performed his promise); or (ii) the promisor is estopped to assert the Statute of Frauds (i.e., when the promisee has relied to her detriment on the oral pre­marital agreement).
What are the Circumstances that Render Premarital Agreements Unenforceable?
A premari­tal contract is unenforceable if: (i) it was unconscionable when executed, and (ii) the burdened party did not have adequate disclosure of the other party’s wealth.
~ Premarital agreements may not promote divorce (i.e., include terms that provide a spouse with a positive incentive to seek a divorce) and must be voluntary (i.e., the parties must understand what they are giving up and must have had time for deliberation).
Are a Waiver of Death Rights Enforceable?
Yes, A waiver of death rights contained in a valid premarital agreement is enforceable even if it does not satisfy Probate Code requirements.
What is transmutation?
A doctrine relating to the spousal transforma­tion of the character of property.
What is the rule as to Agreements Made by Spouses During Marriage?
transmutations made on or after January 1, 1985, must be evidenced by an express declaration in a writing signed or accepted by the spouse whose interest is adversely affected.
~ How­ever, the express declaration requirement does not apply to a nonprobate beneficiary designation, for which spousal consent will be deemed valid and irrevocable at the death of either spouse.
~ Also, the writing requirement does not extend to a gift between spouses of items of a personal nature that are, taking into account the parties’ wealth, insubstantial in value.
Are Agreements Not Involving Property enforceable?
No, Except for property rights, a husband and wife may not contractually alter their legal obligations to each other (e.g., the duty to care for an invalid spouse).
What are the Ways a Married Couple May Jointly Hold Property?
In California, a married couple may jointly hold property (i) in a joint tenancy, (ii) in a tenancy in common, (iii) as CP, or (iv) as “community property with a right of survi­vorship.”
What does owning as Joint Tenants mean for H and W?
H and W each own an undivided one-half interest (each one-half interest is an SP interest) and the survivor of the two automatically becomes the owner of the decedent’s interest as well as his own.
What does a Tenancy in Common mean for a H and W?
Tenants in common possess equal proportional ownership interests in the asset. There is no right of survivorship.
What is Community Property?
CP is a form of title in which each spouse owns an undivided one-half interest and neither spouse can partition the whole.
What is Community Property with a Right of Survivorship?
Property taken as community property with a right of survivorship has all the attributes of ordinary community property, except that at the death of a spouse, the decedent’s half-interest passes to the surviving spouse just as joint tenancy with right of survivorship does.
What is the Married Woman’s Special Presumption?
When written title to property was placed in a married woman’s name before 1975, that property was presumptively the married woman’s SP.
~ If property was taken in tenancy in common title by persons who were in fact married, W took her one-half interest as her SP and H took his one-half interest as CP.
~ Joint tenancy and CP title were deemed to avoid the married woman’s special presumption.
How is the Married Woman's Special Presumption overcome?
When a good faith purchaser has relied upon pre-1975 title in a married woman’s name, the presumption of title is irrebuttable as against the good faith purchaser. As between H and W, H may rebut the presumption by showing that he did not put title in W’s name or that he did not intend to make a gift to W when he put title in her name.
What is the Significance of the Presumption Today?
Even today, a reasonable inference, in the absence of evidence to the contrary, is that when one spouse purchases property and puts title in the other spouse’s name alone, the purchaser intended a gift to the titled spouse.
What is the presumption when spouses take in joint and equal form but contribute disproportionately to the purchase price?
The 1980 Lucas case held that the act of taking title in a joint and equal form is inconsistent with preservation of a separate interest. The SP contributor is presumed to have made a gift.
When does the Lucas gift presumption still apply?
The Lucas gift presumption remains entirely operative when a marriage ends in death.
What is the presumption re property held by spouses in joint form today?
All property held by spouses in joint form is presumptively CP for purposes of distribution at divorce or legal separation.
~ The presumption can be overcome only by a collateral agreement or a statement in documentary evidence of title that the property is SP and not CP.
What is the reimbursement rule re jointly held property?
If jointly titled property is CP, at divorce the SP contributions to the acquisition of the property will be reimbursed to the SP contributor without interest or appreciation.
How about when there is a Death During Divorce Proceedings?
When an ex-spouse has died between the time of the divorce decree and the division of property, the statute applies: joint property is presumptively CP.
What is the presuption re family expenses?
Available community funds are presumed to have been used to pay for family expenses.
How about when SP is used to pay for family expenses?
Absent evidence of a reimbursement agreement, a gift is presumed when separate funds are used to pay family expenses.
What are the two permissible tracing methods?
The exhaustion method and direct tracing.
What is the Exhaustion Method of tracing?
At the time the asset was purchased, community funds in the account had already been exhausted by payment of family expenses, and therefore the asset must have been purchased with separate funds.
What is Direct Tracing?
At the time the asset was purchased, there were separate funds available, and the SP proponent intended to use those separate funds to purchase an SP asset.
What is the Consequence of a Failure to Trace?
If the SP proponent fails to trace, the entire commingled account and assets purchased from the account will be treated as CP.
What is recapitulative accounting, and how does it relate to the SP proponent?
The SP proponent may not simply show that total family expenses exceeded total commu­nity income and conclude that all remaining funds and assets purchased from the com­mingled account are her SP.
What is the presumption When Commingled Account Is Jointly Titled?
Probate Code section 5305 provides that the contents of a bank account held jointly by married persons is presumptively CP, but this presumption may be overcome by tracing one spouse’s SP (unless married persons expressly agree that such sums will be their CP)
What is Van Camp Accounting?
It is a way to Apportion Business Profits between SP and CP.

~ The manager’s services are valued at the going market salary. The amount of family expenses that were paid from business earnings are then subtracted. The remainder, if any, represents the community portion of the business. The rest of the business is separate.
How is Pereira Accounting computed?
The SP consists of the manager’s separate capital plus a fair rate of return thereon (e.g., 10% of principal x 10 years). The remainder is CP.
How do you decide Whether to Use Van Camp or Pereira accounting?
Pereira should generally be used when the management of the spouse was the primary cause of the growth or productivity of the separate business.
~ Van Camp should gener­ally be used when the character of the separate business is largely responsible for its growth or productivity.
What is the characterization when Community Payments are used to Pay Off the Purchase Price of SP?
The community establishes a proportional ownership interest to the extent that community mortgage payments reduce the principal debt.
~ ex., If W purchased a house for $100,000, and community mortgage payments reduced principal debt by $20,000, the community would be a one-fifth owner of the home, and W’s separate estate would be a four-fifths owner. Appreciation is allocated in proportion to each estate’s ownership interest.
What is the rule When the Community Improves One Spouse’s Separate Realty?
Absent an agreement to reimburse, a gift is presumed when one spouse uses commu­nity funds to improve the other spouse’s separate estate.
What about when Community Funds are Used to Improve one's Own SP?
When a spouse uses community funds to improve his own SP, no gift is presumed. The community is entitled to either reimbursement of the cost of the improvement or the amount by which the improvement increased the value of the realty, whichever is greater.
How about Purchases Made with Borrowed Funds, for example, If a couple purchases an untitled asset with both H’s separate funds (20%), and proceeds of a community bank loan (80%)?
the asset would be 20% H’s SP and 80% CP.
What is the rule as to credit acquired by one spouse during the marriage?
Credit acquired by one spouse during marriage is presumptively community credit.
How would a borrowing spouse demonstrate that the loan proceeds or credit purchases are his SP?
To demonstrate that loan proceeds or credit purchases are his SP, the borrowing spouse must demonstrate that the lender primarily relied on the borrower’s SP in granting the loan or extending the credit.
~ No apportionment is made of the loan itself. Loan proceeds or credit are either community or separate, but apportionment may be made of the asset.
~ “Personal credit” of either spouse during marriage is CP insofar as it is based on earning capacity.
What is the jurisdiction of the divorce court?
The divorce court has the power to divide all CP and, at the request of either party, jointly titled SP.
~ The SP that is not jointly titled may be distributed by the court only if both parties request such a distribution.
What is the Equal Division Requirement?
Each spouse is entitled to a one-half interest in each community asset (in-kind division).
When can there be a Deviation from In-Kind Division?
Where economic circumstances warrant, the court may award any asset of the community estate to one party on such conditions as it deems proper to effect a substantially equal division of the community estate. For example, the loss of the family home would uproot the couple’s minor children, or the asset is intimately related to one spouse.
When can there be a Deviation from the Equal Division Requirement?
Where One Spouse Deliberately Misappropriates CP - Each spouse is required to act in accordance with the general rules governing fiduciary relationships with respect to the other spouse in management and control of CP. One spouse’s deliberate misappropriation of the other spouse’s interest in CP or quasi-CP may result in a court award or offset against the wrongdoer’s one-half share of the remaining property.
What is the rule Where Liabilities Exceed Assets?
Assets and liabilities are tallied and net division must be equal. But when liabilities exceed assets, an unequal division of the excess may be made, taking into account the parties relative ability to pay the debts.
What is the rule When One Spouse Has Incurred Educational Debts?
Unpaid education debts are treated as the recipient’s separate debt and are excluded horn the equal division of assets and liabilities.
What is the rule on division When One Spouse Has Incurred a Tort Liability?
A tort liability incurred by a party and not based upon an activity for the benefit of the community is assigned, without offset, to the tortfeasor spouse.
What is the rule re division When Separate Debt Has Been Incurred?
Separate debts (debts incurred before marriage, after separation, or not for the com­munities benefit) are assigned to the debtor spouse.
What is the rule re division When One Spouse Receives Community Estate Personal Injury Damages?
A community estate personal injury recovery is awarded entirety to the injured spouse unless the interests of justice require otherwise. In no event will the injured spouse receive less than one-half.
When are assets and liabilities valued?
Assets and liabilities are valued as near to the time of trial as practicable.
~ However, a spouse-managed business or professional practice in which the primary asset is accounts receivable should be valued at the time of permanent separation rather than trial.
Are Transfers Between Husband and Wife Taxable Events?
No, Transfers of property between spouses pursuant to divorce are no longer treated as taxable events.
At divorce, What are the Tax Consequences of Sale of Community Assets to Third Parties?
The court must apportion direct tax liability incurred, if any, equally to both spouses. The court must ignore speculative and uncertain tax consequences - e.g., present value of a pension may not be discounted by the amount of income tax the worker will be required to pay on benefits as she receives them.
What is the rule re Community assets not listed in the divorce pleadings?
Community assets not listed in the divorce pleadings or those not distributed by the decree are subject to future litigation. A divorce decree may provide that it represents a final settlement of all claims.
~ The courts have differed as to whether such provision bars a postjudgment motion to distribute an omitted asset.
When may A decree be set aside?
A decree may be set aside when there has been extrinsic fraud (i.e., culpable behavior of adversary) or extrinsic mistake (i.e., excusable neglect of claimant). Relief has generally been denied, however, for intrinsic fraud. Intrinsic fraud involves error that the claimant, with the exercise of due diligence, could have guarded against. Yet recent legislation pro­vides that uncontested judgments may be set aside within one year on the ground of mutual or unilateral mistake.
What is the result of a Breach of Fiduciary Duty by one spouse?
Fiduciary duty continues after the marriage has broken down because it is based on the de facto control the managing spouse exercises over CP partly owned by the other spouse. Breach of duty will void the property settlement agreement. Fiduciary duty persists until CP is divided by a court.
What does the fiduciary duty entail?
The fiduciary duty includes the obligation to make full disclosure to the other spouse of the existence of assets in which the community has an interest and debts for which the community may be liable and to provide equal access to all records pertaining to the value of such assets. A spouse may have a cause of action against the other spouse for breach of fiduciary duty.
Regarding the distribution of CP and SP at death, what is the general rule re testamentary transfers?
A married person may transfer one-half of CP and all of his SP by will. The surviving spouse already owns the other half of CP.
What is the rule re Unauthorized Inter Vivos Gifts of CP?
One spouse may not make an inter vivos gift of CP without written consent of the other spouse. But at the death of the donor spouse, the unauthorized inter vivos gift, if it has not been voided by the nonconsenting spouse during the donor spouse’s lifetime, is treated as a valid testamentary transfer of the donor’s one-half interest in CP.
What if the unauthorized inter vivos gift has not been voided by the nonconsenting spouse during the donor spouse’s lifetime?
If it has not been voided by the nonconsenting spouse during the donor spouse’s lifetime, the gift is treated as a valid testamentary transfer of the donor’s one-half interest in CP (i.e. this is treated as a testamentary transfer).
What is the rule re the Designation of a Third-Party Insurance Beneficiary?
A community-funded life insurance policy is CP. The deceased insured spouse is deemed to have made a testamentary transfer to a third-party beneficiary (other than his spouse) of his one-half interest in CP insurance proceeds.
What is the Item Theory of Death Distribution?
The surviving spouse is entitled to one-half of each item of CP. Unless she consents, her CP claims are not satisfied by one-half of the aggregate of CP.
What is the Survivor’s Duty to Elect?
A testator may insert a clause in his will stating that his surviving spouse must either elect to take under the terms of the will or assert her CP ownership rights.
What is the rule when there is no specific election clause?
When there is no explicit election clause, a surviving spouse may assert both her CP rights and her rights under the decedent spouse’s will as long as this behavior would not upset the decedent’s testamentary plan.
What happens when the decedent's will attempts to pass the survivor's one-half interest in CP?
The surviving spouse must elect between the will and her CP rights when the decedent’s will attempts to pass the survivor’s one-half interest in CP.
What happens to property that doesn't pass by will or testamentary substitute?
All property that is not transferred by will or testamentary substitute passes by intestacy.
What happens to the intestate decedent's CP and QCP when he dies intestate?
An intestate decedent’s one-half of CP and QCP passes to the surviving spouse, leaving the surviving spouse with 100% of the CP and QCP.
What happens to a Decedent’s SP when he dies intestate?
An intestate decedent’s SP passes in whole or in part to the surviving spouse according to three statutory formulas:

(i) all to the surviving spouse when the decedent has left no surviving issue (kids), parent, brother, sister, or issue of a deceased brother or sister (nephews or nieces);

(ii) one-half to the surviving spouse when the decedent leaves only one child or issue of a deceased child, or: no issue, but a parent or parents, or their issue, or issue of either of them; or

(iii) one-third to the surviving spouse when the decedent leaves more than one living child, or one living child and issue of one or more deceased children, or issue of two or more deceased children.
What is the Ancestral Property Intestate Succession Statute?
When a surviving spouse dies intestate and leaves neither a living spouse (no remarriage) nor issue, realty derived from her predeceased spouse is sent back to his family line pro­vided the predeceased spouse died not more than 15 years before decedent. A similar rule applies to personalty worth $10,000 or more when the predeceased spouse died not more than five years before decedent.
What is Quasi-Community Property?
QCP is property acquired by either spouse that would have been CP had the spouse been domiciled in CA at the time of the acquisition. QCP retains its SP nature when the parties become domiciled in CA. The QCP label only becomes significant at divorce or death.
What happens to QCP At Divorce?
At divorce, QCP is treated exactly as though it were CP. Property may be treated as QCP even though one spouse is not domiciled in CA.
What happens to QCP At Death?
The survivor has a one-half interest in decedent’s QCP. Decedent has no rights in the survivor’s QCP.
What happens If, prior to his death, a decedent who died domiciled in California transferred his quasi-CP to a third party for less than substantial consideration and without his surviving spouse’s consent?
If, prior to his death, a decedent who died domiciled in California transferred his quasi-CP to a third party for less than substantial consideration and without his surviving spouse’s consent, the surviving spouse may compel the third party to restore one-half the property (or its value) to decedent’s estate if, at the time of his death, decedent reserved any of the following rights in the property: (i) right to income; (ii) power to revoke, consume, invade, or dispose of principal for decedent’s own benefit; or (iii) right of survivorship.
What happens to Property Acquired When Spouse is Domiciled in Another CP Jurisdiction?
For purposes of death only, property acquired in another CP jurisdiction is treated as California CP and not as quasi-CP.
May a creditor may reach one spouse’s quasi-CP to satisfy a debt incurred by the other spouse?
A creditor may reach one spouse’s quasi-CP to satisfy a debt incurred by the other spouse. This is of questionable constitutionality. With the exception of debt collection, quasi-CP is still treated as the acquiring spouse’s SP during marriage. [check to see if this is still true].
What may the divorce court do re CP and QCP?
A California divorce court has the power to distribute all community and quasi-community out-of-state realty. If CP or quasi-CP to be divided at divorce includes real property situated in another state, the California trial court will:
a. Divide all CP and quasi-CP in such a way that it is not necessary to alter the nature of the interests held in the out-of-state realty; or
b. If this is not possible, either: (i) require the parties to execute whatever conveyances are necessary to divide the out-of-state realty, or (ii) award to the party who would have benefited from the conveyance the money value of her interest.
How is out-of-state property probated at death?
Out-of-state realty is normally probated in ancillary administration in the state in which the realty is located according to the laws of that jurisdiction. When a spouse owning out-of-state realty that would be CP or quasi-CP if it were located in California exchanges that realty for personalty or for California realty, the new property is CP or quasi-CP, as the case may be.
How about when decedent dies out of California but has property in CA?
California applies the law of decedent’s domicile to disposition of his California realty.
What are the requirements for a lawful marriage?
In California, a lawful marriage requires both legal capacity and performance of formal legal procedures; i.e., a witnessed ceremonial marriage that is licensed or registered. California does not recognize common law marriages purportedly contracted within California.
Does CA recognize common law marriages from other jurisdictions?
California does recognize common law marriages contracted in jurisdictions that continue to recognize them.
What is a putative spouse?
A putative spouse is not lawfully married, but has a good faith belief based on objectively rea­sonable grounds that she is lawfully married.
When does a putative spouse lose her putative spouse rights?
Once she learns that her marriage is invalid (e.g., because of a prior undissolved marriage), she no longer accrues putative spouse property rights.
What are a putative spouse's property rights?
A putative spouse has almost the same property rights as a lawful spouse (i.e., same rights in CP or quasi-CP and in her partner’s SP). Private contractual benefits may, however, be limited to lawfully married spouses. When only one partner is a good faith putative spouse, it is not clear whether the non-good faith spouse may make any claim to quasi-marital property accumulated by the good faith spouse. However, when a claim to putative spouse status could possibly fail because the claimant knew that her marriage was invalid, the claimant may still prevail on the basis of estoppel if the other spouse also knew the marriage was invalid but nevertheless contin­ued to enjoy the benefits of cohabitation.
What happens when a decedent leaves both a putative and a lawful spouse?
When a decedent has left both a lawful and a putative spouse, courts have equitably divided the decedent’s estate between them.
What is CA's stance re unmarried cohabitatants?
California applies general contract principles. If there is no express contract, a party may prove a contract implied by the behavior of the parties and may employ the doctrine of quantum meruit and apply equitable remedies such as a constructive or resulting trust.
~ With respect to claims against third parties and the government, cohabitants have no legal basis for asserting rights that flow from marital status. Even if the cohabitants later marry, these contract principles will apply for property acquired during cohabitation. If they later divorce, only property acquired during marriage is distributed according to community property rules.
Who has control of SP?
Each spouse has the exclusive management and control of his SP. Quasi-CP is SP for purposes of management and control.
Who has control over CP?
Subject to certain exceptions, each spouse has equal management and control of CP (whenever acquired).
Who may sell, encumber, CP?
Either spouse acting alone may buy, sell, spend, or encumber all CP.
What is the rule as to control of Community RP?
Both spouses must join in executing any instrument by which community real property is sold, conveyed, or leased for more than a year.
What about when CP is titled in one spouse's name only and that spouse misrepresents his marital status to an innocent transferee?
When CP is titled in one spouse's name only and that spouse misrepresents his marital status to an innocent transferee, the nonconsenting spouse has one year in which to bring an action to void the transfer.
~ Transfer to good faith purchasers are presumed valid. The nonconsenting spouse may overcome the presumption by demonstrating that she did not in any way consent to, or participate in, the transfer. She may then void the conveyance and must return the transferee’s purchase price. The nonconsenting spouse also may entirely void any security interest in CP granted to the creditor by the other spouse (except for a family law attorney’s real property lien). Note, however, that the debt underlying the security interest remains intact.
What is the exception to the rule that either party may act alone relating to Personal Property?
There is a Personal Belongings Exception:

The dwelling or CP household furnishings or clothing of a spouse or minor children may not be transferred without the written consent of the other spouse. The nonconsenting spouse may void such a transfer in its entirety at any time during or after the marriage and need not return the transferee’s purchase price.
What is the exception to the rule that either party may act alone relating to spouses business?
A spouse who is operating a business or an interest in a business that is all or substan­tially all community personal property has primary (rather than sole) management and control of the business or interest.
How may a spouse act related to his business and what is his obligation re major business changes?
the managing spouse may act alone in all transactions, but shall give prior written notice to the other spouse of any sale, lease, or exchange of all, or substantially all, of the personal property used in the operation of the business.
What are the non-owner spouse's remedies re a sale as to which she was not notified?
If the required notice is not given, the nonmanaging spouse has a remedy only if the managing spouse’s behavior has substantially impaired her one-half interest in the community estate. The nonmanaging spouse may not void the transfer.
What is the rule re the control of A bank account in the name of a married person?
A bank account in the name of a married person is held for the exclusive benefit of that person and is free from the control or lien of any other person except a creditor. The bank is held harmless against all claims by the depositor’s spouse.
What is the rule re gifts of CP made by one spouse?
A spouse may not make a gift of community personal property without the written consent of the other spouse. The nondonor spouse may ratify the gift through a sepa­rate writing. During the donor’s lifetime, the nonconsenting spouse may revoke the gift in its entirety.
What is the non-consenting spouse's remedy re an unauthorized gift of CP?
During the donor’s lifetime, the nonconsenting spouse may revoke the gift in its entirety. Once the donor dies, the nonconsenting spouse or her estate may recover her one-half interest in the unauthorized gift against the donee or the donor’s estate.
What is the Fiduciary Duty re management of CP?
Each spouse must act in the highest good faith and fair dealing with respect to the other spouse in the management and control of CP.
What is the duty of the managing spouse?
The managing spouse must act in good faith, but mere incompetence is not action­able. Good faith requires a full accounting to the nonmanager when requested and securing the consent of the nonmanager before committing certain acts, such as conveying or encumbering the family dwelling or furnishings.
What are the remedies of the non-breaching spouse for mismanagement by the managing spouse?
The nonmanaging spouse has a claim against the managing spouse if there is a breach of fiduciary duty that results in substantial impairment of the nonmanager’s interest. The nonmanager may also seek an order for accounting and reformation of title to reflect the nonmanager’s interest.
~ note that the latter two remedies probably are available even when the managing spouse is doing a good job.
~ note that actions must be commenced within three years after the date the nonmanager had actual knowledge of the act of which she complains. However, an action may be brought at a spouse’s death or in conjunction with divorce regardless of the three-year limitation.
What determines a creditor's rights, generally?
Creditors' rights follow management rights - A creditor may reach any property over which the debtor has the legal right of management and control.
For purposes of creditors’ rights, how is quasi-CP treated?
For purposes of creditors’ rights, quasi-CP is treated as though it were CP.
When is a contract debt incurred?
A contract debt is incurred at the time the contract is made. A tort debt is incurred at the time the tort occurs. A spouse’s child support and spousal support obligations from prior relationships are treated as debts incurred before marriage. In all other cases, a debt is incurred at the time the obligation arises.
What property is liable for debts?
All CP and the debtor’s SP are liable for a debt she incurred before or during marriage.
When may the non-debtor spouse's CP earnings not be reachable?
CP earnings of the nondebtor spouse are not liable for the debtor’s premarital obligation only as long as those earnings are held in a deposit account in which the debtor spouse has no right of withdrawal.
What is the liability of one spouse for necessaries of the other spouse?
When one spouse incurs a debt for “necessaries’ during marriage, the other spouse is personally liable for the debt. Absent a separation agree­ment, personal liability for necessaries remains after the parties are separated.
What about When a married person joins in an encumbrance of CP to secure a debt incurred by a spouse?
When a married person joins in an encumbrance of CP to secure a debt incurred by a spouse, the person’s SP is not liable for the debt unless the person also incurred the debt.
What is the rule re liability for a spouse's tort?
A person is not liable for her spouse’s torts except in cases where she would be liable for them if the marriage did not exist.
What is the rule re liability when a tort occurred while the married person was performing an activity for the benefit of the community?
If the liability of one spouse for death or injury to a person or property is based on an act or omission that occurred while the married person was performing an activity for the benefit of the community, liability shall first be satisfied from CP and second from the SP of the married person.
What if the tort occurred while not performing an activity for the benefit of the community?
If liability is not based on an activity for the benefit of the community, liability shall first be satisfied from the SP of the married person and second from CP.
~ Note that this order of satisfaction does not apply to the extent that liability is satisfied out of insurance proceeds. If the order of satisfaction is not followed, the spouse injured thereby may seek reimbursement from the other spouse.
What result When a spouse’s property is applied to satisfy a debt assigned, at divorce, to the other spouse?
When a spouse’s property is applied to satisfy a debt assigned to the other spouse, he has a right to reimbursement of the amount applied, with interest, from the other spouse.
Re Creditors' rights at the death of a spouse, When Property Passes Through Probate (Administration), what does The Probate Code require?
The Probate Code requires contribution from the community and separate estates of both spouses that are liable for the debt in proportion to the value of the estates. Any right of reimbursement had the debt been paid off will adjust the apportionment.
Re Creditors' rights at the death of a spouse, how about When Property Passes does not pass Through Probate (Administration)?
Unless the survivor or the decedent’s estate affirmatively elects formal administration, the set-aside law controls. When property passes without administration under the set-aside law, the surviving spouse is “personally liable” for debts chargeable against CP. quasi-CP, and decedent’s SP that pass to the surviving spouse without administration.
What result when CP is applied to satisfy child support or spousal support claims arising out of a prior relationship and the debtor had SP available to pay the debt?
The non-debtor spouse here may seek reimbursement against the debtor spouse.
How about when one spouse’s SP was applied to debts incurred by the other spouse for necessaries and the debtor had SP or CP available to pay the debt?
Again, right of reimbursement
How about when the order of satisfaction for tort debts is not followed?
Again, right of reimbursement
For statutory reimbursement, what is the measure of reimbursement?
The measure of reimbursement is the value of the property applied at the time the right arose.
~ Note The right must be exercised: (i) within three years after the spouse in whose favor the right arises has actual knowledge of the application of property to the satisfaction of the debt, or (ii) in divorce or death proceedings.
What are some of the other case law and statutory reimbursement rights?
Other reimbursement rights relate to: (i) debts paid after separation but prior to trial, (ii) unautho­rized gifts, (iii) when one spouse has contributed SP to the purchase or improvement of CP, (iv) when one spouse has used CP to improve his own SP, and (v) educational expenses and loans.
What are the Areas in which federal law preempts California CP law?
Areas in which federal law preempts California CP law include: (i) federal homestead law; (ii) armed forces life insurance benefits; (iii) U.S. savings bonds (unless there is fraud or breach of trust on the part of the spouse managing the CP funds); and (iv) Social Security benefits.
How about Supplemental railroad retirement benefits?
Supplemental railroad retirement benefits are subject to state law CP distribution.
How about federal military retirement benefits?
The Uniformed Services Former Spouses’ Protection Act (“USFSFA”) permits a state court to treat federal military retirement benefits as either SP or CP in accordance with state law.
How about federal military and veterans administration disability benefits received after permanent separation?
Federal preemption requires that California treat federal military and veterans administration disability benefits received after permanent separation as the worker’s SP. Even when a retired serviceperson elects to take military disability benefits instead of retirement benefits to which she would otherwise be entitled, the USFSPA does not allow the benefits to be treated as CP.
How about Federal civil service and foreign service retirement pay?
Federal civil service and foreign service retirement pay are divisible according to California CP law. While the Employment Retirement Income Security Act (“ERISA”), which regulates private sector pensions, permits a CP distribution upon divorce of an ERISA-regulated pension earned during marriage, the law’s anti-assignment provisions prohibit the testamentary transfer by a nondivorced deceased spouse of her CP interest in her surviving spouse’s pension.
~ note that Federal copyright law does not preempt California CP division of copyright proceeds.