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107 Cards in this Set

  • Front
  • Back
What are the four types of SEPARATE PROPERTY?
1) Property acquired before marriage.
2) Property acquired during marriage using separate funds.
3) Property acquired during marriage from inheritance/ gift/ will.
4) Rent or profits from separate property.
What is the definition of COMMUNITY PROPERTY?
Property other than separate property, acquired by either spouse during marriage.
Examples: income or bonus paid to a spouse; rental income from community property.
What is the COMMUNITY PROPERTY PRESUMPTION?
Unless shown otherwise, an asset acquired during marriage is presumed to be community property.
Is California a community property state?
YES. Also Texas.
Does community property law apply to same-sex couples?
Only if they are in a registered partnership (= "domestic partners"), or got married during the brief period in 2008 when same-sex marriage was allowed in California.
What two factors are needed to end the "economic community" of a marriage?
1) Permanent physical separation; and
2) Intent (of at least one party) not to resume marital relationship.
Cannot be maintaining the facade of marriage.
If assets are acquired after economic community ends but before filing for divorce, are they community or separate property?
Separate property.
How will community property be divided if there is a divorce?
50:50, unless the interests of justice require otherwise. Subject to adjustment for spousal support and child support.
If payments are made after economic community ended for work done before it ended (e.g. an annual bonus), are the payments separate or community property?
Community property.
If payments are made after marriage for work done before marriage, are the payments separate or community property?
Separate property.
On divorce, is community property divided 50:50 in aggregate or individually?
Each separate piece of community property (and community liability) is divided 50:50, not in aggregate. Subject to exceptions.
What is the economic circumstances exception to the 50:50 for each asset rule?
One large asset can be given entirely to one party, and the other party given assets of equivalent value, in the following circumstances:
1) to allow the children to keep living in the family home;
2) to avoid dividing ownership of a closely-held company;
3) to avoid dividing up one party's pension.
Are debts incurred before marriage divided up as community liabilities upon divorce?
No. The party that incurred the debt keeps the whole debt.
How are personal injury payouts treated upon divorce?
They go to the injured party.
Can a spouse give community property to a third party?
Only with the other spouse's consent. If the gift was made without consent, the other spouse can set the gift aside in its entirety.
What happens if a spouse gives away CP without consent and then gets divorced or dies?
The other spouse can set aside half the gift of the CP (ie. take half back) either from the third party or from the estate of the dead spouse.
Do the community property rules apply to Federal Government assets, eg. bonds?
No. Federal law preempts CA community property law.
How can a spouse dispose of his/her property in a will?
Can dispose of all of his/her separate property and half of the community property.q
What is the "widow's election" will?
If a widow takes property under her husband's will, she must abide by all of the will (even if it incorrectly disposes of CP).
What is the "community credit presumption"?
If an asset is purchased on credit during marriage, it is presumed to be community credit. This presumption can be overthrown.
If assets are purchased on credit during marriage, how is the "primary intent of the lender" relevant?
Can overcome community credit presumption, if lender is looking for satisfaction of debt to one spouse only. Eg. if property is purchased by mortgaging a spouse's separate property, the new property (& loan) will be SP.
How is an asset divided up if it was purchased during marriage partly by a CP deposit and partly by SP mortgage?
CP = Asset value x (% of purchase price covered by the CP)
SP = Asset value x (% of purchase price covered by SP)
How can a spouse breach his/her fiduciary duty re CP?
Reckless or negligent disposal or investment of CP.
What are the two basic ways in which the CP rules can be altered?
1) By agreement, either before or during marriage.
2) Taking title in certain ways.
What is it called if the character of property changes during marriage?
Transmutation.
Is consideration required for agreements to alter the CP rules?
No.
Do pre-marital agreements need to be in writing?
Yes, and signed by both parties. Subject to exceptions.
What are the exceptions to the writing requirement for pre-marital agreements?
1) Oral agreements that are fully performed (= "executed")
2) Estoppel based on detrimental reliance (one spouse relied on other's promise).
What subject can pre-marital agreements NOT address?
Refusal to provide child support. Statute prohibits contracting out of child support requirements.
In brief, what are the 2 defenses to enforcement of pre-marital agreements?
1) Agreement not signed voluntarily.
2) Unconscionability.
What are the statutory requirements for voluntary signing of pre-marital agreements?
1) Each party represented by independent legal counsel, or waives this right in writing, or fully informed in writing of content of agreement.
2) Each party has 7 days to consider agreement.
What are the 2 categories of unconscionability as a defence against enforcement of a pre-marital agreement?
1) Spousal support
2) Everything else
When is a spousal support agreement unconscionable?
1) A party not represented by independent legal counsel at time agreement was signed.
2) Provision is unconscionable at time of enforcement (even if both parties have counsel).
When is a pre-marital agreement unconscionable (other than in relation to spousal support)?
1) No disclosure
2) Right to disclosure wasn't waived
3) Unconscionable when made; AND
4) No knowledge
What are the writing requirements for a transmutation agreement during marriage?
Agreement must:
1) be in writing
2) state that property is being transferred, and
3) be signed by spouse whose interest is adversely affected.
What are the two exceptions to writing requirements for transmutation agreements?
1) Transmutation was before 1985 - may be oral; or
2) Property being transferred is not very valuable in the circumstances of the marriage.
Does a will satisfy the writing requirements for transmutation agreements?
Not unless the willmaker is dead. A will is not evidence of transmutation if proceedings are commenced while willmaker is alive.
What is the pre-1975 married woman's presumption?
If title to asset doesn't indicate sole ownership by husband, it is presumed to be the woman's SP.
Does the form of title (eg. joint / sole) to an asset overcome the community property rules?
No (subject to the married woman's presumption for assets titled before 1975).
Can (1) a husband, or (2) a third party rebut the married woman's presumption?
1) Husband - yes.
2) Third party - no.
What are the 3 circumstances in which the married woman's presumption applies to title to assets taken before 1975?
1) Title in woman's name only = 100% her SP
2) H&W take title as joint tenants = 50% her SP, 50% CP
3) Title taken in name of wife and 3rd party = tenants in common.
What case relates to CP and taking title as joint tenants?
Marriage of Lucas, CA Supreme Court 1980
What does Marriage of Lucas hold?
If H&W take title to asset as joint tenants, the asset is presumed to be CP (unless other intent can be proven).
Does Marriage of Lucas still apply?
1) Yes, if a spouse is dead.
2) In the case of divorce, it applies only if the "anti-Lucas" statutes do not apply.
In what circumstances do the two "anti-Lucas" statutes apply?
Where there is a title document or deed showing acquisition of property during marriage in equal shares.
What does the first "anti-Lucas" statute provide?
If there is a divorce or separation, property acquired by H&W during marriage as joint tenants is presumed to be CP. (Same as Marriage of Lucas rule.)
What does the second "anti-Lucas" statute provide?
Family Code: If divorce, spouse who paid using SP for Downpayments, Improvements to property, or Principal repayments on mortgage (DIP) gets credit for those amounts as SP = gets reimbused, without interest.
How is % CP determined if some repayments are made before marriage (from SP) and some are made during marriage (from CP)?
% CP = principal debt reduction attributable to CP, divided by purchase price.
Rest is SP.
How is a whole-life insurance payment divided? (compared to term life insurance, which is paid for a year at a time)
% CP = CP payments, divided by total purchase price.
Rest is SP.
How is a term life insurance payment characterized?
By the nature of the last premium: if premium for relevant year was paid with CP, the whole payout is CP.
What happens if a spouse uses CP to improve their own SP?
Does not give a CP share in the SP, but other spouse can claim 1/2 reimbursement of either (a) CP expenditure, or (b) increase in value of SP due to CP investment.
What happens if a spouse uses CP to improve the other spouse's SP?
If H spends CP on W's SP, there is a split of authority re reimbursement right. Some authority holds it is a gift to W.
Does commingling of $CP and $SP transmutate the asset?
No.
What happens if $SP is used to pay family living expenses?
Presumption of gift to community. No right of reimbursement unless there is a reimbursement agreement.
What are the two ways to show money is SP if commingled with $CP?
1) Exhaustion: no $CP was available when an asset was purchased.
2) Direct tracing ("quick in, quick out"): sufficient $SP was available when the asset was purchased, and the purchasing spouse intended to use their $SP for that purchase.
What 2 cases apply if a business owned before marriage greatly increases in value during marriage?
1) Parera: personal skills and effort.
2) Van Kemp: valuable company or asset.
When does the Parera test apply to dividing up the value of a business upon divorce?
If the spouse's time, skill and effort were the greatest contributors to the success of the business.
If Parera applies, how is the business divided up?
Pay interest on SP; the rest is CP. Interest at fixed rate of 10% on value of business at time of marriage. (More CP than Van Kemp test.)
When does the Van Kemp test apply to dividing up the value of a business upon divorce?
If capital investment was the major factor in growth of business (not skill of spouse). May apply if spouse was highly-paid.
If Van Kemp applies, how is the business divided up?
Value community labor; the rest is SP. (More SP than Parera test.)
What is the general rule for dividing pension benefits accumulated during marriage, upon divorce?
CP% = years in job while married, divided by total years employed to retirement.
If divorce is before retirement, how are pension benefits divided?
1) If & when pension is received, other spouse gets half of CP share of pension; OR
2) Cash out the other spouse upon divorce by awarding other assets of equal value.
If at time of divorce, spouse can retire but hasn't, how are pension benefits divided?
The retirement benefit has matured. Spouse's choice not to retire can't defeat the other spouse's present right to part of pension value.
If a spouse dies, can the other spouse claim half the CP share of the dead spouse's pension?
No. Federal statute prevents this. Pensions are only divided up upon divorce.
How are disability and workers' compensation benefits classified?
According to awardee's status (single/ married) when received, not when earned.
How is severance pay classified?
No clear rule. SP if replacing lost earnings. CP if arising from employment earnings during marriage.
What is the rule for classifying stock options that vest after divorce?
Stock is pro-rated in one of two ways, depending on the primary intent of the employer in granting the stock option.
What are the two cases that apply when classifying stock options?
1) Marriage of Hug
2) Marriage of Nelson
When does the Marriage of Hug rule apply to classifying stock options upon divorce?
If the employer granted the stock option primarily as a reward for the past services of the employee.
If Marriage of Hug applies, how are stock options divided upon divorce?
%CP = years from date of employment to date of divorce, divided by years from date of employment to date option can be exercised.
When does the Marriage of Nelson rule apply to classifying stock options upon divorce?
If the employer's primary intent in granting the option was to keep the employee.
If the Marriage of Nelson rule applies, how are stock options classified upon divorce?
%CP = years from date option was granted to date of divorce, divided by years from date option was granted to date option can be exercised.
How is the goodwill of a professional practice classifed upon divorce?
Goodwill acquired during marriage is CP and is therefore subject to 50:50 division upon divorce.
What is the goodwill of a business?
Income not derived from labor or reasonable return on capital assets.
How are educational expenses incurred during marriage classified?
Community is entitled to reimbursement of educational expenses, if they enhanced the spouse's earning capacity.
How are educational expenses incurred before marriage and paid during marriage classified?
Community can be reimbursed. Some exceptions.
How are educational debts assigned upon divorce?
Assigned solely to the party who incurred the debt.
If one spouse harmed the other spouse, how are tort damages payments classified?
SP of other spouse.
If a third party harmed a spouse, how are tort damages payments classified on divorce?
All damages go to injured spouse, as long as the money can be traced and hasn't already been spent.
If a third party harmed a spouse, how are tort damages payments classified on death?
All damages are CP.
If a spouse harmed a third party in the course of community activities, how can damages be satisfied?
Liability first satisfied from CP, then from spouse's SP.
If a spouse harmed a third party in the course of non-community activities, how can damages be satisfied?
Liability first satisfied from spouse's SP, then from CP.
If a spouse harmed a third party, can the other spouse's SP be used to cover the liability?
No.
What is the general rule for management of CP by one spouse?
Each spouse can deal with CP alone, subject to important exceptions.
Does a spouse need written consent of other spouse to sell/ transact with personal property of other spouse?
Yes.
If a spouse sells or encumbers large amounts of CP, do they need the other spouse's consent?
Yes.
Does the conveyance of CP that is real property need consent of both spouses?
Yes. Joinder of both spouses is required.
If real property that is CP is conveyed without both spouses' consent, what are the consequences?
The spouse who has not given consent can void the sale.
If real property that is CP is conveyed without both spouses' consent, what is the statute of limitations on voiding the sale?
One year, unless purchaser knew or should have known that the seller was married, in which case there is no limit.
What is the "family attorney's real property lien"?
Rule that allows a spouse to use her half of CP to pay the lawyer in a divorce proceeding.
Can business debts incurred before marriage be paid from other spouse's SP?
No.
How are medical bills of a spouse classified?
Each spouse is personally liable for other spouse's "contracts for neccessities" (medical bills). But if $CP is available, spouse can be reimbused from community estate.
Is economic separation relevant under the Family Code?
No. Family Code rules refer to divorce as end point, not economic separation.
When does a creditor have access to a spouse's CP after divorce?
If that spouse incurred the debt or was assigned the debt by court.
How is property acquired while in a non-CP state treated, if the parties subsequently move to California and get divorced?
If the property would be CP if acquired in California, it is "quasi-CP" and treated as CP (ie. divided 50:50).
If property in another state is acquired through inheritance, how is it classified upon divorce?
It is SP.
Do the quasi-CP rules apply to real property in another state, if the acquiring spouse dies?
No. The laws of the other state apply to that property.
How is property acquired in another CP state classified, if the spouses move to CA and one dies?
The property is true CP (not quasi-CP) and full CP rules apply, eg. the non-acquiring spouse can dispose of his/her half of the CP in their will.
If property in another state is acquired through inheritance, how is it classified upon divorce?
It is SP.
Do CP rules apply to common law marriages?
No. Only spouses and registered domestic partners have CP. Exception: CLM validly contracted in another state.
Do the quasi-CP rules apply to real property in another state, if the acquiring spouse dies?
No. The laws of the other state apply to that property.
What rules apply to property aquired in common law marriages?
Property relationships are governed by contracts, either express or implied.
How is property acquired in another CP state classified, if the spouses move to CA and one dies?
The property is true CP (not quasi-CP) and full CP rules apply, eg. the non-acquiring spouse can dispose of his/her half of the CP in their will.
Do CP rules apply to common law marriages?
No. Only spouses and registered domestic partners have CP. Exception: CLM validly contracted in another state.
What rules apply to property aquired in common law marriages?
Property relationships are governed by contracts, either express or implied from conduct.
In common law marriages, how is property divided if there is no contract?
Each spouse keeps what they acquired.
If a putative spouse had an objectively reasonable and good faith belief that they were lawfully married, how is property classified?
Property acquired during the common law marriage is considered "quasi-marital property" and split 50:50 like true CP.