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