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86 Cards in this Set

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When there is a cause of action that arises during marriage, is the recovery CP?
yes. but at divorce, community estate personal injury damages will be awarded entirely to the injured spouse.
how does CA treat a retirement pension?
CA treats retirmenet as deferred compensation. When the pensionable spouse is eligible to retire but chooses not to, divorce court can order a private employer to pay the nonemployee spouse her share of benefits as though teh worker had retired.
how does CA treat disability pay and workers' compensation?
to the extent that they are disability pay and workers comp intended to replace marital earnings, they are cp

to the extent that they are intended to replace separate postdivorce earnings, they are SP. it doesn't matter that the right to receive was earned during marriage.
is goodwill treated as CP?
yes if earned during marriage. court will value using two techniques: market sales valuation or capitalization of past excess earnings.
are education and training treated as cp?
no but there is an equitable right to 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.
What are the equitable defenses to the reimbursement duty (for education and training)?
1) community has already substantially benefitted from education or training (more than 10 years have passed since contributions and divorce);
2) the other spouse has received community-funded education; and
3) the need for spousal support is reduced as a result of education or training.
how is life insurance treated at death?
whole life insurance-->CP in proportion to percentage of premiums paid by community.

for term insurance proceeds, the character of the final premium is determinative.
how is life insurance treated a divorce?
to the extent a policy has a current cash value (whole life), that cash value is cp in proportion to community paid premiums. term insurance has no cash value.
business good will--CP or SP?
disability pay--CP or SP?
CP to extent replacing marital earnings
education--CP or SP?
NOT CP (but right of reimbursement under certain circumstnaces)
life insurance proceeds--CP or SP?
apportioned CP (with exceptions)
pensions in general--CP or SP?
apportioned CP
tort recovery against spouse
separate property insurance proceeds--CP or SP?
SP (but right of reimbursement for premiums paid from CP)
severance pay--CP or SP?
generally treated like disability pay (CP to extent replacing marital earnings)
stock options--CP or SP?
apportioned CP
tort recover against third party--CP or SP?
CP if cause of action arose during marriage (note divorce exception)
does a prenup require consideration?
what are the requirements for a valid prenup?
1) must be signed by both parties but an oral oen can be enforced when exec propmis was fully executed or promisor is estopped to assert SOF
2) premarital agreements may regulate property rights and support obligations
3) circumstances that render premarital agreements unenforceable (unconscionable when executed and burdened party did not have adequate disclosure of other party's wealth)
4) waiver of death rights are enforceable.
What kinds of agreements did CA courts recognize regarding transmutations pre 1985? post 1985?
Pre jan 1, 1985--the courts recognized explicit oral agreements and agreements and donative acts inferred from one party or both parties' behaviors.

post january 1, 1985, there must haveen a signed writing accepted by spouse who was adversely affected by the transmutaiton.
What is the presumption of undue influence?
There is a rebuttable presumption of undue influence when one spouse gains an advantage over the other in a property transaction.
what duty is owed to the confidential relationship of spouses?
a duty of the highest good faith and fair dealing on each spouse.
in what ways can a married couple jointly hold property?
1) in a joint tenancy
2) tenancy in common
3) as community property or
4) as "community property with right of survivorship"
what is a joint tenancy?
H and W each own an undivided one-half interest and the survivor of the two automatically becomes the owner of the decedent's interest as well as his own.

Need explicit language "to H and W as joint tenants"
what is a tenancy in common?
tenants in common possess equal proportional ownership interests in the assset. There is no right of survivorship.
what is the nature of the asset when it is held in community property?
each spouse owns an undivided one-half interest and neither spouse can partition the whole.
What are the presumptions regarding how property is held by a married couple pre 1975?
Presumed to be tenancy in common. post 1975 presumption is community property. but even before 1975, describing the grantees as husband and wife created CP title.
what is the nature of community property with right of suvivorship?
it has all attributes of ordinary community property but at the death of a spouse, the decedent's half-interest passes to the surviving spouse, just as a joint tenancy 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, it was presumptively woman's SP.
If property was taken in tenancy in common 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. JT and CP title were deemed to avoid the married woman's presumption.

can rebut the presumption by husband (not BFP) showing that he did not intend to make a gift to W when he put it in her name.
Where spouses take title in joint and equal form but contribute disproportionately to purchase price: what is the significance of the Lucas resolution?
the 1980 Lucas case held that the act of taking title in a joint and equal form is inconsistent with preservation of separate interests.

*The SP contributor is presumped to have made a gift.*

The Lucas gift presumption remains entirely operative when a marriage ends in death.
if jointly titled property is CP, at divorce what result?
at divorce the SP contributions to the acquisition will be reimbursed to the SP contributor without interest.
What are the presumptions for commingled funds?
1) available community funds are presumed to have been used to pay for family expenses
2) absent evidence of a reimbursement agreement, a gift is presumed when separate funds are used to pay family expenses.
What are two permissible tracing methods?
1) exhaustion method--at time asset was purchased, community funds in the account had been exhausted by payment of family expenses so asset must have been purchased by separate funds.
2) direct tracing--at the time the asset was purchased, there were separate funds available and the proponent intended to use those separate funds to purchase an SP asset.
Can an SP proponent shw that total family expenses exceeded total community income and conclude that all remaining funds and assets purchased from commingled account were SP?
no. this is recapitulative accounting which is not allowed.
What is the consequence of a failure to trace?
the entire commingled account and assets purchased with account are CP.
Under what circumstancs would you use van camp or pereira accounting?
when communty funds or labor enhance the value of separate property.

pereira should generally be used when the management of the spouse was teh primary cause of growth or productivity of separate business.

van camp should be used when the character of the separate business is largely responsible for its growth or productivity.
what is van camp accounting?
the manager's services are valued at the going market salary. the amount of family expenses that were paid form business earnings are then subtracted. the remainder if any represents the community portion of the business and the rest of the business is SP (pro-SP)

value of H's services (salary per year) - family expenses paid from business earnings (expenses per year) = CP. The remaining is SP.
what is pereira accounting?
SP consists of teh manager's separate capital plus a fair rate return thereon (10% principle x 10 years). The rest is CP (pro-CP)

reasonable rate of return (10%/yr) + original principal = H's SP interest. The rest is CP.
When a spouse uses community funds to improve other spouse's separate property, is there a gift presumption?
when community funds are used to improve a spouse's own SP, is a gift presumed?
no. community can get reimbursed or the amount by which the improvement increased the value of the realty, whichever is greater.
Is credit acquired by one spouse during marriage presumptively community credit?
yes. to demonstrate the loan proceeds or credit purchases are his SP, the borrowing spouse may demonstrate that the lender primarily relied on borrower's SP in granting loan or extending credit.
When liabilities exceed assets, can an unequal division be made?
yes. they must take into account the parties' relative ability to pay the debts.
Are unpaid education debts separate property?
when one spouse receives community estate personal injury damages, what do each spouse get?
a community estate personal injury recovery is awarded entirely to the injured spouse unless the interests of justice require otherwise. in no even will injured spouse receive less than one half.
what is the time of valuation of assets and liabilities for purposes of divorce?
as near to the time of trial as practicable. a spouse managed business or professional practice should be valued at the time of permanent separation rather than trial.
are transfers of property between spouses pursuant to divorce taxable?
what are the tax consequences of sale of community assets to third parties?
the court must apportion direct tax liability equally to both spouses.
Can a decree be set aside when there has been extrinsic (culpable behavior of adversary) fraud or extrinsic mistake (excusable neglect of claimant)?
Can a decree be set aside for instrinsic fraud (error that the claimant with exercise of due diligence could have guarded against)?
No relief has been denied. however recent legislation provides that uncontested judgments may be set aside within one year of grounds of mutual or unilateral mistake.
What happens when a spouse makes an unauthorized intervivos gift of CP?
one spouse cannot make an inter vivos gift of CP without written consent of the other spouse. 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 donor's one-half interest in cp.
how is an intestate decedent's SP distributed?
an intestate decedent's SP passes in whole or in part to the surviving spouse according to three statutory formulas
1) all to the suriving spouse when decedent has left no surviving issue, parent, sibling, issue of deceased siblings;
2) 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
3) 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 adn 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.
How is quasi-community property treated at death?
the survivor has a one-half interest in decedent's quasi-CP. decedent has no rights in the survivor's quasi-CP
how is quasiCP treated at divorce?
at divorce, QCP is treated as CP even if one spouse is not domiciled in CA.
how is property that was acquired when spouse was domiciled in another CP jx treated?
as CA CP, not as QCP.
Can a survivor restore illusory transfers of QCP?
yes. if decedent who died domiciled in CA transferred his QCP to a third party for elss than substantial consideration and without his surviving spouse's consent, the suriving spouse may compel the third part to restore one half the property to decedent's estate if at the time of death decedent reserved rights to the property:
1) right to income
2) power to revoke, consume, invade or dispose of principal for decedent's own benefit or
3) right of survivorship.
How is QCP treated for purposes of debt collection?
A creditor can reach one spouse's QCP to satisfy a debt incurred by the other spouse. This is of questionable constitutionality. With the exception of debt collection, QCP is still treated as the acquiring spouse's SP during marriage (only CP for purposes of death or divorce).
how do CA courts deal with out of state community and quasi-community realty?
at divorce:
1) divide all CP and QCP in such a way as not to alter the nature of interests held in out of state property; or
2) if this isn't possible require parties to execute whatever conveyances are necessary or award to the party who would have benefitted from the conveyance the money value of her interest.

At death:
out of state realty is usually probated in ancillary administration in teh state in which the realty is located according to the laws of that jurisdiction.
How do CA courts deal with CA land owned by out of state decedents?
CA applies the law of the decedent's domicile to disposition of his CA realty.
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. Once she learns that her marriage is invalid she no longer accrues putative spouse property rights.

When only one partner is a good faith putative spouse, it is not clear whether the 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 other spouse knew but continued to enjoy benefits of cohabitation.

If decedent has both lawful and putative spouse, courts have equitably divided the decedent's estate between them.
How is QCP classified for purposes of management and control?
as SP
can either spouse acting alone buy, sell, spend or encumber all CP?
yes. each spouse has equal management and control of CP. however each spouse only has testamentary control over his one-half interest in CP.
with regard to real property must both spouses join in executing any instrument by which community real property is sold, conveyed or lease for more than one year?
what is a spouse's remedy when the other spouse misrepresents his marital status to an innocent transferee and CP is titled in one name only?
the nonconsenting spouse has one year in which to bring an action to void the transfer. transfers 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).
is a bank account held in one person's name CP?
a bank account held 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.
What is the business exception to the rule that either spouse may act alone?
a spouse who is operating a business or an itnerest 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. The managing spouse may act alone in all transactions but must give prior written notice to the other spouse of any sale, lease or exchagen of all or substantially all personal property used in the operation of the business. If no notice, the nonmanaging spouse has a remedy only if managing spouse has substantially impaired her one half interest. nonmanaging spouse cannot void the transfer.
what is the personal belongings exception to the rule that either spouse may act alone?
the dwelling or CP household furnisings or clothing of a spouse or minor children may not be transferred without written consent of other spouse. the nonconsenting spouse can void the transfer during or after marriage and need not return the transferee's purchase price.
what is the duty of the managing spouse?
the managing spouse must give a full accounting to the nonmanager when requested and must secure the consent of the nonmanager before committing certain acts, such as conveying or encumbering the family dwelling or furnishings.
pre 2003 transactions deliberate disposition was actionable, but mere incompetence was not. post 2003 grossly negligent or reckless conduct breaches a spouse's fiduciary duty.
when does a breach of the duty of the managing spouse occur?
when there is a breach of fiduciary duty that results in substantial impairment of the nonmanager's interest.
statute of limitations: actions must be commenced within 3 years after date nonmanager had actual notice of act of which she complains. action can be brought at death or divorce regardless of 3 year limit.

spouse can also be criminally liable for intentionally damaging community property or separate property of other spouse.
what are the creditor's rights in regards to quasi-CP?
a creditor may reach any property over which teh debtor has
how is child support and spousal support from prior relationships treated?
they are treated as debts incurred before marriage. in all other cases, a debt is incurred at the time the obligation arises.
what marital property can be reached by creditors?
all CP and the debtor's SP are liable for debts incurred before or during marriage. the other spouse's SP is not liable.

CP earnigns 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.
when one spouse occurs a debt for necessaries during marriage, the other spouse is personally liable for the debt.
personal liability still remains even after parties have separated (but pre divorce)
is a person liable for her spouse's torts?
no unless she would be liable for them even if the marriage did not exist. if liability occurred while the married person was performing an activity for the community's benefit, liability shall first be satisfied from CP and second from SP of married person. if not, go to SP first then CP.
What are the creditor's rights at divorce?
each spouse is personally liable for all debts incurred whether or not the court assigned the debt for payment by one spouse.
what are the creditor's rights at death of spouse?
when property passes through probate, the probate code requires contribution from the CP and SP estates of both sposues that are liable for the debt in proportion to the value of the assets.

When not through probate, the set aside law controls unless they elect formal distribtuion.
set aside law-->the suriving spouse is personally liable for debts chargeable against CP, QCP and decedent's SP that pass to suriving spouse without administration.
how is ERISA classified?
permits a CP distribution upon divorce of an ERISA regulated pension earned during marriage. but the law's anti-assignment provisions prohibit testamentary transfer by a nondivorced deceased spouse of her CP interest in her surviving spouse's pension.
how are federal military and veterans administration disability benefits after permanent separate classified?
armed forces life insurance proceeds-->SP or CP?
civil service pension-->SP or CP?
apportioned CP
disability benefits-->SP or CP?
foreign services pension-->SP or CP?
apportioned CP
military retirement benefits-->SP or CP?
apportioned CP
railroad retirement benefits?-->SP or CP?
social security type are SP; supplemental are apportioned CP
social security benefits-->SP or CP?
us savings bonds-->SP or CP?
SP (unless fraud involved)