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82 Cards in this Set
- Front
- Back
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Community Property |
All property, wherever situated, acquired by onerous title during marriage. |
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When can CP be obtained by Lucrative title |
If the gift is in both spouse's names. |
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Once CP is acquired what is the general rule? |
There is a present, undivided, one half interest. |
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Cohabitation Couples Separation |
No CP property, because there is no fiduciary duty, unless there is an express or implied K or Quantum Meruit. -Marvin Case |
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Quasi CP |
The property acquired from an invalid marriage or from spouses changing domicile to CA |
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Requirements for a Valid Marriage |
1. Capacity to Marry 2. Satisfy Legal Requirements |
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Capacity to Marry |
Bigamy/Incest/Fraud at Time of Marriage K= void marriage If a spouse is already married, the innocent spouse, with the objective (and subjective) Good faith belief that the marriage was valid, is a putative spouse for as long as the good faith belief persists |
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Legal Requirements of Marriage |
Licensed, Witnessed, and Publicly Registered. Only CA recognizes CL marriages |
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Spouses Changing Domicile Traditional Rule |
Personal Property=Follows Domiciliary
Real Property=Subject to Law where situated -Trad. Rule has been rejected by states that follow the Uniform Disposition of CP Rights at Death Act |
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Uniform Disposition of CP Rights at Death Act |
Treats Real Property in these states as CP as well as any Personal Property traceable to CP |
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Spouses Changing Domicile California Rule |
All Prop acquired, wherever situated, is CP if acquired while at least one of the spouses was domiciled in CA. |
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Separate Property |
All property the person had before marriage; acquired by lucrative title; the profits from any of that property; and property acquired by onerous title after the date of separation |
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Date of Separation Old Rule |
1. Subjective Intent to end the marriage 2. That is affirmed by Objective Acts of a complete and final break in the marital relationship |
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Date of Separation New Rule |
1. Subjective Intent to end the marriage 2. That is affirmed by Objective Acts of a complete and final break in the marital relationship 3. Physical Separation Marriage of Manfer |
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Pre 1986 Pre/Post Marital Agreement Rules |
1. No consideration Required 2. Only void where the Objective language of the K facilitates, encourages, or promotes divorce/dissolution. 3. Voluntary |
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1986 Pre/Post Marital Agreement Rules |
1. No Consideration necessary 2. Must be in writing 3. Signed by both parties 4. 7 days before marriage 5. Voluntary 6. Can contain any provision that is not against public policy. 7. Must not be unconscionable |
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Exceptions to Writings |
1. Executed Oral Agreements 2. Estoppel (Estoppel Elements) a. Pre/Post marital agreement b. That causes a party to change position c. To his/her detriment |
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Exception to 7 day rule |
If both parties have attorney's, no 7 day rule |
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Involuntary |
1. Lacks Capacity
2. Duress 3. Fraud 4. Undue Influence |
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Unconscionable |
1. No fair and reasonable disclosure of property/financial obligations. 2. No voluntary and express waiver of disclosure of property/Financial obligations 3. Person did not have actual or constructive adequate knowledge of property/financial obligations. |
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Pre Martial Spousal Support Waiver |
-Pre 2000: Waiving spousal support was a violation of public policy, & per se unenforceable - As of 2000, Not per se unenforceable in CA. - As of 2001 Bonds Case rule that spousal support waiver is unenforceable if both parties do not have lawyers present, or unconscionable. |
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Amendments to Premarital Agreements |
If amended/revoked after marriage: 1. In writing 2. Signed by both parties 3. No consideration required |
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Burden for challenging K |
Burden in on party challenging the K |
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Transmutation of Property Pre 1985 |
No formal requirements of property agreements during marriage. Question of fact based on acts/conduct of the parties. -Look for evidence of intent to transfer title. Estate of Raphael - One party's hidden beliefs, mere use of property, and using funds of another character may not be enough. Jafeman |
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Transmutation of Property 1985 and on |
1. Writing 2. Express Declaration (Benson) 3. Signed by Spouse whose ownership interest is adversely affected 4. Cannot be made for Fraudulent Transfer Purpose |
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Scope of Present Transmutation of Property |
1. Does not apply to gifts between spouses of clothing, jewelry, or other tangible article of a personal nature. 2. Does not affect property that changes character through commingling 3. Does Not apply where real property is transferred from a 3rd Party. |
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Tracing Definition |
A party may trace to source of acquisition to determine character of the property |
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Commingling Tracing |
When Couple have commingled funds, a spouse can trace an asset to overcome the rebuttable presumption that the asset is a community asset |
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2 ways to Trace |
1. Direct Tracing (See) 2. Exhaustive Tracing (Exhaustive Tracing) |
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Direct Tracing |
the party asserting the separate ownership ofthe disputed asset must establish: 1) There was enough SP funds in theco-mingled account to cover the purchase price of the disputed asset on the DATE the asset was purchased, [prove w/ records] and 2) He INTENDED thatSP funds be used to purchase the disputed asset [prove w/ writings or oral testimony] *In essence, the direct method focuses on the availability of SP fundson the date of the purchase. If there are no SP funds available at time ofpurchase, then General presumption prevails. |
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Exhaustive Tracing |
Based on the presumption that allavailable CP funds are presumed to pay family expenses. The separate characterof an asset may be established by showing, that on the DATE of the purchase ofthe disputed asset, that the co-mingled account contained only SP funds, b/c CPfunds were exhausted on that particular date from paying family expenses. *In essence, the exhaustion formula looks to theunavailability of CP funds on the purchase date of the disputed asset. If thereare CP funds available on the specific date the asset is purchased, then the SPclaimant fails to rebut general presumption under this theory. |
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Main types of Presumptions |
1. Property acquired after marriage 2. Form of Title Presumption 3. Married Woman's Special presumption |
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Property Acquired after marriage Presumption |
Presumed to be CP, but not when real prop is acquired in 1 spouses name alone from a 3rd party. |
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Exceptions to when real property is not presumed to be CP |
1. Post 1965, Single Family Home in JT is presumed to be CP 2. Post 1983, Any prop taken in JT during Marriage is presumed to be CP. -Unless language in deed that states its SP 3. Post 1987, All JT is rebuttable presumed to be CP |
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Form of Title Presumption |
May be overcome by evidence of mutual understanding, based on acts and declarations, to hold property as CP. -Tracing not enough to overcome -Hidden intent not enough to overcome |
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Married Woman's Special Presumption |
Pre 1975, Property acquired by a Married Woman in writing is presumed to be: 1. SP if acquired alone. 2. TIC if with another, but not H 3. CP if with H, but if conveyance of Real Prop doesnt indicate "CP" W's 1/2 interest is SP, and other 1/2 interest is CP. (Dunn) |
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Division of CP at Divorce/Death |
Divide CP assets equally of the value close as possible to the time of trial. |
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Exception to dividing equally in kind |
1. Economic circumstances warrant a community asset to be awarded as a separate asses to achieve equal division. i.e Family Hoe with no economic value 2. Where parties do not want equal division |
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Liability for Division of CP at Divorce/Death |
Community remains liable for Comm. Debts. If Community Debt exceeds Community Assets, Debts assigned as court deems equitable. |
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Type of Specific Assets |
1. Business Growth and Profits 2. Credit Acquisitions 3. Personal Injury Proceeds 4. Proceeds from Damage to Property 5. Life Insurance Policies 6. Pensions 7. Bonuses 8. Severance Pay 9. Disability Benefits/Worker's Comp 10. Health Insurance 11. Stock Options 12. Professional Goodwill 13. Professional Degrees/Licenses |
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2 Tests to calculate Business Growth and Profits |
Use whichever is equitable in a given situation: 1. Pereira Rule 2. Van Camp Rule |
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Pereira Rule |
Value of Business at Beginning of Marriage + Fair rate of return for life of Marriage - Excess of current value, if any, is attributed to Community. (Focuses on Capital) |
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Van Camp Rule |
Value of Labor During Marriage. Value reduced by family expenses. - Excess, if any, is attributed to SP (Focuses on Labor) Use when Spouse is the chief contributing factor |
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Credit Acquisitions |
Rebuttable presumption that property acquired by credit during marriage is CP, but apportionment possible under intent of lender rule |
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Personal Injury Proceeds |
Other Jx classify PI recoveries based on the replacement function served. California Rule (1994): PI is community if action arises during marriage, but at diverse goes to the injured party unless equity provides otherwise. |
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Proceeds from Damage to Property |
Insurance proceeds match the character of property, not the source of funds used to pay for the insurance |
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Life Insurance Policies |
2 types: 1. Term Life 2. Whole Life |
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Term Life Insurance |
Only Community if the person dies during the term paid for with Comm. Payments |
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Whole Life Insurance |
Community interest in money saved from community payments, otherwise only community if the person dies during term paid for community funds. |
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Pensions |
(1976) Non vested pension rights recognized as community asset. - The pension right is a contingent property right of deferred compensation, not a mere expectancy interest. - Rule applies retroactively to non adjudicated cases (Brown) - A spouse cannot time his retirement to deprive the other of his community interest (Gillmore) |
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ERISA |
Now applies to all employers engaged in IC, shortens the vesting pension to either (1) complete vesting after the completion of 5 years of employment or (2) gradually vesting after 3-7 years of employment. |
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Time Rule |
Default rule that is used when the PENSION is dependent upon or substantially related/connected to number of years of service.
Number of Years worked while married/Number of Years in the plan= % Community -If enhanced, even after separation, community receives benefit of enhancement. |
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Redeposit Rights |
If money is taken out of a pension during marriage, the community has a redeposit right |
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Terminable Interest Rule (Pension Benefit Types) |
Pension Benefit Types: 1. Periodic Benefit--Person receives X amount until death 2. Lower periodic benefit/survivor annuity--Person receive less than X amount until death, and surviving spouse gets additional benefits after death |
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Early Rule |
(Pre 1986) 1. the non employee's community interest does not survive the employee spouse's death and 2. The non community employee's interest terminates at the employee spouse's or the non employee spouse's death in 1986, CA repealed the terminable interest rule. Uses the lower periodic benefit/survivor annuity ERISA pensions subject to terminable interest rule |
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Bonuses |
Community interest |
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Severance Pay |
No community interest in severance pay. Exception: If severance pay resembles a pension, it may be treated as community asset. |
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Disability Benefits/Workers Comp |
No community interest in disability benefits |
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Health Insurance |
No Community Interest |
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Stock Options |
Each individual case whether the stock options are community or separate: 1. If they serve as a present alternative to fixed salary, they are deferred compensation, and Community asset 2. If they serve as a bonus for past labor, they are community asset. 3. IF they serve as an incentive for future labor, they are separate if the labor they incentivize is after date of separation. |
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Stock Options Formula |
First 2 scenarios: Date of Employment to Date of Separation/ Date of employment to date stocks are exercisable. - Percentage x the # of stocks= # of stocks that are community assets. Scenario 3: Date of grant of stock to Separation/ Date of grant to exercisability |
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Professional Goodwill |
in CA, professional goodwill is community interest. |
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How to value Professional Goodwill |
1. Capitalization Approach: Net Earnings - Salary + Fair Rate of Return/Capitalization % |
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Professional Degrees/Licenses |
CA: Community can be reimbursed with interest for Education/Training that substantially enhances the earnings of parties. Applies after 1985 |
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Pro Rata Apportionment |
1. If title taken in 1 spouse's name alone before marriage, and community contributes to pay down, Moore-Mardsen Pro Rata Apportionment 2. If there is a form of title presumption that governs the transfer for a third party to 1 spouse in his name alone during marriage, but the Community Pays down loan, Moore-Marsden also applicable. Formula: Moore Case 1. Calculate how much paid off of Total 2. Market Value of House - Amount owed = Equity 3a. Amount in CP funds paid/total amount paid = CP interest (%) 3b. Amount in SP funds paid/total amount paid = SP interest (%) 4a. CP interest (%) x Equity = CP in $ 4b. SP interest (%) x equity = SP in $ |
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Pro Rata Reimbursement |
1. Post 1983, unless a written waiver exists, any separate improvements/contributions to community reimbursed if traced so long as they do not exceed value of the property 2. Pre 1975, Community contributions to husbands separate improvements, without wires knowledge, entitles community to be reimbursed. 3. Now, if either spouse uses CP for his separate improvements without the other's consent, reimbursement to community. |
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Management Traditional Rule |
Husband had control of the community. Could make reasonable gifts of CP |
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CA Changes to Management Rule |
1. In 1951, CA allowed women rights to manage their earnings. But not once commingled. 2. 1975 Joint management, married woman's special presumption gone. |
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Joint Management Rules for CP |
Joint Management of Real CP, but both spouses must join in transfer, conveyance, encumbrance, or lease on real property.
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Substantial Gift of CP |
While CP is entitled to equal management and control, and spouses may sell or buy CP as they wish, a spouse may bot make a substantial fight of CP without the other spouse's consent |
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Join Management and Control of personal CP, including power of disposition |
Unless a gift given both to a third party, written consent required if disposition if for less than fair market value |
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Creditor Rights |
Post 1975, Community Estate is liable for debts. Community not liable for a separate debt prior to marriage if community funds held in an account to which the debtor spouse has no access and is not commingled. Community must reimburse if separate estate pays debts of common necessaries when either community or separate funds were available. |
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Fiduciary Duty |
Attaches to management and control of CP |
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Duties |
full disclosure of existence, characterization, and valuation of community assets and liabilities |
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Fiduciary Duty of Care |
Duty of care for no unfair advantage. If an unfair advantage is shown, presumption of undue influence |
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Remedies for breach |
A spouse has a claim for breach that results in impact of other's undivided 1/2 interest, whether based on a single incident or pattern. |
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Accounting Remedy |
Award a 50% interest, attorney's fees, and court cost in undisclosed assets. Highest value of: (1) Date of Breach; (2) Date of Sale/Disposition of asset; and (3) Date of Award Award a 100% interest in an asset undisclosed if undisclosed based on oppression, fraud, or Malice. Includes gross mismanagement of community financial affairs |
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Limitations on Remedial Actions |
Within 3 years of actual knowledge or upon death of breaching spouse. |
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Setting aside a Judgment up to 1993 |
Granted up to 6 months after entry of judgment for inadvertence, mistake, surprise, or excusable neglect. Granted for Extrinsic fraud or coercion |
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Setting aside a Judgment after1993 |
Expanded fiduciary duties through distribution of Communities Assets/Liabilities. Now a judgment can be set aside for perjury and/or failure to disclose an asset. |
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Lucas/Anti Lucas Laws |
Before 1984, Property acquired in joint title is presumed to be Joint Tenancy, & SP funds used on the JT was presumed to be a gift to the community and not entitled to reimbursement. From 1984-1987, Anti Lucas laws presumed that property acquired in joint title is CP, but SP funds of a down payment, improvements, and pay down mortgage were subject reimbursement unless there was a waiver. In 1987, Anti Lucas laws amended to presume that property taken in TIC, JT, and CP are presumed CP and SP funds of a down payment, improvements, and pay down mortgage were subject reimbursement unless there was a waiver. |
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Commingled Funds |
When SP and CP are coming in a Joint bank account, the CP and SP are commingled. If they become so entangled that they cannot be unscrambled, then the entire account is presumed CP. Burden of the SP proponent to show evidence via tracing that the funds are SP. |
