ACTIONS Flashcards
Actions Checklist
- Transmutation
- Exception - Gifts
- Title in One Spouse’s Name
- Equal Rights and Management Over Community Property
- Gifts to Third Parties
- Sale or Lease of Community Real Property
- Sale of Community Business Assets
- Fiduciary Duties
- Breach
* Note: the character (e.g. CP, SP) of property may be altered by the spouses through selling, purchasnig,
Transmutation
* Transmutation is frequently tested. Always raise this issue if the fact pattern suggests a change in the property’s character, even if the transmutation will ultimately be determined
Transmutation occur when the character of real or personal property is legitimately changed from CP to SP, SP to CP, or SP of one party to SP of the other.
To be valid, the transmutation must (1) be in writing, (2) be signed by the party who would be adversely affected, and (3) include an express declaration that the character of the property will be changed by the party whose interest is adversely affected. Consideration is not required.
Transmutation - Exception - Gifts
In the absence of a written statement, gifts of property between the parties may still constitute a transmutation. For this exception to apply, these requirements must be met: the gift (1) is made between spouses, (2) is limited to clothing, jewelry, or other tangible articles of a personal nature, (3) is used primarily by the receiving spouse, and (4) is not substantial in value, relative to the circumstances of the marriage at the time of the gift. However, if the value of the gift is determined to be substantial, a transmutation will occur only where there is a writing.
Title in One Spouse’s Name
When the source of an asset was CP, the character of the property will not be changed even when a spouse takes title to the asset in her name alone.
Equal Rights and Management Over Community Property
Spouses have equal rights in the management and control of CP and must make decisions pertaining to CP jointly
Gifts to Third Parties
If one spouse unilaterally gifts or sells personal CP for less than a fair and reasonable value without the other spouse’s written consent, then the non-consenting spouse may ratify the gift, or revoke and sue to recover the gift. In the event of the gifting spouse’s death, the non-consenting spouse may still either ratify or void half of the gift’s value, thereby reclaiming her CP share
Sale or Lease of Community Real Property
To sell or lease CP real property, for more than a year, both spouses must jointly execute a signed written agreement. A transfer of real property to a bona fide purchaser without notice of the marriage will be presumed valid. However, the non-consenting spouse may void the transfer if she can demonstrate her lack of consent and returns the payment to the purchaser.
Sale of Community Business Assets
Even if a business is a CP asset, where one spouse is the manager of the business, she has sole management rights unless she intends to sell a substantial part or all of the business. In that case, there is a duty to disclose and obtain written consent from the other spouse.
Fiduciary Duties
Both spouses have a fiduciary duty to each other to fully disclose all material facts about the assets and debts of the community and provide access to information if requested. Both spouses also have a fiduciary duty to never seek an unfair advantage over the other, but instead to act in the highest good faith regarding the management and control of CP.
Fiduciary Duties - Breach
A breach of fiduciary duty occurs when a spouse fails to obtain the consent of the other spouse when selling or leasing property or making gifts. In that event, remedies available to the non-consenting spouse are (i) seeking a greater share of CP, (ii) seeking to have her name added to the title, or (iii) the breaching spouse’s forfeiture of an asset due to fraudulent concealment
