Community Property Flashcards
What is the Community Property Presumption?
California is a community property state, all property acquired during marriage is presumed to be community property unless proven otherwise by clear and convincing evidence.
What is Separate Property?
Property acquired before marriage, after separation, or by gift, inheritance, or bequest during marriage is considered separate property.
What are the Requirements for Transmutation?
To change the characterization of property from separate to community or vice versa, a written agreement signed by the adversely affected party is required, explicitly stating the intent to transmute.
What are the Fiduciary Duties Between Spouses?
Spouses owe each other the highest duty of good faith and fair dealing, including full disclosure of all material facts regarding community property and debts.
Can a spouse encumber or dispose of community property on their own?
A spouse cannot unilaterally encumber or dispose of community real property without the written consent of the other spouse; violations may result in remedies for the aggrieved spouse.
How is Debt Characterized in Marriage?
Loans incurred during marriage are presumed to be community debt unless the lender relied solely on one spouse’s separate property for the loan.
How is Property Characterized?
The characterization of property is determined by the source of funds used to acquire it. Community funds create community property, while separate funds create separate property.
Do commingled assets change their character ?
Commingled assets retain their separate property character if the separate property can be traced to its source.
How are Separate Earnings Treated Post-Separation?
Earnings acquired after the date of permanent separation are considered the separate property of the earning spouse.
What is the Joint Title Presumption?
Property acquired during marriage and held in joint title is presumed to be community property unless there is evidence of a contrary agreement.
Can the community seek reimbursements from separate property?
If community funds are used to improve or pay for separate property, the community may have a right to reimbursement.
How are Investment Earnings Characterized?
Investments made with community funds are community property; investments made with separate funds are separate property unless commingling occurs.
What type of property are increases in separate property value?
Increases in the value of separate property during marriage are separate property unless the increase is attributable to community efforts or assets.
What is the Pereira Method of Allocation for Community Effort?
Under the Pereira method, a fair return on separate property is allocated as separate property, and any excess value is allocated to the community if due to community effort.
What is the Van Camp Method of Allocation for Separate Effort?
Under the Van Camp method, reasonable compensation for a spouse’s community effort is allocated to the community, and the remaining value is separate property if due to the property’s inherent qualities.
How is Inheritance Treated During Marriage?
Property inherited by one spouse during marriage remains separate property unless transmuted or commingled beyond tracing.
What is the Date of Separation and Its Significance?
The date of separation is the date the parties decide not to rekindle the relationship and end the MEC. Earnings and property acquired after the date of separation are separate property.
How is Business Goodwill Valued in Community Property?
The goodwill of a business may be allocated as community property to the extent it is derived from the efforts of the spouse during the marriage.
Who Bears the Burden of Proof for Property Characterization?
The party claiming a property’s separate or community nature bears the burden of proof to establish its character.
What is the Exhaustion Method for Tracing?
Separate property can be traced in commingled accounts by showing that community funds were exhausted at the time of purchase.
What is the Direct Tracing Method?
A separate property proponent may trace funds by showing that separate property funds were available and intended to be used for the purchase.
How are Disability Insurance Payments Characterized?
Disability insurance payments are community property to the extent they replace earnings lost during marriage and separate property to the extent they replace earnings lost after separation.
What is the Duty of Disclosure Between Spouses?
Spouses owe fiduciary duties of full disclosure of all material facts regarding assets and liabilities.
How are Gambling Winnings Characterized?
Gambling winnings during marriage are presumed community property unless earned or acquired after separation.
