Community Property
California (CA) is a community property (CP) state. There is a presumption that all property acquired during the marriage is CP. this includes wages of either spouse during the marriage. Separate property (SP) is all property acquired before or after the marriage, as well as gift, will, or inheritance. Courts have to trace to determine the character of property by tracing the source of the funds used to acquire the property
Martial Economic Community (MEC)
Begins at marriage and ends at death, divorce or intent of a spouse to permenently seperate. If spouses act as though they are still married, the MECC has not ended.
Division of Property
At divorce = CP will be equally divided
Death = 1/2 of CP belongs to surviving spouse and 1/2 to the decedents estate. A decedent can convey all of his SP and 1/2 of CP. If decedent dies without a will, the surviving spouse will get all of the CP and 1/3 of the decedent SP
Quasi Community Property
Domiciled in another state but if the property was acquitted in CA it would be CP
Putative Spouse/Quasi Martial Property
All property acquired during a void or voidable marriage which would have been CP if the marriage was valid. In order to qualify as a putative spouse, need a good faith belief that they are married, the court will treat it as though it is a valid marriage. The property of a putative spouse is QMP.
Lucas
At death and before 1984 all jointly titled property by a couple is presumed to be CP. Anything given from SP is considered a gift. Doesnt apply to bank accounts
Anti-Lucus
At divorce all jointly titled property acquired after 1984 is presumed CP unless there is an written agreement that the property is SP. Doesnt apply to bank accounts.
Reimbursement (DIP)
SP reimbursements are only allowed for down payments, improvements and principal of a loan
Commingled Funds
Commingling funds doesn’t necessarily transform or change the property from SP to CP. If a spouse can trace the SP portion it will still be considered SP. If SP cannot be traced, account is CP
Management & Control of CP
- equal power to control CP
- one spouse cant gift or dispose of without permission
- spouse cant sell or give away significant things without written consent
- businesses = managing spouse can make all the decisions but must get written notice to sell
Fiduciary Duties
Each spouse has a fiduciary duty to the other spouse to fully disclose all material acts about CP. Must act in good faith and be fair.
Premarital Agreement
An agreement made before marriage that becomes effective once married
requirements:
- written & signed by both spouses
- voluntary and not unconscionable
- deemed involuntary unless (a) independent counsel or waived in writing (b) no duress, fraud or undue influence.
cant waive child support
Transmutation
An agreement between spouses to change the characterization of an asset. CP to SP or SP to CP. Must be in writing.
Personal Injury
- during marriage = CP
- after marriage= injured spouse gets money
- CP or SP of the non injured spouse is entitled to reimbursement for expenses it paid
Pension
If Pension is earned during marriage, CP regardless of when the pension vests
Education
Not generally considered CP, however, at divorce reimbursement to the community for CP used to pay for education is allowed if the educated spouse earning capacity substantially enhanced, unless the community has already substantially benefited from the education.
Contributions/Improvements to SP Business
Where a SP business is enhanced during the marriage, the court will use one of two formulas in order to determine the other spouses share in the SP business
Pereira = Spouses management skills are the primary reason for the business growth. The SP business spouse is entitled to their initial contribution to SP business + 10% x number of years married with business. The remaining value is CP.
Van Camp= character of business is the reason for growth. the community is entitled to the reasonable salary value of spouses labor - any community expenses paid. All else is SP.
creditors
- CP is liable for all debts acquired before and during marriage by either spouse regardless of who acquired the debt
- A spouses SP is liable for his own debts and not their spouses unless the debt was incurred during the marriage and was a necessary of life for the spouse or child.
- Where one spouse expends SP to pay a community obligation, he may be entitled to reimbursement from the community if he did not intend a gift and there were sufficient CP funds available at the time, and no other special presumptions
apply. - Injury/Damage = a spouse is not liable for injury or damage caused by the other spouse, unless it benefited the community then the judgment should be from CP first then SP. If it did not benefit the community, SP first then CP.
Stocks
Stock options earned during marriage are CP to the extent that CP contributed to them. The court will apply the time rule, dividing the number of years when the spouses got married, and the total years the spouse had the stock
Contract Law
Where there is no marriage, there is no community, and any agreements the parties have as to any property would be governed by contract law, unless consideration of the contract is for sexual relations. The party claiming some of the property would have to prove their is a contract between the two.
Title of an Assest
Just because a spouse takes title to an asset in his or her name does not change the presumption of community property. Lucas & Anti Lucas
