Community Property & Family Law - Bar Review Flashcards
(29 cards)
California law
California community property law applies when the parties have a legal marriage and are domiciled in California.
Opening presumption
California is a CP state. All property acquired during marriage by the labor or earnings of either spouse is presumed to be CP. All property acquired before marriage or after divorce, death, or intentional permanent physical separation is presumed SP. All property acquired during marriage by gift, bequest, or devise, as well as the profits, issues and rent therefrom, is separate property. At divorce, each spouse is entitled to one-half interest in CP. The character of an asset as CP or SP depends on 1) source; 2) actions of the parties that may alter character; and 3) statutory presumptions affecting their disposition upon end of the marital economic community.
Quasi-community property
QCP is property that was acquired outside of CA that would be considered CP if acquired in CA. QCP is treated as SP until detah, dissolution, or divorce, where it is then considered CP.
Valid marriage
MAFC - Mutual Age Formalities Capacity; requires Mutual assent;; Sufficient age (18+); legal Capacity; Formalities (License and Solemnization).
Marital economic community
Begins at marriage and ends upon divorce, death of either party, or permanent physical separation with no intent to rekindle the marriage. Living together not required since 2017, but façade of marriage? MEC not ended. BEDDLIF (Begins Ends Divorce Death Living Intent Façade)
Transmutation - premarital agreements
A premarital agreement allows parties to contract outside of CP laws and is valid if in writing and signed by both parties. These agreements are not valid if they are involuntary or unconscionable. They are involuntary if a party is not represented by counsel, a party didn’t have 7 days to revie the agreement, a party was not fully informed in a language they understand, or if the agreement was executed under duress, fraud, undue influence, or lack of capacity. They are unconscionable if the terms are unfair or a party did not understand the extent of the other party’s property. SEFUPWU-I7 -(Statute Estoppel Full Unenforceable Promote Waiver Unconscionable Involuntary 7d) - Statute of Frauds 1/1/1986; Exceptions for full performance or estoppel; Unenforceable if:
Waive or limit spousal support not per se unenforceable; Promotes divorce; Involuntary (waived, 7 days advised to seek counsel in writing and signed); or Unconscionable (nondisclosure of wealth or unfair).
Meretricious relationship
Exists when two persons are not holding themselves out as married, but their cohabitation is more than a roommate agreement. Property is governed solely by the agreement of the unmarried parties.
Equal management and control of CP
CP may be bought,sold, and managed by either spouse without the other spouses’s consent. They may not, however, sell property for less than fair market value, and if one spouse is managing a business they are assumed to have primary control over the business’s assets. If the CP is real property, written consent of both spouses is required.
Anti-Lucas legislation
Jointly titled property purchased by a married ocuple after 1987 is presumed CP at divorce. Funds used from SP to complete the purchase are to be reimbursed to the paying party upon dissolution. Before 1987, where Lucas applied, SP was presumed to be a gift to the community and not reimbursable.
Fiduciary duties
Spouses owe the highest duties of good faith and loyalty to disclose and account to one another.
Joint checking account
This is CP, and anythign purchased from this account is CP, subject to rebuttal by tracing.
Personal injury awards
If a personal injury award was won by either spuse while married it will be CP. However, upon dissolution they become SP of the injured spouse. This does not apply in situations where the funds were commingled or in cases where the uninjured spouse suffers some form of economic hardship (interests of justice).
Separate property business
If a spouse has an SP business that gains value through work of the spouse that owns the business, their work wil be accounted for in CP calculations by using either the Periera or Van Camp methods.
Periera method
The Pereira method applies when the spouse’s skill, knowledge, and ability is the driver of growth. Under this method, they receive the original principal value fo the business, plus a reasonable rate of return of the original value – this is their SP. The value remaining is CP. pReiRa = RoR - favors labor because balance goes to CP.
Van Camp method
The Van Camp method is appropriate where the nature of the business or market conditions are the drivers of growth. Under this method, the community receives a reasonable salary (less business expenses) in return for community labor. This is the contribution to the community for owning the psoues’s labor, with the remaining value of the business remaining in the owning spouse’s SP. Van is collectors item, so it grows on its own, thus we calc a salary and five balance to SP
Transmutations
For spouses to change the character of an asset, they must agree to do so, without the need for consideration. The change must be expressed in writing, singed and consetnted to by the giver of the gift. Prior to 1985, these changes could be oral, written, or inferred, but afterward are required to be written. Transmutations are not required for personal gifts between spouses of insignificant value.
Creditor access to property
Creditors may attack CP if the debt was incurred during the course of the marriage. Special rules apply to debts that were incurred prior the marriage, where funds of a non-debtor that were not commingled may be untouchable and where SP may be attacked to pay for necessities.
Tracing
When property is acquired during the course of a marriage with commingled funds, a court may attempt to apportion ownership of the asset through tracing. If the record does not provide enough detail to assign comparative ownership, the property defaults to CP.
Assignment of debt
Upon dissolution of marriage, the court is free to assign community property debt ot either spouse based on their ability to pay the debt.
Loans
To determine character of a loan, the court will look to the intent of the lender. If based on income, the loan will likely be CP, but if based on security consisting of SP assets, it may be deemed SP.
Creditors
A creditor cannot reach the CP of the other spouse after divorce unless that spouse incurred the debt or the debt was assigned to that spouse by the court.
Pensions
If a pension is earned during marriage, it is CP. A pension can be paid as received or cashed out, and is computed by taking the number of years required to vest, and proportionally dividing the net into CP. As such, if it takes 20 years to vest, and the marirage was for 10 years during the vesting period, the CP portion is 50%. Since CP is 50%/50%, the non-employee spouse takes 25%.
Medical bills
Medical bills are paid from CP. If CP is depleted, SP of the unaffected spouse will be used to make payment, which is entitled to reimbursement by the injured spouse.
Education expenses
If CP funds are used for education expenses, they will be reimbursed to the community because they personally enhance the receiving spouse’s earning potential. However, if both spouse receive CP funds for education, if the education was over 10 years ago (community already benefitted), or if the receiving spouse will be better suited post-dissolution to pay for their own needs, the court may diverge from this default rule. CRIOSE-SE-NOR-CABS-10 (Community Reimbursement One Spouse’s Education Substantially Enhances No Other Received Community Already Benefitted Substantially 10-year)
