CP Flashcards
Community property
California is a community property state all property gain during marriage is considered community property. Community property includes property gain through labor, talents, and industry. Community property also includes debt acquired during marriage.
Quasi community property
Quasi community property is property acquired by either spouse while domicile in a non-community property state which would have been community property if the spouse had been domicile in California at the time of the acquisition
Deb/judgment
If one spouse incurs a debt during marriage that is not in the interest of community the other spouse CP funds cannot be used to pay for it. Interest of the of the community means the funds are being used for community needs.
Management and control (also talk about duties)
Each spouse maintains equal but shared control over CP assets.
Spouses have the right to manage all community assets but must do so in the best interest of the community .
CP personal property can be sold as fair market value otherwise it requires written consent from the other spouse.
CP real property can only be conveyed with the written consent of both spouses.
Fiduciary duty of spouses
(Need to do with management/ control)
Spouses owe each other fiduciary duties of care and loyalty.
The duty of care relates to the exercise of reasonable care in the management of community assets.
The duty of loyalty requires spouses act with the upmost loyalty to the community in managing CP funds, spouses cannot engage in self dealing, taking secret profits or usurping community opportunities
Separate property
Property brought into the marriage by either spouse. Also include property acquired by gift or inheritance. The spouse owning the SP has an individual right to the rent and profits from the property. The SP owning spouse has an exclusive right to management and control over the SP assets. SP includes SP debt acquired outside of marriage.
Child support
Community funds that are used to pay child support payments from a previous marriage are payable to the community as reimbursement up to the amount that owning spouse has available as SP
Pro rata rule
Allows that the community take a pro-rata portion of the value of the assets based on the percentage it contributed to the acquisition of that asset. The remainder return to the SP contributing spouse.
Putative spouse
A person who has a good faith believe that they are in a valid marriage. They are treated as if they were legally married. The assets will be quasi- material property and split 50/50.
End of economic community
The economic community exists from the date of marriage until the date of separation.
The date of the separation is the day the parties intent to live separate and apart permanently
Any further acquisitions/earnings by either spouse after the end of the community is characterize a separate property.
Necessities
Necessities include clothing, transportation, foods. Necessities may be allowed by judgment of the court to allow one spouse assets to attach to pay for the necessities of the other spouse after the end of economic activity, but prior to the date of the divorce.
Direct tracing
Allows for the characterization of funds as SP or CP
Direct tracing involves an exact accounting for the status of property by identifying its source and exact subsequent usage.
Fit> funds/ intent/ title
where did the money come from intent what was the intended characterization which spouse is the property titled?
Indirect tracing
Achieved by the use of circumstantial evidence to show that the property should be characterized as community or separate because of the impossibility of the contrary.
Tracing by exhaustion (commingling of funds)
When SP and CP are commingled and SP owning spouse seeks reimbursement from the community at divorce the court look at the total CP funds minus the family expense to determine if there are remaining SP.
Family expense doctrine
The family expense doctrine is used in cases of commingled funds. It is presumed that all family living expense are paid out of community funds.
Any SP funds that are used to pay family expenses are considered gift to the community
Perriera/ Van Camp
When one spouse brings a business into the marriage a determination must be made as to the CP value assigned to any gain from the business
Pereira > when a party spends significant CP labor in managing SP business, the community is compensated with all gains made after a reasonable return (by %) is given to the SP holding spouse. Under Pereira, we look for a unique set of talents or skill.
Van Camp (compensated through salary) - Van Camp analysis focuses on a SP business owning spouse that spends CP labor in the business, but compensates the community through a salary that is commensurate in the industry. Under Van Camp, we look for market growth or salary.
Lucas/Anti Lucas
Lucas applies when there is SP input in jointly title assets upon death of the SP contributing spouse this is considered a gift to the community.
Anti-Lucas applies when a spouse at divorce has a right of reimbursement for SP contribution towards the principle of the loan home improvement or down payment, the SP input into the jointly title asset is reimbursable.
Business Goodwill valuation
The business good will valuation is used to determine the community interest in a business that is created during the marriage.
When valuing the community interest of the business goodwill, the value of the business is subtracted by the value of the hard assets to determine the business good will.
Business exception to management and control
A spouse who is managing a CP business and has primary control may dispose of CP business assets, but must get written permission to dispose of substantially amount business assets
Moore-Marsden
A M-M calculation is required when one spouse brings separate property into the marriage and martial assets are used to pay the mortgage or improve the property. The calculation is designed to give SP owning spouse reimbursement for the down payment pre-post marriage, equity % growth in equity during marriage. Community will get the principal pay down during marriage % of equity gain during marriage.
Transmutation
A written agreement between spouses that permanent changes the characterization of property.
Oral transmutation were allowed prior to 1985.
Prenuptial agreement
Requires a signed writing by both parties. The writing must state the terms of the agreements give 7 day period to seek counsel and include a reasonable accounting for both parties disclosed to another.
A prenup cannot be used to get out of paying child support upon divorce. Waiver can be signed if no independent counsel, but the seven day period remain. Waiver must be knowingly and reasonable. (No duress, fraud or undue influence)
Education cost
The community is entitled to reimbursement of education costs of either spouse borne by the community that improved the earning potential of the educated spouse; however, is subject to a 10-year presumption that the community has been reimbursed.
Student loans
The community gets reimbursement for community payments on student loans including the interest.
Educational debt such as student loans are assigned solely to the one who occurred the debt.
(living expenses are not included)
