Property Categorization Flashcards
(38 cards)
Essay Starter
- California is a community property state
- there is a community property presumption that all assets acquired during marriage are presumptively CP
- There are several areas of SP: BREG
Separate Property
- Owned/earned before marriage/DP
- Rents, issues and profits of SP
- acquired during marriage in exchange for SP (source rule and involves tracing property).
- acquired during marriage by gift, will, inheritance
Community Property
- Salary or wages earned during marriage
- Income from community assets
Presumption that all assets acquired during marriage are presumptively CP (absent agreement or title taken in form that overcomes presumption burden of proof on party contending SP)
General Exceptions to CP Presumption
- Statutory Facts (SP was fruit of SP or can be traced to SP source)
- Agreement between parties
- Spouses knowingly took title jointly in form other than CP (joint tenancy along with collateral written agreement that property was not CIP)
- Title is held by person at death and marriage was terminated more than 4 years earlier
Need knowledge and consent of both spouses or presumption is not overcome.
Marital Economic Community Timing
Begins at marriage/DP
Ends at death or date of separation (minimum unilateral intent not to resume marital relation AND conduct consitent with that intent).
CP in Divorce
Divorce court has power to divide all CP and at the requset of either party jointly titled SP
Each spouse entitled to 1/2 interest in every community asset (in kind division)
Exception is **Economic Circumstances Exception **- non- pro rata division of community estate- give asset to spouse and cash out other spouse (family home.
Statutory exceptions to CP division in Divorce
- misappropriation - spouses have fiduciary duties to the other, if one spouse deliberately misappropriates other spouses interest result in court award or offset against wrongdoers share of remaining property.
- Educational Debts - treated as separate and excluded from division
- Tort Liability - no based on activity for the benefit of community assigned without offset to tortfeasor spouse
- Personal Injury award is CP but on divorce awarded to injured spouse unless intersts of justice require (economic hardship)
- Negative Community - liabilities exceed assets - then ability to pay is considered (protect creditors)
Setting Aside Community Property Distributions
- Court may relieve a party through mistake, inadvertence, surpise or excusable neglect if brought within 6 months After 6 months only external fraud or mistake)
- Family Code Relief - fraud and mistake
- actual fraud perjury or mistake - 1 year when it did or should have been discovered or 1 year of after entry of judgment
- duress based on mental incapacity - 2 yrs from entry of judgment
- failure to comply - 1 year of date from discovery and ct can impose money sanctions on non disclosure
Unauthorized inter vivos gift of CP
- no inter vivos gifts of CP without written consent of Spouse
- if not voided during lifetime then treated as valid testamentary transfer of donor’s 1/2 of community property
Exception for US savings bonds
Testamentary Gifts of CP
can transfer 1/2 CP by will
“widow’s election” if in will then surviving spouse must elect either rights under will or CP rights. but if no clause then they can assert both CP rights and rights under the will if it would not upset the decedent’s testamentary plan.
CP and Intestacy
CP and Quasi CP - suriving spouse gets their half and also decednt’s half.
Acquisitions on Credit during marriage
Presumptively community credit but ultimately classified to primary intent of the lender (show that lender primarily relied on borrower’s SP in granting loand/extending credit).
Credit scores during a marriage are community property.
Finduciary Duty to Spouse
If a spouse gains an advantage from transaction presumption of undue influence arises bc spouse has burden of proof to show they did not breach their fiduciary duty. Burden by preponderance of the evidence
Deliberate dissipation or destruction of property is actionably, grossly negligent and reckless investmetn of community funds is a breach of fiduciary duty.
Duty to account re CP reasonably necessary for exercise of spouses rights
Duty to secure consent for gifting, encumbering community personal property, selling/leasing/disposing of all personal property used in CP business or real property.
3 year SOL
Premarital Agreements
- no consideration needed
- but must be in writing signed by both parties unless fully executed (actually performed promise) or by estoppel - promissee relied to their detriment. NOTE - parites cannot agree to limit child support.
Premarital Agreements Unenforceable
**not voluntary **unless party was:
* rep’d by counsel or waived that in writing
* given at least 7 days to review and sign
* if unrepped- fully informed in writing of terms and basic effect of agreement and execute document declaring received this info.
**Unconscionable: **
* Spousal support - unenforcabe if - party not represented by independent legal counsel OR provision is unconscionable at time of enforcement
* Other Agreements - if unconscionable (matter of law for judge) when made and:
* full and fair disclosure of other party’s property or financial obligations was not made
* right to disclosure not waived in writing
* party challenging did not have adequate knowledge of other parties property/financial circumstances
Marital Agreements
pre 1985 - oral okay
post 1985-
* in writing (exceptions do not apply and extrinsic evidence not admissible to interpret)
* expressly declare change in ownership of property being made
* have consent of spouse whose interest adversely affected.
Exception for personal gifts of insubstantial value
Effect of how title is taken
Joint tenancy - 1/2 undivided interest with right of survivor ship but may partition
Tenancy in common - 1/2 undivided interest no right of survor ship
CP- 1/2 undivided interest no partition
Community property with right of Survivorship - at death vests in survivor.
Taking Title in Joint and Equal Form
Lucas - presumptively CP, absent proof of an agreement that they were to have SP interest no separate ownership and no claim for reimbursement.
Death - Lucas is law.
Divorce -
Ownership: Presumptively CP but can be rebutted by express statement in deed or other instrument of title that property/portion thereof is SP OR written agreement that property/portion thereof is SP BUT
Reimbursment DIP- reimbursement without interest for contributions to Down Payment, Improvements or Princpal
Installment Purchases
ex (Mortgage) if made before marriage and CP funds used to pay off the purchase during the marriage then proration rule applies then community establishes a proportional ownership interest to the extent that community payments reduce principal debt.
Appreciation is allocated to each estate’s ownership interest. (only to principal).
Life Insurance
Term - no cash value only death during term - the estate that paid the most recent premium is owner of the policy.
Whole Life- proration rule applies to current cash value. if insured dies cash value before death apportioned to premiums paid and ownership determiend by final premium rule
CP improving SP
Use CP to improve own SP –> reimbursement claim for greater of cost of improvement or enhanced value
Use CP to improve other’s SP –> spit of authority re whether an agreement is needed for reimbursement
Use SP to impove other’s SP –> contributing spouse entitled to reimbursement
Use SP to improve CP - anti Lucas in case of divorce and Lucas in case of Death.