COMMUNITY PROPERTY OUTLINE (I) CLASSIFICATION OF PROPERTY AS COMMUNITY OR SEPARATE 3 (1) Definitions 3 (a) Separate Property FC § 770 3 (b) Community Property FC § 760 3 (c) Quasi-Community Property: § 125 3 (d) Property 3 (e) Tenancy in Common 4 (2) Presumptions 4 (a) Common Law 4 (b) Statutory 4 (c) Title Based 4 (3) Limitations of Classification System Error! Bookmark not defined. (a) Putative Marriage Definition 5 (b) Rights of a Putative Spouse 5 (c) Contract Quasi-Community Property Situations 5 (e) When one partner dies: 6 (f) Serious Injury to a Partner: 6 (g) Domestic Partners 6 (h) Dealing with out of State Property 6 (i) Constitutional Limitations: Contracts 7 (4) Rules of Classification 7 (a) Basic Rules 7 (b) Valuation 7 (c) Determining Separate Non-Business Property: Amount & Tracing 7 (d) Liabilities 9 (e) Death 9 (f) Education /Training paid for by the Community 10 (g) Personal Injury Damages Received 10 (h) Business Property 11 (i) License to Practice 13 (II) SPOUSAL MANAGEMENT & CREDITORS RIGHTS 13 (1) Liability for a Spouses Actions 13 (2) Creditor’s Rights & Spousal Debt Obligations 14 (a) General Rule 14 (3) Duties to your Spouse 15 (a) § 720 Marriage is a contract of mutual respect, fidelity and support. 15 (b) § 721 Either spouse may enter into any transaction with the other. 15 (c) § 721 Marital Fiduciary Duties: 15 (d) Remedies for Breach of a Duty: 15 (4) Control of Community Assets 15 a) General Rule 15 b) Life Insurance 16 c) Gifts 16 d) Testamentary 17 (5) Reimbursement 17 (a) Spousal Support (Alimony) 17 (III) DIVISION OF COMMUNITY PROPERTY 17 (1) Methods of Dissolution 17 (a) Settlement 17 (b) Litigation 17 (2) Division 18 (a) In Life: 18 (b) In Death 19 (c) Spousal Support Doctrine (In Re Marriage of Watt) 19 (3) Post Dissolution Remedies to Enforce Orders 20 (a) Equitable Estoppel 20 (b) Relief from Fraud or Mistake 20 (I) CLASSIFICATION OF PROPERTY AS COMMUNITY OR SEPARATE (1) Definitions (a) Separate Property FC § 770 (i) All Property owned before marriage (j) All property acquired by the person after marriage by gift, bequest, devise or descent. (k) The rents, issues, and profits of the property listed above that can be TRACED to. (l) § 2627 Financial Obligations from Schooling (m) All separate property is feely alienable (n) Separate Property gives rise to Separate Property (o) Separate Property does not change its character because of a change in form or identity (Pereira). (b) Community Property FC § 760 (i) All property not Separate Property, acquired by a married person during marriage while domiciled in California. a. Valid Marriage = Ceremony (c) Quasi-Community Property: § 125 (i) Property acquired out of state when domiciled out of state, after the acquisition of which the owner becomes CA domiciliary. (j) Property that would have been Community Property had the Spouse been domiciled in CA at the time they acquired it. (d) Property (i) Any present right, whether legal, equitable, present or future, contingent or vested. Examples a. Contract Rights b. Real Property Rights i. T/C ii. J/T with right of survivorship. iii. Community Property c. Insurance Rights d. Trust Beneficiary Rights e. Professional License Rights f. Right to receive pension payments g. Right to Purchase shares or interests at a discount. h. Right to a payment upon another’s property liquidation. i. Value of a Professional Education j. Financial Liabilities** (e) Tenancy in Common (i) An Undivided Joint Ownership in property, freely alienable by each party, and that passes to each respective parties heirs. (j) A T/C Interest may be community or separate property. (2) Presumptions (a) Common Law (i) Property Acquired during marriage is community property (ii) Burden rests on party asserting property is separate to prove by i. Trad. A preponderance of the evidence, ii. Modern: clear and convincing evidence (b) Statutory (i) § 771 Earnings during Separation, when living separate are separate property. i. Date of Separation has no Definition. 1. Supreme Court has not taken a case yet. ii. Separation Definition: 1. No Present Intent of Resuming Marital Relations, AND (Von Der Nuell) 2. Parties conduct evidence a complete and final break in the marital relationship. (Marsden) (ii) § 772 Earnings after entry of judgment of legal separation are separate property. (iii) § 802 At the time of a person’s death, presumption of Community Property does not apply to legal or equitable title held by such person if the marriage has been terminated for at least 4 years. (c) Title Based (i) Women Prior to 1975: When a woman acquires title in writing, rebuttable presumption it is separate property. i. Rebuttable by words on the deed (J/T or T/E) ii. Doesn’t matter if CP used for purchase (ii) Deeds: Whatever the language of the deed says will prevail. Except, a. Property Acquired During Marriage that is a Single Family Residence, is presumed to be community property without regard to the form in the deed. Civ. Code § 5110. Except, i. Prior to 1985 an oral agreement otherwise ii. After 1985 a written agreement otherwise b. All property acquired during marriage in joint form, including TC /JT /Tenancy by the Entirety, is presumed to be community property. FC § 2580 i. T /E Requires the four unities of marriage. c. Presumption may be rebutted by the following: i. A clear statement in the deed ii. Written Agreement that the property is separate property. (iii) Tip: For Married Couples: Use Community Property with Right of Survivorship. (3) Situations Outside of Community Property (a) Putative Marriage Rights: i. Definition: A putative marriage occurs when one or both spouses relies on a good faith belief he/she is validly married but such marriage is in fact void or voidable. FC § 2251. ii. Rights of a Putative Spouse: If one spouse has a good faith belief there is a valid marriage, community property principles may be applied. FC § 300 & 2251 1. Property in Putative Marriage known as Quasi-Community Property. 2. When there are two marriages needing to split the community: (Divorce or Death) a. 50% of the estate will be assigned to each spouse. (Estate of Vargas & Hafner) 3. A surviving Putative Spouse is entitled to the deceased separate property under principles of quasicommmunit property (Estate of Leslie). 4. Equitable Estoppel: Exists where a spouse has renounced a marriage prior to a liquidation event (usually death). (Estate of Anderson) (b) Cohabitant Rights: Contract Quasi-Community Property: i. Men and Women who live together under an agreement of marriage and cohabitate will in a court of equity be treated as married on the basis of contract law (Vallera). However not for purposes of Family Law, such as consanguinity. 1. Written Agreements: a. Look for express or implied K. b. Sex as sole Consideration makes K void. 2. Oral Agreements: a. Prior to 1/1/85 Oral K for marriage does not create a putative spousal relationship. Family Law Act does not apply. Rather Contract law applies. (Marvin v. Marvin) a) Look for express or implied K. b) Sex as sole Consideration makes K void. b. Post 1/1/85 Oral K is not enforceable. Property Transmutation requires written instrument. Fam Cod § 850 ii. When one partner dies: remaining can file as a creditor against the estate on the basis of contract law. Cannot succeed per intestacy statutes. iii. Serious Injury to a Partner: No rights to proceed against the 3rd party injurer on the basis of NIED or Loss of Consortium. (c) Domestic Partners i. Pre-1/1/2000 1. Could register their partnership with the state 2. Marvin Controlled Re: K required to create quasicommmunit property. 3. No inherent property rights to other partner’s property. 4. Hospital visitation rights. ii. 1/1/2000 to 1/1/2003 1. Hospital visitation rights 2. Shared medical insurance rights iii. 7/1/2003 to 1/1/2005 1. Granted property rights to registered domestic partners. 2. Only took effect upon the death of a domestic partner. 3. Gave surviving domestic partner the same rights in the separate property deceased partner as if married. iv. Post 1/1/2005 1. Domestic Partners have the same rights as married couples have under the community property system. v. Legislature didn’t tell if law should be applied retroactively. 1. Look to Civ Code § 2540: The party shall be reimbursed for the party’s contributions to the property to the extent that party traces the contributions to a separate property source (the inheritance). (d) Dealing with out of State Property 1. Analysis: 2. 1st: If possible the trial court should affect the division of the couples community and quasi community property without changing the record title to out of state properties. Cal Fam Code § 2660 3. 2nd: Key is what law controls. Disposition will be done according to the controlling law. Go back to sufficient minimum contacts, venue of choice, domicile. 4. 3rd: Concept of Quasi-Community Property (i.e. out of state property treated per CA Comm. Prop Rules) is only applicable if a divorce or separate property maintenance action is filed in CA after the parties become domiciled in CA. (Addison case) 5. (e) Constitutional Limitations: Contracts 2. The right to contract, such as insurance, is a federal right under the commerce clause so it preempts state community property laws under the supremacy clause. 3. (4) Rules of Classification (a) Basic Rules (1) Separate property produces separate property (2) Community Property produces Community property (b) Valuation 1. The court shall value the: Assets & Liabilities as near as practicable to the time of trial. 2. Except: upon 30 days notice by a moving party, the court for good cause may value all or any portion of the assets & liabilities at a date after separation and before trial to accomplish an equal division of the community estate. (c) Determining Separate Non-Business Property: Amount & Tracing i. Tracing Principles: 1. Must have accurate records for direct tracing otherwise will be assumed CP. a. Must keep records adequate to establish the balance of community income and expenditures relative to separate property income and expenditures. (Frick) b.A small sum of CP commingled with a large sum of SP will not make the SP CP. 2. To be safe, don’t commingle SP & CP cash or liquid assets of the same type in the same account. 3. Rule: Where funds are paid from a commingled account, the presumption is that the funds are community funds. a. Generally, Income from SP is SP, so rents from SP real property should be put into a personal account that never receives CP funds b.Even better, put rents from SP real property into a management company account, and any amounts to capitalize the account to pay for negative cash flow come from the management company. (Marriage of Frick) 4. Business Tracing – See Businesses ii. Using Separate and Community Property to make a purchase DURING MARRIAGE. 1. Break the property into its two constituent parts: Prior to 1984: 2. No tracing to separate property. All property acquired while marriage regardless of how became community property. 1984 & After: § 2640 enacted 3. Separate Property = Separate Property put into the purchase that can be traced back to used for: a. Includes: down payments, payment for improvements, payments that reduce loan principle. b. Does not Include: interest, maintenance, insurance and tax payments on the property. c. Included Property: Shall be reimbursed up to the net value of the property at the time of division without adjustment for time value of money or inflation. 4. Community Property = FMV – Separate Property – Current Liabilities = Equity. Equity = Community Property. iii. Using Community Property to pay obligations on Separate Property. Determining the Community Interest in the Property: 1. Principle only reduction doctrine: (Moore case) a. (Principle Loan Reduction using CP funds) /(Purchase Price) = CP % interest. b. Multiply CP interest % times the total equity in the property = CP share of the equity in the property. c. Add CP share of the equity + the principle loan reduction amount using CP funds to get total CP amount. d. This technique is skewed because of amortizations schedules being all interest up front. 2. Frick Method: iv. Property Received on Credit 1. Presumption property acquires on credit during marriage is CP, Rebutted if: 2. Prove that the seller or lender primarily relied on the purchasers separate property (Gudelj and Grinneas cases), or 3. (d) Liabilities 1. The court shall characterize liabilities as separate or community and confirm or assign them to the parties. 2. Debts Incurred by either spouse before marriage are their own individual debts and shall be excluded from community property calculations. § 2621 3. Debts incurred during marriage and prior to separation shall be Community Liabilities. § 2622 4. Community Liabilities exceed total community assets, the excess debt shall be assigned as the court deems just and equitable, a. Taking into account the parties relative ability to pay. 5. Marital Debts incurred after Separation: a. Debts for the common necessities of life or the lives of children shall be confirmed to either spouse according to the parties’ respective needs and abilities to pay at the time the debt was incurred. b. Debts for non-necessaries shall be confirmed without offset to the spouse who incurred the debt. 6. Marital Debts not incurred for the benefit of the community: Shall be confirmed to the individual incurring the debt without offset. 7. The liability of a married person for death or injurty to person or property shall be satisfied as follows: a. A Married person is not liable for any injury or damage caused by the other spouse, except i. In cases where the married person would be liable if the marriage did not exist. (e) Death i. If spouse who dies has a will, then community property half that exists under the will passes to whoever the will names. (Ashodian) ii. If a spouse dies intestate, the surviving spouse receives the community property half per the tree of consanguinity AND gets a stepped up basis to the FMV at the time of death. iii. Joint Tenancy only steps up the basis as to half the property. iv. Distribution of Property upon the death of a widow 1. Who Does Community Property Go To? 2. Who Does Separate Property Go To? (f) Education /Training paid for by the Community (ix) When SP pays for that Spouses Education i. § 2627 – Separate Education during marriage gets benefit of the education, but upon dissolution only that person is responsible for the loans resulting from that education. (x) When Community Funds pay for one or both educations or educational loans (tuition only) that: 1. substantially enhances the earning capacity of a party, 2. the educated party must reimburse the estate with interest at the legal rate accruing from the end of the calendar year in which the contributions were made, and 3. such reimbursements shall be treated as community property. § 2641 4. A loan incurred during marriage for the education or training of a party shall not be included among the liabilities of the community for the purpose of division pursuant to this division but shall be assigned for payment by the party. 5. Separate property used to pay another spouses educational expense: Gift? (g) Personal Injury Damages Received (1) Separate Property If: (FC § 781) i. If COA arose: ii. After the entry of judgment of dissolution of marriage or legal separation. iii. While living separately. iv. Except: 1. If expenses paid by the community or other spouse’s SP, there shall be reimbursement. 2. Or if one spouse has a COA against the other spouse arising during marriage and received damages. (2) Community Property : i. Money and other property received or to be received by a married person in satisfaction of a judgment is community property if the cause of action for the damages arose during the marriage. ii. Except: Such CP shall be assigned to the party who suffered the injuries, unless the court thinks it s equitable to do otherwise (but not less than 50% to the injured party). iii. Is there an offset? Does not say so in the code. (h) Business Property (3) Basic Tracing and Characterization Rules apply. (4) When Separate Property combines with Community Property in the production of something new, the new production should be apportioned according to the relative separate and community contributions. (P 272) (5) Services rendered by one spouse are to their business are ‘Community Services’ in that the payment for work rendered in CP. (6) A community does not acquire a separate property business merely because it is incorporated during the marriage. (7) A court may select whatever formula will achieve substantial justice between the parties. (Tassi). Two Methods of Valuation & Tracing Which method is used depends on (1) the evidence available and , (2) Whether the increase in value during marriage was primarily due to a spouse’s efforts or due to separate property capital. If the former, apply whichever approach will yield the greatest community gain. If capital is the most significant, the approach yielding the largest separate property gain should be chosen. (8) Periera i. General: Allocate a fair return on the separate property investment as separate income, with any excess value as CP. ii. Calculation: Business Valuation – (SP contribution + Rx % Return on SP Contribution) = Community Property. (9) Van Camp i. Determine Rx value of the spouse’s services, allocate that amount to community property and treat the balance as separate property. (10) When two spouses invest and work on the same business:: i. Establish Capital Account for each Spouse based on initial investment. ii. Value a Rx. Return on the initial investment to account for time value of money & risk iii. Add that amount to each parties’ capital account iv. For the operator(s): value their labor contribution per what the market bears over the term of the biz until divorce. v. Add each individual’s labor contribution together as CP. vi. Value the business. 1. Valuing Closely Held Stock (IRS rev. ruling 59-60 (1959) methodology) i. Ascertain net market value of the property which those shares represent and assign each share its proportionate worth. Factors: ii. Nature of the business and history of the enterprise from its inception iii. The economic outlook in general and the condition and outlook of the specific industry in particular iv. The book value of the stock and the financial condition of the business. v. The earning capacity of the company vi. The dividend paying capacity vii. Whether or not the enterprise has goodwill or other intangible value. viii. The sales of stock and the size of the block of stock to be valued ix. The market price of comparable companies that are traded. vii. Perform Calculation and Choose the Winner 1. Periera Method: Subtract the Capital Accounts as SP. The balance of value is CP 2. Van Camp Method: Subtract the CP from services. The balance of value is SP. Taking Money Out of a SP Business (11) When a business owned by a Spouse makes a payment to the Spouse: Determining what is CP payment for services rendered and what is SP business earnings: i. First, document what is salary or a guaranteed payment for services. This is CP. Make it what the Rx market would bear as experts will be allowed to testify on this. ii. Dividends or Cash Disbursements SP? (i) License to Practice (xi) The right to practice law is a property right which cannot be classed as community property, however, (xii) The value of the practice at the time of dissolution of the community is community property. (II) SPOUSAL MANAGEMENT & CREDITORS RIGHTS (1) Liability for a Spouses Actions (a) A married person is not liable for any injury or damage caused by the other spouse except in cases where the married person would be liable if the marriage did not exist. FC § 1000 Satisfaction of Liability: The liability of a married person for death or injury to person or property shall be satisfied as follows: (1) Act for Benefit of Community: If the liability of the married person is based upon an act or omission which occurred while the married person was performing an activity for the benefit of the community, the liability shall first be satisfied from the community estate and second from the separate property of the married person. (2) Act NOT for Benefit of Community: If the liability of the married person is not based upon an act or omission which occurred while the married person was performing an activity for the benefit of the community, the liability shall first be satisfied from the separate property of the married person and second from the community estate. i. Marriage of Stitt (1963): The court found it appropriate to assign the full financial responsibility for the wife's embezzlement to the wife, preventing her assertion of "community debt" from diminishing the husband's share of the community property. ii. Marriage of Bell (1996): Tortious Spouse SP liable for: (i) attorney fees from her defense in both the civil and criminal actions, (ii) payment of state and federal tax liabilities stemming from the embezzlement, (because appellant engaged in intentionally tortious and criminal activity for which respondent was unaware). Civil settlement amount to come out of CP because community had received the benefit of the embezzlement. (3) Insurance Proceeds: This section does not apply to the extent the liability is satisfied out of proceeds of insurance for the liability, whether the proceeds are from property in the community estate or from separate property. Notwithstanding Section 920, no right of reimbursement under this section shall be exercised more than seven years after the spouse in whose favor the right arises has actual knowledge of the application of the property to the satisfaction of the debt (2) Creditor’s Rights & Spousal Debt Obligations (a) General Rule: Except as otherwise expressly provided by statute, the community estate is liable for a debt incurred by either spouse before or during marriage, regardless of which spouse has the management and control of the property and regardless of whether one or both spouses are parties to the debt or to a judgment for the debt. (FC 910a) i. “During Marriage" includes: 1. Contracts = debt incurred at time contract ratified (i.e. if during marriage them community debt). (FC 903) 2. A debt incurred for the necessaries of life while the spouses are living together (FC 914) 3. Except as provided in Section 4302, a debt incurred for common necessaries of life of the person’s spouse while the spouses are living separately. (FC 914) i. “During Marriage” does not include: 1. The period during which the spouses are living separate and apart before a judgment of dissolution of marriage or legal separation of the parties. (FC 910b). (b) Exception:: i. Earnings of a married spouse during marriage are not liable for a debt incurred by the person’s spouse before marriage so long as they are 1. Held in a deposit account in which the person’s spouse has no right of withdrawal and 2. Are un-commingled with community property. (FC 911) (c) Exception: A person’s SP is liable for that person’s premarital debts but not their spouse’s. (FC 913). (3) Duties to your Spouse (a) § 720 Marriage is a contract of mutual respect, fidelity and support. (b) § 721 Either spouse may enter into any transaction with the other or a third party, respecting property, which either might if unmarried. (c) § 721 Marital Fiduciary Duties: i. Confidentiality ii. Good Faith and Fair Dealing 1. Full access to books and records 2. To give the other spouse true and full information on all things affecting community property. iii. Duty as a Trustee (loyalty and prudence) to account to the other spouse any benefit derived from any transaction by one spouse without the consent of the other with Community Property. iv. Duty of Care (in new version of statute). (d) Remedies for Breach of a Duty: i. A court may order: 1. An accounting 2. Spouse’s name added to title of property 3. 50% of an asset disposed of in breach at it highest valuation 4. When fraud or malice: 100% of an asset disposed of in breach. (e) No Trustee Fiduciary Duty if Self Interest: A managing spouse does NOT have a fiduciary duty as a trustee (prudent investor), if managing spouse has a self interest. (Duffy) (f) No Violation of SEC: Managing Spouse has no duty to share inside information if it is prohibited by Federal securities laws because Securities Laws preempt Community Property law. (???) (4) Control of Community Assets a) General Rule: Either party has the same absolute power of disposition, other than testamentary, over CP as they do over SP, except: (FC 1100) 2. No gifting 3. No selling for less than fair and reasonable value, 4. Without written consent of spouse. 5. No selling or encumbering community real property used as the family dwelling or clothing or apparel of spouse. a. Other Real Property: Both spouses must join in executing any instrument by which CP is: FC § 1102a 2. Leased for >1 Year 3. Sold a. Droger: Community Property principles of equal management and shared responsibility mandate that the non-consenting spouse is entitled to invalidate in its entirety the other spouse’s transfer of community real property, to do otherwise would make community property like a tenancy in common and a spouse could find themselves living with a stranger. b. EXCEPTIONS: 4. When a spouse holding record title conveys to a BFP’s, they are presumed to have a valid purchase if after 1/1/75. FC § 1102(c)(2) a. A spouse may recover the property for the benefit of the Community and the BFP must be made whole. (Mark v. title Guarantee). 5. Either spouse may encumber his or her interest in community real property, to pay reasonable attorney's fees in order to retain or maintain legal counsel in a proceeding for dissolution of marriage, for nullity of marriage, or for legal separation of the parties. FC 1102(e) 6. Spouse managing a business that is all or substantially all community personal property has the primary management and control of the business. Managing spouse may act alone, but must give prior written notice to other spouse of disposition of all or substantially all of the business. 7. What about assets that have goodwill attached? Heirlooms? b) Life Insurance: A policy of insurance on the husband’s life is community property when the premiums have been paid with community funds. (How does this mesh with either party having an absolute power of disposition and the fact that this is a contract right?). i. When Primary Beneficiary Disqualifies: If the primary beneficiary of a life insurance policy disqualifies himself, the proceeds are payable to the alternate named beneficiary and not to the insured estate even though the alternate beneficiary’s interest was conditioned upon surviving the primary beneficiary as well as the insured. c) Gifts: Gifts made without the consent of the non-managing spouse are not void – they are voidable. a. Would be voided by: spousal disapproval. b. Still to be determined: Does the right survives the death of the non-consenting spouse. c. Today’s Rule: Written consent is required from non-managing spouse in order to give a gift of CP by the managing spouse. d) Testamentary a. Decedent has the right to dispose of only one-half of each community property asset to someone other than the spouse. (FC § 201) b. A husband and wife may agree in writing to a non-pro-rata division of the aggregate value of the community. PC 100(b) c. A non-probate transfer of community property upon death of one spouse without the consent of the deceased spouse is not effective. (PC 5020) (5) Reimbursement (a) Spousal Support (Alimony): First wife can levy against the community property of the second marriage for alimony payments due. i. If community property is used to pay spouse or child support obligations arising from a prior marriage, the community will be reimbursed if separate income was available at the time of the payments. Fam. Code § 915: (III) DIVISION OF COMMUNITY PROPERTY (1) Methods of Dissolution (a) Settlement i. Issues to Resolve: 1. property a. Fiduciary Duties continue until property divided 2. spousal support 3. child support ii. Court Approves Agreement iii. Agreement merges in dissolution judgment. (b) Litigation i. No Fault divorce in CA. ii. Causes of Action: 1. Irreconcilable Differences 2. Incurable Insanity iii. CCP §580 Court may not grant relief plaintiff has not asked for. iv. Jurisdictional requirements 2. Subject Matter Juris 3. In Rem Jurist over the marital “res” 4. Personal Jurisdiction 1. Sufficient Minimum contacts a. International Shoe Case 2. Where the defendant is domiciled in the forum state when the lawsuit is commenced 3. If the defendant is personally served with process while he or she is physically present in forum state. 4. Where the defendant consents to jurisdiction 5. Where there are sufficient minimum contacts that would not offend traditional notions of fair play and substantial justice. 6. “Special Appearances” do not qualify, as CA allows in person contestation of courts jurisdiction. ii. Out of State Property: Marital interests in money and property acquired during a marriage are governed by the law of the domicile at the time of their acquisition, even when such money and property is used to purchase real property in another state. iii. Continuing Jurisdiction: A court of original jurisdiction can keeps it’s jurisdiction open over any asset that is omitted from the first proceeding. iv. Court Modification 1. All marriage dissolution decrees subject to later modification by court unless there is an express provision in the written agreement prohibiting judicial modification (2) Division (a) In Life: (1) § 2551 Characterize all Assets and Liabilities as SP or CP (See § 4 above) (2) § 2550 Divide Community Estate Equally, unless 1. Parties agree otherwise in court or in writing 2. Or court decides otherwise is equitable. a. Debts incurred during marriage that were not for the benefit of the community. b. Education Loans (See § 4) c. Personal Injury Damages (See § 4) 3. When a spouse moves for a bifurcation of property, the other spouse may rebut, but only with clear and convincing evidence. (3) § 2552 Value assets and liabilities as near as practicable to the time of trial. 1. Valuation of Assets: See § 4 2. Value of a Professional Education: SP (4) Actions to avoid selling property: 1. Promissory Note from one spouse to another: a. Must discount based on interest rate, inflation and risk. 2. Courts may decide a Note is not appropriate, and order a tenancy in common with certain contingencies for sale and later division of the proceeds. 3. FC 3802(b) Deferred Sale of Home – usually to minimize impact on children. May be modified or terminated at any time by court. (5) When Assets < Liabilities 1. Court has discretion of what is equitable, depending upon respective earning capacities of the spouses and other relevant factors. (6) § 2554 – Small estate of $50k or less and parties can’t agree shall go to arbitration. (b) In Death i. PC 100: On death of a married person, 50% of the decedents share of CP goes to the surviving spouse, half to the decedent spouse’s estate. ii. PC 101: Quasi CP treated same as CP iii. PC 6101: A testator can dispose by way of will: 1. his/her entire amount of SP 2. 50% of Community Property iv. PC 6401: Spouse who dies Intestate: 1. Surviving Spouse gets all of Testator’s CP and Quas-CP 2. SP = no kids, then Surviving Spouse Takes a. If 1 child, split 50/50 with child b.If >1 child, 2/3 to kids, 1/3 to Spouse. v. Remaining Spouse is Liable for Community Debts (Rumsey) vi. Estate of Deceased is liable for the liabilities of the surviving spouse. (c) Spousal Support Doctrine (In Re Marriage of Watt) i. Definition: The higher earning spouse ii. Rule: The standard is the standard you had while married, not the standard your former spouse is able to attain after separation. iii. FC § 4330: In a judgment of dissolution of marriage or legal separation of the parties, the court may order a party to pay for the support of the other party an amount, for a period of time, that the court determines is just and reasonable, based on the standard of living established during the marriage, taking into consideration the circumstances as provided in Chapter 2 (commencing with Section 4320). iv. When making an order for spousal support, the court may advise the recipient of support that he or she should make reasonable efforts to assist in providing for his or her support needs, taking into account the particular circumstances considered by the court pursuant to Section 4320, unless, in the case of a marriage of long duration as provided for in Section 4336, the court decides this warning is inadvisable. (3) Post Dissolution Remedies to Enforce Orders (a) Equitable Estoppel (b) Relief from Fraud or Mistake i. FC 2122: Grounds for Relief: 1. Actual Fraud 2. Perjury 3. Duress 4. Mistake ii. Fraud = Concealment of CP assets 1. Rule: 100% of full MKT value goes to defrauded party. 2. Must prove breach of a fiduciary duty with malice, fraud or oppression. iii. Remedies: iv. A court may order: 1. An accounting 2. Spouse’s name added to title of property 3. 50% of an asset disposed of in breach at it highest valuation 4. When fraud or malice: 100% of an asset disposed of in breach. 5. Equity will triumph over procedure a. Res Judicata only applies in part, FC 2556: A court of original jurisdiction can keeps it’s jurisdiction open over any asset that is omitted from the first proceeding.