Community Property

1. 2. 3. 1. 2. Community Property Outline Basic Principles Marital Status Classification determines rights/remedies 1. Valid Marriage Community Property a. CP applies, contracted a. All prop acquired during m is CP 2. Putative Marriage b. Acquired: time, energy, skill a. Void/voidable if illegal c. Separated b. Putative: good faith belief i. Permanent physical separation c. Quasi Marital ii. Intent not to resume i. Prop acquired iii. Communicated to spouse ii. Treated as CP/QCP Separate Property iii. Put Spouse/Spuse share a. Prop acquired before m equally b. After m – gift, will, inherited d. Meretricious: knows invalid c. Rents, profits, gains from sp i. Split - entitlement d. Earnings while separated 3. Non-marital relations a. No CP in non-marital relations – contract law only b. All prop is SP c. Title controls Classifications Classifications cont’d 1. Joint form – anti lucas – Divorce Source a. Characterized by time/manner of a. Before 1/1/84 – presumed acquisition CP b. Tracing: same form as property used i. SP presmed gift to acquire ii. Unless oral agrmt b. After 1/1/84, presumed CP Presumptions a. Community Property i. SP rmbrsed i. Prop acquired during m and 1. dp Domiciled in ca Presumed cp 2. improve ii. Rebut 3. principal 1. Title paymnts 2. Agreement ii. Unless wrtn agrmt 3. Clear stmt in title 2. Actions 4. tracing a. Character may be altered by b. Married Women Presum either party i. Before 1975, prop acquired b. Transmutations with CP is presumed SP, i. Agreement presumed gift since H had between spouses to sole mgmt change character 1. title in her name of asset 2. joint form ii. PMA c. Joint Form with Husband 1. after i. Property acquired with CP 1/1/86 and SP funds and joint form need depends divided in writing divorce/death 2. Excepy 1. Death(lucas) full a. Joint name perform presumped 3. signed, no CP waiver b. Unless child agreement support c. SP presumed gift 1. 2. 3. 1. 2. 3. 4. 5. Domicile of Parties law of state where marital domicile at time property acquired governs classification Quasi CP a. Prop acquired during m while domiciled in noncp state that would have been cp if domiciled in CA at time acquired One spouse lives in CA a. Can obtain divorce b. Ct only power over instate property can: i. Award equal value in state ii. Compel convey iii. Ask full faith Classifications cont’d PMA – requirements a. Writing b. Signed by both c. Defenses i. Involuntary if no rep/waiver& 7 days to sign Post a. After 1/1/85 – writing i. Except 1. gifts Mortgage a. CP pay SP loan i. Pro rata for princ payments b. SP pay CP loan i. Reimburse for DIP only Improvements a. CP improve own SP i. reimburse b. CP improve other spouse SP i. Splitgift/reimbrse c. SP improve CP i. Reimburse for DIP Commingled accounts a. Family Expenses i. Presumed first out ii. SP pay is gift b. Proving SP assets i. Exaustion: CP funds exausted Special Rules ons a. CP and SP used to acquire – pro rata Lenders intent: reliance determines character 1. 2. a. ss a. If used CP, CP shares in increased value b. Pereira i. Increase due to CP labor ii. Initial SP value + interest x yrs = SP, rest is CP c. Van Camp i. Increase due to market ii. Fair salary x yrs – salary recd/fam expenses = CP, rest SP Qualities that generate income beyond return CP to extent: expert/earnings attrib a. b. n a. b. Not considered CP Must reimburse CP for expenses if substantially enhanced earning capacity c. Exceptions i. 10 years passed ii. Other spouse had CP educ iii. Reduced need for spousal support Injury Awards a. CP if occurred during M b. At Divorce, awarded to injured unless interest of justice otherwise c. Exceptions i. No less than 50% to injured ii. Commingled with CP iii. Occurred before M – SP iv. Between spouses v. CP – gets med expenses paid ance a. Whole: pay at death i. CP/SP – pro rata share ii. Time Rule: proportion payments iii. If take out during M, and pay with CP = CP b. Term: pay at death – no invest i. Depends on assets used nt/Pension a. CP to extent earned during M b. At Divorce: pro rata – even if not vested c. Time rule: years married/employed d. If can’t work anymore – ½ CP e. If cant pay out: buy out, retain, order 3. Management and Control Duties General: either spouse can contract, buy/sell CP without other’s consent Exceptions a. Real Property i. Transfer requires writing ii. Presumed valid if 1. BFP 2. prop is spouse name 3. recorded within 1 yr 4. no fraud or knowledge 5. Remedy: set aside if 1 yr b. Personal Property i. Transfer of belonings under FMV requires wrtn consent ii. Except: between spouses iii. Remedy: 1. set aside entire transaction 2. revoke ½ 3. reimburse 1/2 c. Business i. Managing spouse can act alone ii. Need written consent if sell/lease substantially all of personal prop Debts a. Either spouse can contract debt without others consent b. Debt: character when duty to pay arises c. Pre-Marital i. Debt before M ii. Child/spousal iii. SP of debtor always liable iv. CP is liable but not non-debtor spouse if 1. kept sep acct 2. couldn’t withdraw 3. not commingled with CP d. Marital Debt i. Debt during M ii. After divorce 1. not CP unless spouse is debtor Management Cont’d 4. 5. 6. 7. Necessities a. Common necessities b. SP liable with reibumr or SP of detor was ava Tort a. CP if for benefit of co b. If not for benefit, neg then CP Fiduciary Duties a. Act good faith b. Remedies i. Accounting ii. Det rights iii. Set aside Distribution a. Divorce i. Each item div b. Death i. By will CP or SP depends on wages covered Depends on when received not earned ions a. CP extent awared during M b. a. b.