This is an extract of our Community Property Bar Outline document, which we sell as part of our Community Property - Bar Exam Outlines collection written by the top tier of Thomas Jefferson School Of Law students.
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COMMUNITY PROPERTY OUTLINE
1. (4) Introductory Sentences a. "California is a Community Property state. There is a Presumption that all property acquired during marriage is Community Property. In California, all property acquired during marriage is community property. Separate Property is property acquired before marriage or after permanent separation, or acquired by gift, bequest, devise or decent with rents issues and profits thereon." b. DATE OF MARRIAGE (4 Ways) i. Married - Capacity, License, Witnessed ceremony, Registered with the county recorder.
1. CA recognizes a marriage from another jurisdiction (Except for same sex marriages)
2. Marriage can't be void (no incest/pre-existing marriage)
3. Common Law marriages do NOT exist in CA a. Exception - CA recognizes valid common law marriages from another state.
4. Same-sex marriages do NOT exist in CA a. Exception - CA recognizes same sex marriages as valid that occurred after the In re Marriage Cases but before the effective date of Proposition 8. i.e. the same sex couples may claim CP rights as Spouses, not Domestic Partnerships ii. Domestic Partnership - All laws pertaining to married persons apply to DP's
1. Filing - Declaration of domestic partnership with the Secretary of State
2. Include - (1) Same Sex couples, or (2) Elderly who receive social security benefits. i. Quasi-Marital Property
1. Quasi-marital property - property acquired during a putative marriage which would have been community property if the marriage was NOT void. (Treat as CP)
2. Putative Spouse - When a spouse has an objectively reasonable and good faith belief that they are married but through no fault of their own they are not. a. Rationale -created to deal with equitable situations. ii. Marvin Actions - Contracts that allow you to get into Family Law Court
1. Rule - Courts should enforce express contracts between non-marital partners, unless the contract is founded on illegal sexual services. If no contract exists, courts look to see if the parties' conduct demonstrates a tacit understanding of an implied contract.
2. Result - All property acquired during a Marvin Action will be treated as CP.
3. Examples - Cohabitation with no marriage, Same sex Relationships. c. DATE OF SEPERATION (DOS) - date when marriage is Irretrievably Broken. i. Irretrievably Broken - The economic community ends when:
1. Permanent physical separation, AND
2. Intent NOT to resume the marital relationship a. i.e. look to whether the parties are maintaining the facade of marriage b. Note - Parties may agree as to the date of separation.
2. JURISDICTION OF THE COURT - The court has limited jurisdiction to determine what is CP and divide it EQUALLY (50/50). a. Court shall only confirm SP assets back to the SP holder b. The court has NO right to divide SP (i.e. not a court of equity)
c. Continuing Jurisdiction - The court has continuing jurisdiction to award CP that was not previously adjudicated. (i.e. royalties from a book written during marriage)
3. EQUAL DIVISION REQUIREMENT - The general rule is that the court must divide each and every community asset equally, unless there is a written agreement to the contrary. a.
Exceptions: i. Economic Circumstances Warrant - When economic circumstances warrant, the court may award an asset of CP to one party and cash out or order payments to the other party.
1. Use - This exception is used when a major item of community property is NOT reasonably subject to division and there is a critical need to maintain the asset.
2. Examples - Family residence, Business, Pension. ii. Statutory Exceptions
1. Misappropriation - One spouse misappropriates CP either before or during divorce.
2. Educational Expenses - the community is entitled to reimbursement for actual costs incurred for educational expenses (tuition and books) IF: a. The education substantially enhances your earning capacity, AND b. Within the 10 years from the completion of education (i.e. theory is that after 10 years there is a presumption that the community has already benefited)
3. Tort Liability - The community is subject to the tort liability of either spouse. a. Act Benefiting Community - Liability is first satisfied from CP, then SP b. Act NOT benefiting Community - Liability is first satisfied from the tortfeasor spouses SP, then CP. The innocent spouse is NOT personally liable
4. Personal Injury Award - If there is a personal injury from the DOM to the DOS there is a presumption that all of award will be the SP of the injured spouse. a. Note - what is important is date when injury occurred and not when monetary recovery date is. b. At Death - If the award is still existing unspent at the injured spouses death, the PI award will be treated as CP.
5. Negative Community - When community liabilities exceed assets, the relative ability of spouses to pay the debt is considered.
4. QUASI COMMUNITY PROPERTY - Property acquired in another state that would be CP if it was acquired in CA but it was not. a. Divorce- California Courts treat QCP as CP and it is subject to the equal division rule. b. Death - The surviving spouse has a one-half interest in the decedent's quasi community property. Decedent has NO rights in the survivor's quasi community property. c. Property Acquired in another CP State - Treated as California CP and not as QCP. d. Jurisdiction - CA court has personal jurisdiction over the spouse and may order him to execute any conveyance necessary.
5. DATE OF VALUATION a. Rule - The court shall value assets and liabilities as close to the time of trial at practicable.
b. Exception - Closely held business is valued at Separation. (i.e. spouse can't purposely lower value)
6. GIFTS - The court has the ability to determine if the gift is truly a gift or if it is given because of work preformed. If given for work performed than it is CP.
7. PRESUMPTIONS a. "Married Woman's Presumption" - BEFORE 1975, property that was acquired during marriage in a (1) married woman's name alone or in (2) her name and a 3rd party, is presumed to be the wife's SEPARATE property. i. Funds - Does not matter where the funds came from. (i.e. could be ALL CP) ii. Rationale - Husband had control over assets. If the property is placed in Wife's name alone or in Wife's name and a 3rd parties, it must be that he intended to make it that way. iii. Rebuttable Presumption - this presumption is rebuttable by the husband as against the wife, but NOT as against third party bona-fide purchasers. iv. Special Note - If title in the Husband and Wife's name, but not in joint tenancy form, and not as husband and wife, the wife will receive 1/2 SP, and the husband will receive 1/2 SP. b. Community Property Presumption - All property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is CP. i. Rebuttable Presumption - Spouse may overcome the presumption by preponderance of the evidence by tracing the separate property acquisition of the property.
1. Commingled Funds - Difficult to prove acquisition with SP funds. Must use one of two accounting methods to overcome the presumption of CP: a. Exhaustion - All of the CP funds have been exhausted from the account. i. Family Expense Presumption - Presumption that expenditures for family expenses were made with CP funds. b. Direct Tracing Method - (1) Sufficient SP funds were available, and (2) Spouse intended to use SP funds to buy the asset. c. Property Held in Joint Form - Property acquired by the parties during marriage in joint form, including property held in TIC, JT, or husband and wife, is presumed to be CP. i. Presumption may be rebutted by:
1. Express statement in a deed or other documentary evidence of Title stating SP, OR
2. Written Agreement declaring that the property is meant to be SP Essay Quote - "California allows spouses to opt out of CP characterizations by agreement. Agreements made before marriage are governed by the Uniform Premarital Agreement Act. Agreements made during marriage to change the character of an asset are called Transmutations."
8. PREMARITAL AGREEMENTS (Uniform Premarital Agreement Act) a. Scope of Agreement i. Can waive nearly ANY rights and assets (i.e. spousal support and property rights) EXCEPT:
1. Address child custody, visitation or support
2. Include anything that violates public policy (Encourages divorce) b. Pre-nuptial Agreement Requirements i. In Writing and Signed by both parties
1. Exceptions: (1) The executor promise is fully performed, or (2) Estoppel based on detrimental reliance. (Note - Marriage alone is not sufficient performance) c. Defenses
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