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COMM PROPERTY: CHECKLIST 5
SOURCE
PRESUMPTIONS & LAW
ACTIONS
DISTRIBUTION
COMM PROPERTY: OPENING STATEMENT
CA is a CP state. All property acquired during marriage is presumptively CP. All property acquired before or after permanent seperation is presumptively SP. Any property acquired by Gift, will or inheritance is presumptively SP. Also any rents & Profits from SP.
COMM PROPERTY: CP
Prop acquired during marriage thru
A. Salary/Earnings
B. Income from CP assets

CP Presumption unless:
1. Agreement
2. Taken in form that overcomes presumption

Burden of proof that particular asset is SP is on party so contending
COMM PROPERTY: EXTENDED 2004
1. Registered Domestic Partners: Retroactive to 1/1/2000
    i. Same Sex Couples
    ii. Elderly Opposite Sex Couples receiving SS benefits
COMM PROPERTY: ECONOMIC COMMUNITY ENDS
1. Permanent Physical Separation
2. 1 Parties Intent not to Resume the Marital Relation
COMM PROPERTY: DIVISION ON DIVORCE
1. Absent agreement all CP divided equally
    i. General Rule: Each & every community asset & liability 50-50

Exception:
1. Economic Circumstances: Family residence, Closely held Corp, Pension
2. Statutory: 1 spouse ends up with more than 50%
    i. Missapropriation
    ii. Educational Debts
    iii. Tort Liability: Activity not for commnuity benefit
    iv. Personal Injury: On divorce all goes to injured spouse
    v. Community liabilities exceed assets

2. Disparity in earning power can be considered only for Child Support & Spousal Support
COMM PROPERTY: DIVISION ON DEATH
Will:
    i. Dispose of all SP & 1/2 CP

Intestate:
    i. CP awarded to surviving spouse
    ii. 1/3 to All SP awarded to surviving spouse depending on issue or parents surviving

Widows Election Will
1. Take under the Entire Will; OR
2. Take against the Will
COMM PROPERTY: LIFETIME GIFTS
1. Neither spouse can make a gift of CP w/out written consent from other
    i. Before Divorce: Set entire gift aside
    ii. After Divorce: May take equal offsetting CP assets to recover 1/2 CP
    iii. After Death: Set gift aside as to her 1/2 CP. Recover from donee or H's estate
COMM PROPERTY: FIDUCIARY DUTY; PRESUMPTION OF UNDUE INFLUENCE
If 1 spouse gains an advantage from a transaction, a presumption of undue influence arises.

1. Grossly negligent & Reckless Investment of CP funds
COMM PROPERTY: PREMARITAL AGREEMENTS
General Rule: Must be in writing, signed by both
May agree to anything except Child Support

Exceptions:
1. Oral Agreement is Executed or Fully Performed; conduct substitutes writing requirement
2. Estoppel: Detrimental Reliance

Defenses:
1. Not Signed Voluntarily
    i. Independent Legal Counsel
    ii. 7 days to sign
    iii. Fully Informed in Writing if no counsel
2. Unconscionability
    i. Spousal Support: May be waived or Modified unless;
      A. Not represented by counsel OR
      B. Unconscionable at time of enforcement
    ii. Unconscionable when made
      A. No full disclosure
      B. Rt to disclosure not waived in writing
      C. No knowledge of prop or finances 
COMM PROPERTY: TRANSMUTATION
Agreement between the parties to change the character of an asset

Before 1985: Oral transmutation allowed
After 1985: Must be
1. In Writing (SOF, Estoppel, Performance DOES NOT APPLY)
2. Signed by adversly affected spouse
3. Explicitly state change in ownership being made

Exceptions:
1. Gifts of personal prop (Inherited Jewlery) which are not substantial in value
2. Stmt in Will prior to death not admissible to show transmutation
COMM PROPERTY: CREDIT DURING MARRIAGE
1. Community Credit Presumption: Funds borrowed or goods purchased during marriage
    i. Borrowed funds & Credit purchases are classified by Primary Intent of Lender
    
ii. General standing or personal creditworthiness=CP
COMM PROPERTY: HOW TITLE IS TAKEN
General Rule: Asset titled in 1 spouses name does not overcome CP presumption

Before 1975: Married Woman's Special Presumption
Property taken in a married W's name alone before 1975.
1. Title taken in W's name alone before 1975 = Presumed W's SP
2. Title taken as H&W before 1975=W 1/2 SP, 1/2 CP
3. Title in W & 3rd party before 1975=W is TIC w/3rd party

Joint & Equal Form=H&W, H&W husband & wife, Mr. & Mrs. H&W, H&W JT

Lucas (Death): Any SP used to acquire the asset is Presumed to be Gift & no reimbursement, unless agreement

Anti-Lucas (Divorce): 
1. Ownership: CP presumption
    i. Rebutted by Express stmt in deed that prop is SP
    ii. Rebutted by Written Agreement that prop is SP
2. Reimbursement
    i. SP contributions of CP entitled to reimbursement for DIP
COMM PROPERTY: INSTALLMENT PURCHASE PRE-MARRIAGE; DEBT PAID W/CP POST-MARRIAGE
ProRation Rule:
    1. Also applies to Whole Life Ins Policy
    2. Term Life Ins Policy=Last premium paid determines character

W buys house for 100K. 30K down. W gets married & pays 70K with CP funds. House now worth 500K

Principal debt reduction attributable to CP 70K
          OVER
Purchase Price 100K

7/10CP = 350K CP
3/10SP = 150K
House(500K)
W gets 325K (1/2 of W's CP (175K)+W's SP (150K).
COMM PROPERTY: CP USED TO IMPROVE SP
I. Gift Presumption
    i. Spouse uses CP to improve other spouses SP

II. Reimbursement
    i. Spouse uses CP to beneift their own SP
    ii. CP is entitled to cost of improvement or increase in value of SP which ever is greater

II. W owns SP & H uses CP to improve W's SP
SPLIT AUTHORITY
1. No Reimbursement: Presumption of gift, only rebutted by agreement
2. Reimbursement
COMM PROPERTY: GOODWILL OF PROF PRACTICE
CP if earned during marriage
COMM PROPERTY: BUSINESS OWNED BEFORE MARRIAGE; INCREASES VALUE DURING MARRIAGE
Community is entitled to a share of appreciation of business because labor used to increase value of business during marriage

Pereira: Personal Skills & Effort
    i. Value of SP at begining of business recieves interest on SP, Remainder is CP

Van Camp: Value Company or Asset.
    i. Salary of spouse's labor X years of marriage. Subtract Community expenses = CP, Remainder SP 
COMM PROPERTY: COMMINGLED BANK ACCOUNTS
Burden of Proof on spouse to show that each asset purchased with SP.
Family Expense Presumption: Presumption that family expenses were made with CP even though SP funds were available. If made with SP funds presumption of gift to Community & no reimbursement

Exception:
1. Reimbursement agreement

Exhaustion Method: 2K in bank. H put 20K SP in bank. Paid 5K for family expenses. May show CP funds were exhausted

Direct Tracing Method:
    i. Sufficient SP funds available
    ii. H intended to use SP funds to buy asset
COMM PROPERTY: PENSION & DISABILITY BENEFITS
Pension
1. Retirement benefits earned before & during marriage, whether or not vested at the time of divoce are CP

Years of Service while married 10
OVER
Total years employed to Retirement 30
EQUALS 1/3 CP pension

Disability:
    i. Either CP or SP depending on the wages they are designed to replace
    ii. In lieu of Retirement Benefits treated as such 
    iii. Classified according to when recieved, not when earned.

Severance: Argue both
1. SP because replaces future wages which after a divorce or permanent separation would be H's SP; OR
2. CP because it arose from collective bargaining agreement & was earned by employment during marriage
COMM PROPERTY: STOCK OPTIONS
1. Option awarded during marriage, doesn't vest until after economic community ends, use Proration formula. Primary intent of employer in granting the option

Time Rule:
Option for past services, deferred compensation (Hug)
    i. Starting point for numerator & denominator is date of employment.
    ii. Multiply fraction by number of stock that could be purchased.

Date of employment to date Community ends
OVER
Date of employment to date options become exercisable=CP

Option was to encourage H to remain w/company (Nelson
    i. Starting point is date options are granted

Date options granted to date of economic community ends
OVER
Date options granted to date options become exerciseable=CP
COMM PROPERTY: EDUCATIONAL EXPENSES
NOT CP
    i. Debt assigned to spouse who encurred education debt

Community Reimbursement if:
    i. Cost of education if it enhanced his earning capacity
    ii. Even if debt incurred before marriage but paid off w/CP funds.

Defenses:
1. Community already benefited from earnings of educated spouse. (10 years or more presumption of benefit)
2. Other spouse already recieved CP funded education
COMM PROPERTY: TORT/ CONTRACT LIABILITY
Personal Injury Award
    i. CP if cause of action arose during marriage
    ii. Before or after = SP
    iii. Death = CP

H driving car & W injured in accident. H's insurance pays W = W's SP.

General Rule: CP subject to tort liability of either spouse
1. Act for Community, Creditors can get CP then SP
2. Act not for Community, Creditors can get SP then CP
    i. Cannot reach SP of other spouse
COMM PROPERTY: MANAGEMENT RULES
General Rule: Equal Management Powers

Exception:
Personal Belongings:
    i. One spouse cannot sell or encumber personal property used in family dwelling w/out written consent.
    ii. Transaction voidable by spouse at any time.

Business Exception:
    i. Must give written notice to other spouse if selling, leasing or encumbers personal prop of business
COMM PROPERTY: MULTISTATE PROBLEMS/CONFLICT OF LAWS
Property acquired by the couple while living in another jurisdiction which would have been classified as CP had the parties been in CA.

Divorce: QCP treated as CP

Death:
    i. Surving spouse has 1/2 interest in QCP titled in decedents name.
    ii. Decedent doesn't have interest titled in survivors name
    iii. NonCP State controls residence
COMM PROPERTY: PROP ACQUIRED OUTSIDE MARITAL RELATION
CA doesn't recognize CL marriage

Exception:
1. CL Marriage is validly contracted in another state

H&W take prop as husband & wife but they aren't married=TIC owning 1/2 each

Only Spouses & Registered Domestic Partners can have CP.

A tells B that he wont marry but if B cooks, cleans & etc. they can have all the benefits of marriage. B agrees & gives up acting career.

Contract Law governs. Express or Implied

Putative Spouse:
    i. Objectively & good faith belief they were lawfully married.
Assets are Quasi Marital Property 50-50
COMM PROPERTY: PREEMPTION
Federal law preempts state law & in some instances federal law preempts CA from applying CP concepts to certain assets

Preemption:
1. Military Life Ins benefits
2. US Savings Bonds
3. Social Security Benefits

Not Preempted:
1. Railroad Benefits
2. Military Retirement Benefits
3. Copyrights
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