CA Community Property/:Basic Definitions and Source Issues: Third Party Creditors

Separate property (SP).: Prop and debts acquired before marriage, after permanent separation, by gift, inheritance, as well as all Third Party Creditors: Note that a debt arises when a contract is made, at the time a tort occurs, or at the time
income, rents, and profits from these sources. another obligation arises (i.e., not when the judgment is formally entered).
Professional Degree: Remains prop of acquiring spouse Reach CP: CP liable for debts of either spouse before or during marriage. Except if non-debtor spouse puts CP in
Edu expense: CP entitled to reimbursement unless 10 years have passed or subs. Reduce need for support. personal account that other spouse has no right to withdraw.
Life Insurance: payment for last term of policy controls. If SP funds used, policy is SP. Tort: CP is liable if was primarily to benefit community.
Interspousal Torts: Any recovery for tort by one spouse against other will be SP of prevailing spouse Reach Debtor Spouse SP: Each spouse is personally liable for his/her own SP debt
Child/Spousal Support Oblig; SP of incurring spouse. including debts acquired before marriage, child support obligations (regardless of when ordered), and spousal
Disability Payment: treat it accord. To what it replaces. If SP then SP. support obligations.
Community Property (CP): All property and debts acquired during marriage are presumed community property, unless excepted. Reach SP of either spouse: for neccesities, but reimbursable if debtor spouse had SP.
Debts acqd during marriage: presumed CP, unless the intent of the lender was to hold SP liable. Third Party Transfers: one spouse transfers CP to someone outside the community. Spouses have equal rights of
Recovery from 3rd party tortfeasor: CP, but may be awarded entirely to the injured spouse at dissolution of the marriage management & control (since 1975), Req. written consent except if: ratified, no objection, or estoppel.
(because the purpose of a tort judgment is to make the injured party whole). Third Party Rights
Pensions/stock options: Time Rule - divide the years the asset was held during marriage (or the years employed during marriage, if this
is a pension) by the total years the asset was held (or total years employed).
If sole purpose is to get the employee to stay: Then CP share is [months between date of grant of options and date of separation]
divided by [months between date of grant and date the options are exercisable] for each share.
If the purpose is to reward past performance: Then CP share is [months employed during the existence of the community] divided
by [months between start of employment and the date the options are exercisable] for each share.
Life Insurance: "Term" v. "cash value" - For a "cash value" policy, CP gets pro rata share of cash value, based on contrib. or interest.
Disability payments: CP, if they are to replace assets acquired during marriage (e.g., to replace earnings lost by illness/injury during
marriage). If they are to replace SP, then the disability payments are SP.
Quasi-Community Property (QCP): Property (wherever situated) acquired by a married couple in another jurisdiction that would have
been CP if the acquiring spouse had been domiciled in California is QCP. QCP remains the SP of the acquiring spouse, except at any of
3 triggering events, when it will be treated as CP: death of acquiring spouse, dissolution of marriage, action by creditors.
QCP treated as CP when:
Quasi-Martial Property (QMP): Rule: Upon dissolution of a putative marriage, the court will treat QMP as CP or QCP. Property
acquired during a void or voidable marriage (such as a putative marriage), which would have been CP or QCP if the marriage had not
been void or voidable, is quasi-marital property. A putative marriage exists when at least one spouse has a good faith belief in the
existence of a marriage, but the marriage is legally invalid due to some defect.
Legal presumptions & Rules: Property acquired during marriage presumed CP (unless excepted). The presumption is rebuttable by
tracing (to SP) or by agreement.
Form of title is not conclusive: Interest is the key. Title in name of one spouse alone insuff. w/o more to overcome gen presumption.
Married Womans Presumption (prior to 1975): Title in a married woman's name alone (not as "wife") was presumed to be her SP.
Property acquired in joint form: is presumed CP, effective Jan 1987. Presumption is rebuttable by writing, by express declaration.
Preemption: Federal law may supersede California CP law: savings bonds, Soc.Sec. payments
Change in Form (Exchange Rule): change in form does not alter character of property.

Conduct By The Parties: that changes character of property

Separation: All earnings after permanent separation are SP. (1) Phys. Separation (2) no intent to reconcile(3) communication of intent.
Transmutation: Pre-nupital (1)signed (2)written(3)no consideration except marriage. Def: not voluntary(7day, disclosure, indep
counsel, no fraud/duress/undue influence; violate pub.pol. encourage divorce. Unconscionable=no full, fair, reasonable fin. disclosure.
Contributions & Improvements:
Jointly titled property (Lucas/anti-lucas):
Lucas Rule: SP funds are presumed a gift to the community, absent an agreement to the contrary.
This rule no longer applies at dissolution, but does apply if the SP spouse dies.
Anti-Lucas Legislation: At dissolution, SP is entitled to dollar-for-dollar reimbursement of principal, absent some agreement to the
contrary. SP is not entitled to any interest or appreciation.
SP real property (moore rule) : When CP funds are used to pay down a residence purchased before marriage, with title taken in the
purchasing spouse's name (not as CP), the community will be entitled to a pro rata share of the appreciation as well as its contribution.
Businesses: Perieira /Van Camp: Pereira/Van Camp: SP business appreciates during the course of the community. Apply the facts to both
a Pereira analysis and a Van Camp analysis.
Pereira: when CP time and skill are the greater factors in the appreciation
Result: SP gets a fair rate of return (commonly about 10%) on the original investment times the number of years married, plus the
original investment.
CP gets everything else.
Van Camp: when business or economic factors produce the profits. Result: CP gets a salary for the reasonable value of the services of
the owner spouse.
SP gets everything else.
Reverse Pereira/Van Camp: after permanent separation but before dissolution, a CP business managed by one of the spouses
appreciates. Apply both a reverse Pereira and a reverse Van Camp analysis.
Reverse Pereira: when the time and skill of the managing spouse are the factors in appreciation.
Result: CP gets a fair rate of return on investment times years plus original investment.
The managing spouse gets everything else.
Reverse Van Camp: When economic conditions are the greater factor in appreciation.
Result: SP gets a salary for the reasonable value of the managing spouse's services times the number of years between separation and
dissolution. CP gets everything else.