Question 1

Personal injury recovery during marriage:

Accepted Answer

...is CP, BUT recovery will be awarded entirely to injured spouse upon divorce, unless justice requires otherwise.

Question 2

Retirement pensions are CP...

Accepted Answer

...to the extent benefits were earned during marriage. Even if not VESTED!

Question 3

If divorced person eligible for retirement does not retire...

Accepted Answer

...might still have to pay ex-spouse her share of pension.

Question 4

If retiree elects disability pay in place of pension...

Accepted Answer

...the disability pay is CP

Question 5

Stock Options:

Accepted Answer

Treated as earned from the time employee gets them, not just the year they're exercised.

Question 6

Goodwill:

Accepted Answer

Treated as CP if earned during marriage. Value using "market sales valuation" or "capitalization of past excess earnings."

Question 7

Education:

Accepted Answer

Treated as SP of the student. If CP funds paid for education, and student gained earning capacity, student may have to reimburse community for tuition paid, with interest.

Question 8

Education/training loans:

Accepted Answer

All loans (even for living expenses) still outstanding are treated as SP.

Question 9

Defenses to reimbursement for Tuition:

Accepted Answer

1)Community benefited from the education (10 yrs have passed)
2) other spouse also received community funded education
3) need for spousal support is reduced b/c of education

Question 10

Life insurance proceeds at death:

Accepted Answer

spouse gets 1 half, named beneficiary gets 1 half.

Question 11

Life insurance value at divorce:

Accepted Answer

Cash value (whole life ins.) is CP in proportion to community-paid premiums. Term ins. has no value at divorce (so holder takes it)

Question 12

Property insurance proceeds from SP:

Accepted Answer

Remain SP even if community paid the premiums on the insurance policy.

Question 13

Prenups do NOT require consideration, but ARE subject to the...

Accepted Answer

...Statute of Frauds (unless estoppel based on reliance)

Question 14

Prenup is UNenforceable if:

Accepted Answer

1)term that provides positive incentive for divorce; 2)involuntary - not knowing & with time for deliberation; 3)unconscionable when executed; 4) burdened party had inadequate disclosure of other party's wealth.

Question 15

Prenup can waive death rights, even if...

Accepted Answer

...even if it doesn't satisfy Probate Code requirements.

Question 16

Prenup CANNOT alter...

Accepted Answer

...marital rights and duties other than property rights.
Duties include: obligation to care for invalid spouse, evidence privileges, etc.

Question 17

Title in Joint Tenancy creates:

Accepted Answer

Each get undivided one-half interest in SP, and right of survivorship.

Question 18

Title as Tenancy in Common creates:

Accepted Answer

Each get undivided one-half interest in SP, NO right of survivorship.

Question 19

Title in Community Property:

Accepted Answer

Each get undivided one-half interest as CP, no right of survivorship unless specifically included. Neither spouse can unilaterally partition.

Question 20

"Married Woman's Special Presumption" (which now applies to men too) states...

Accepted Answer

...when one spouse purchases property and puts title in the other spouse's name only, purchaser intended a gift - so it's SP.

Question 21

When spouses pay disproportionate amounts of SP, but take joint and equal title:

Accepted Answer

1)upon one spouse's death, extra payment treated as GIFT.
2)upon divorce, SP contribution treated as a loan - should be reimbursed without interest or appreciation.

Question 22

If family expenses paid from SP in a commingled account...

Accepted Answer

...proponent of SP must prove it using Tracing. If he can't, the entire commingled account will be treated as CP. Presumption also arises if account is jointly titled.

Question 23

Exhaustion method of Tracing:

Accepted Answer

If at the time the asset was purchased, all community funds were exhausted, this shows SP was used.

Question 24

Direct Tracing method:

Accepted Answer

If at the time the asset was purchased, SP funds were available, and SP proponent intended to use those funds.

Question 25

Van Kamp accounting for an SP business that is enhanced with community funds or labor:

Accepted Answer

Value H's labor at salary rate, then subtract family expenses paid from business earnings. This is H's earned profit - which becomes CP. Any other biz profit goes to biz's SP owner.

Question 26

Pereira accounting for SP that is enhanced with community funds or labor:

Accepted Answer

Calculate reasonable rate of return for biz, add SP owner's original principal. This is SP value. Any profit/value beyond that is CP.

Question 27

Where CP is used to pay mortgage on SP property:

Accepted Answer

Community becomes owner of proportional interest based on amount paid.

Question 28

Where one spouse uses community funds to improve other spouse's SP:

Accepted Answer

Improvements treated as gift!

Question 29

Where one spouse uses community funds to improve their OWN SP:

Accepted Answer

No gift, so community is entitled to reimbursement based on: 1)cost of improvement, 2)increased value of property - which ever is more!

Question 30

If community buys an asset with part SP and part CP...

Accepted Answer

...each will own in proportion to amount paid

Question 31

Each spouse entitled to one-half interest in each community asset. To deviate:

Accepted Answer

The court can award assets to effect substantially equal division of the estate, as it deems proper.

Question 32

When liabilities exceed assets...

Accepted Answer

...court divides debt equally, EXCEPT can take into account parties’ relative ability to pay.

Question 33

Tort liability incurred by one spouse (who’s NOT acting for benefit of the community)...

Accepted Answer

...will take on the debt as SP.

Question 34

Assets and liabilities should be valued when?

Accepted Answer

As close to the time of trial as practicable.

Question 35

Spouse-managed business where primary asset is accounts receivable should be valued when?

Accepted Answer

At the time of permanent separation.

Question 36

Transfers between spouses at the time of divorce are...

Accepted Answer

...NOT taxable events.

Question 37

Tax liability incurred by selling of community assets at divorce should be...

Accepted Answer

...apportioned equally between the spouses.

Question 38

A property distribution during divorce can be challenged through two statutory schemes:

Accepted Answer

1. Cal Civ Pro Section 473(b)
2. Family code

Question 39

Relief from judgment under the Family Code:

Accepted Answer

Relief w/in 1 year from judgment resulting from fraud, mistake, perjury, nondisclosure, or w/in 2 years for duress or mental incapacity. Or with NO time limitation if EXTRINSIC fraud/mistake/duress.

Question 40

Relief from judgment under Cal Civil Procedure Section 473(b):

Accepted Answer

Relief within 6 mths from judgment taken against him thru his mistake, inadvertance, exclusable neglect.

Question 41

Invalid inter vivos transfer of CP by one spouse will, at that spouse's death...

Accepted Answer

...be treated as valid testamentary transfer of that spouse's half of the CP.

Question 42

Survivor's duty to elect to take under the will or her CP rights:

Accepted Answer

If the will attempts to transfer more than 1/2 the CP, spouse must elect will OR CP distribution. Can take CP AND will, if this doesn't upset testamentary plan.

Question 43

CP under intestacy:

Accepted Answer

surviving spouse gets her own 1/2 CP, and inherits the decedent's CP, so she gets 100% of CP estate!

Question 44

Spouse gets ALL the decedent's SP under intestacy if:

Accepted Answer

if decedent left no issue, parents, siblings, or neice/nephews.

Question 45

Spouse gets HALF the decedent's SP under intestacy if:

Accepted Answer

...if decedent left 1 living child or 1 issue of deceased child, OR no issue but other relatives (parents, siblings, neices, nephews)

Question 46

Spouse gets ONE THIRD the decedent's SP under intestacy if:

Accepted Answer

...if 2+ living children OR 1 living child and deceased child's issue OR issue of 2+ deceased children.

Question 47

If H dies with NO surviving spouse or issue, and W died less than 15 yrs ago...

Accepted Answer

...realty derived from W goes back to her family line.

Question 48

If H dies with NO surviving spouse or issue, and W died less than 5 years ago...

Accepted Answer

...personalty derived from W worth $10k or more goes back to her family line.

Question 49

What is Quasi-CP?

Accepted Answer

Property that would have been CP had the spouses been domiciled in California when they acquired it. Treated like CP at divorce; at death, non-owner has NO rights to it. During married life, treated as SP.

Question 50

CP acquired in another CP-law State is...

Accepted Answer

...treated as CP, NOT Quasi-CP.

Question 51

Regarding real property held out-of-state as quasi-CP...

Accepted Answer

...Cal court will try to distribute it in a way that avoids changing the title. Otherwise will require conveyances or $$ payments to equal things out.

Question 52

When out-of-state quasi-CP realty is exchanged for in-state realty, the new holding...

Accepted Answer

...is still quasi-CP!

Question 53

California land owned by out-of-state divorcees or decedents:

Accepted Answer

Distribution will be according to laws of the owner's domicile state.

Question 54

Putative spouses have all the property rights of real spouses, EXCEPT

Accepted Answer

...she stops accruing rights once she learns the marriage isn't valid. Unless BOTH of them know, and continue, estoppel may result in CP-like treatment.

Question 55

Where decedent leaves behind both a lawful and a putative spouse...

Accepted Answer

...courts will divide the estate equitably between them.

Question 56

Each spouse has equal management and control of ALL CP, and can sell, spend, encumber ALL of it, BUT...

Accepted Answer

...each spouse has TESTAMENTARY control of only half the CP.

Question 57

Transfer of real property, including lease for more than a year must be...

Accepted Answer

...executed by BOTH spouses. If not, non-consenting spouse can void the transfer.

Question 58

Non-consenting spouse has 1 year to void:

Accepted Answer

...transfers of real property or leases for more than 1 year (even to unaware 3rd party).
...a security interest in CP (though not the loan it secured) except NOT a family lawyer's lien.

Question 59

One spouse's transfer of dwelling, household furnishings or clothes (NOT bank accounts) requires...

Accepted Answer

...written consent of other spouse (or else transfer can be voided, and transferee doesn't even get purchase price back!) EXCEPT CP business where 1 spouse has primary management and control.

Question 60

One spouse can only make a gift from CP...

Accepted Answer

...with other spouse's written consent or ratification. If not, non-consenting spouse can revoke the gift, or, if donor-spouse has died, reclaim it from donor's estate.

Question 61

Fiduciary duty of spouses:

Accepted Answer

act in highest good faith and fair dealing with other spouse and in management of CP.

Question 62

Deliberate, grossly negligent, or reckless conduct in managing CP, esp. conveying or encumbering the family dwelling...

Accepted Answer

...is actionable (seek an accounting, or bring claim if breach results in "substantial impairment" of spouse's interest)...within 3 year time limit, or at death or divorce.

Question 63

Spouse can be criminally liable for...

Accepted Answer

...intentionally damaging CP or other spouse's SP.

Question 64

When do tort, contracts, and other debts arise?

Accepted Answer

Tort: at time it was committed. Contract: at time it was made. Others: at time the obligation arises.

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Community Property

Comm. Property for Cal Bar Exam 2009 - DONE!