How to Ace FYLSE/Community Property Outline

Introduction

California is a community property (CP) state. All assets acquired by earnings during the marriage are presumed to be CP. Assets acquired by gift, inheritance or devise or otherwise acquired before the marriage or after a permanent separation are separate property.

Marital Economic Community

Living Separate and Apart

Earnings while living separate and apart are not considered community property.

Quasi-Community Property

Property acquired in another state that would be considered CP if it were acquired in a CP state. In California, quasi-community property is treated as follows: (1) For purposes of management and control, quasi-community property is treated as separate property; (2) In cases of death or divorce, or the rights of creditors, it is treated as community property.

In 1989, Herb and Wendy married while domiciled in Montana, a non-community property state.

—F04Q2

Putative Spouse

Otherwise valid marriage that is voidable for some reason such as bigamy, may allow the putative spouse who reasonably and objectively believes there is a valid marriage to have rights similar to community property.

In 1999, Herb began having an affair with Ann. Herb told Ann that he intended to divorce Wendy and marry her (Ann), and suggested that they live together until dissolution proceedings were concluded. Ann agreed, and Herb moved in with her.

—F04Q2

Meretricious relationship

In 1999, Herb began having an affair with Ann. Herb told Ann that he intended to divorce Wendy and marry her (Ann), and suggested that they live together until dissolution proceedings were concluded. Ann agreed, and Herb moved in with her.

—F04Q2

Marvin Relationship

Courts may enforce contracts between couples who are not married so long as they are not expressly based on performance of illicit sexual acts.

In 1999, Herb began having an affair with Ann. Herb told Ann that he intended to divorce Wendy and marry her (Ann), and suggested that they live together until dissolution proceedings were concluded. Ann agreed, and Herb moved in with her.

—F04Q2

Transmutation

Property can change form and be transmuted from CP to SP. The courts will consider the source of funds if they can be traceable.

After 1987

Any property in joint title is presumed CP.

After 1985

Transmutations of property requires writing.

Prenuptial Agreement

A prenuptial agreement is valid if there is a writing signed by the testator and the spouse was represented by counsel at the time that the agreement was signed. However, there is no need for separate counsel if the spouse knew of the extent of testator’s property at the time of signing the will and she specifically waived the right to counsel in writing.

Two days before the wedding, Beth executed a prenuptial agreement waiving all rights to Tim’s estate. Beth was not represented by counsel when she executed the prenuptial agreement.

—F06Q2

Anti-Lucas

After 1985, jointly titled property was considered community property absent a desire to hold it jointly. No writing was required.

In 1989, Herb and Wendy married while domiciled in Montana, a non-community property state. Prior to the marriage, Wendy had borrowed $25,000 from a Montana bank and had executed a promissory note in that amount in favor of the bank. Herb and Wendy, using savings from their salaries during their marriage, bought a residence, and took title to the residence as tenants in common.

—F04Q2

Education

While education is not CP, the CP is entitled to repayment of the education expenses if there is a time of 10 years or less because if it is less than 10 years, there is a presumption the community has not yet received all the benefits of the enhanced earning capacity from the education.

Pereira

The growth of the business is primarily due to community labor. reasonable rate of return for the SP

Van Camp

separate property appreciated

Will

Under California law, a spouse may dispose of one half of the community property through her will.

Insurance

A term life insurance policy buys the designated protection for a term of one year. Therefore a term policy is designated CP or SP by tracing to the most recent payment. Proceeds from a whole life insurance are CP to the extent they were acquired during marriage. The time rule is applied to determine the CP interest. Proceeeds from a term life insurance policy are generally the type of the last premium paid.