CA Bar Exam - Community Property || 100% Exam-
Ready: Questions & A+ Verified Solutions!!
Community Property correct answers California is a community property state. There is a
community presumption where all assets acquired during the course of the marriage are
presumed to be community property. There are areas of separate property.
Separate Property correct answers All property acquired before marriage or after permanent
separation is presumed to be separate property. In addition, any property acquired by gift,
devise, or bequest is presumed to be separate property. Property acquired during marriage
with expenditure of separate funds, as well as rents, issue and profits derived from separate
property are also separate property.
At divorce correct answers , the community assets will be equally divided in kind unless
some special rule requires deviation from the equal division requirement
At death correct answers , the decedent can devise all of his separate property and 1/2 of the
community property.
If the decedent dies intestate, the surviving spouse is automatically entitled to the decedent's
share of the community property and to some amount of separate property depending on how
many surviving issues, parents, siblings, or issues of deceased siblings. If none, then
surviving spouse inherits all SP. If one, then surviving spouse inherits 1/2 SP. If more than
one, then surviving spouse inherits 1/3 SP.
Transmutation correct answers is an agreement between spouses during marriage to change
the character of an asset. It must be made in a written express declaration that is consented to
or accepted by the spouse whose interest is adversely affected. It must expressly declare that
a change in the ownership of property is being made. Descriptions of character of an asset in
a will or inter vivos transfer are not admissible.
The spouse who gained the advantage has the burden of rebutting the presumption of undue
influence by a preponderance of the evidence.
To determine the character of any asset, courts will... correct answers trace back to the source
of funds used to acquire the asset; a mere change in form of an asset does not change its
characterization.
Personal Injury Awards correct answers If the cause of action arose (i.e. the injury was
inflicted) during marriage, the award is community property. At divorce, such awards will be
awarded entirely to the injured spouse unless the interests of justice require otherwise.
If the cause of action arose before marriage or after permanent separation, the award is
separate property.
If the award is against the other spouse, the award is always separate property.
Retirement benefits correct answers If earned during the course of the marriage, they are
community property.
, If retirement persons or other retirement benefits are earned before AND during marriage,
courts use the time rule to determine how much is attributable as community property labor
and as separate property labor.
Pension Interest correct answers A spouse's ownership interest earned during marriage is not
terminated by the death of either spouse. A spouse is generally entitled to her share of any
remaining benefits if the other spouse dies first, and she has testamentary power over her
share of any continuing benefits should she dies first.. However, ERISA allows benefits for
living beneficiaries only and preempts California law.
Also, when pensionable spouse eligible to retire but doesn't, court may order to pay share of
benefits if private employer (if public, then worker may be ordered to pay share).
Disability Pay & Workers' Comp correct answers can be either community or separate
property, depending on the wages they are designed to replace.
If they are intended to replace marital earning, they are CP. If they are intended to replace
separate post-divorce earnings, they are SP.
Severance Pay correct answers if it replaces post separation lost wages, it's SP. If it replaces
marital wages, it's CP.
Stock Options correct answers Because stock options are a form of employee compensation,
they are treated as community or separate property depending on when they were earned and
vested. If they vest during marriage, they are CP. If awarded during marriage, but bests after
the marital community has ended, then the portion considered CP is determined by whether it
is characterized as compensation for past services, future services, or both.
Business and Professional Goodwill correct answers If earned during marriage, business and
professional goodwill is community property. Courts generally use two valuation techniques:
market sales valuation or capitalization of past excess earnings.
Education and Training correct answers are not community property. The community may be
entitled to reimbursement if community property funds were used to pay for education or
training (or a loan thereto) and the education substantially enhanced the earning capacity of
the spouse.
The community is NOT entitled to reimbursement if: (i) the community has already
substantially benefited from the education or training (e.g. more than 10 years have passed);
(ii) the other spouse has also received community-funded education; or (iii) the need for
spousal support is reduced by the education or training.
When property is acquired with both community and separate property funds... correct
answers the community and separate property interests are determined by apportioning the
respective contributions.
[Note that: The mortgage is separate property because it was acquired prior to marriage and
the intent of the lender must have been to rely on that spouse's separate property. But, credit
acquired by one spouse during marriage is presumptively community credit. So, borrowing
spouse must demonstrate lender primarily relied on his SP doe it to be SP.]
Ready: Questions & A+ Verified Solutions!!
Community Property correct answers California is a community property state. There is a
community presumption where all assets acquired during the course of the marriage are
presumed to be community property. There are areas of separate property.
Separate Property correct answers All property acquired before marriage or after permanent
separation is presumed to be separate property. In addition, any property acquired by gift,
devise, or bequest is presumed to be separate property. Property acquired during marriage
with expenditure of separate funds, as well as rents, issue and profits derived from separate
property are also separate property.
At divorce correct answers , the community assets will be equally divided in kind unless
some special rule requires deviation from the equal division requirement
At death correct answers , the decedent can devise all of his separate property and 1/2 of the
community property.
If the decedent dies intestate, the surviving spouse is automatically entitled to the decedent's
share of the community property and to some amount of separate property depending on how
many surviving issues, parents, siblings, or issues of deceased siblings. If none, then
surviving spouse inherits all SP. If one, then surviving spouse inherits 1/2 SP. If more than
one, then surviving spouse inherits 1/3 SP.
Transmutation correct answers is an agreement between spouses during marriage to change
the character of an asset. It must be made in a written express declaration that is consented to
or accepted by the spouse whose interest is adversely affected. It must expressly declare that
a change in the ownership of property is being made. Descriptions of character of an asset in
a will or inter vivos transfer are not admissible.
The spouse who gained the advantage has the burden of rebutting the presumption of undue
influence by a preponderance of the evidence.
To determine the character of any asset, courts will... correct answers trace back to the source
of funds used to acquire the asset; a mere change in form of an asset does not change its
characterization.
Personal Injury Awards correct answers If the cause of action arose (i.e. the injury was
inflicted) during marriage, the award is community property. At divorce, such awards will be
awarded entirely to the injured spouse unless the interests of justice require otherwise.
If the cause of action arose before marriage or after permanent separation, the award is
separate property.
If the award is against the other spouse, the award is always separate property.
Retirement benefits correct answers If earned during the course of the marriage, they are
community property.
, If retirement persons or other retirement benefits are earned before AND during marriage,
courts use the time rule to determine how much is attributable as community property labor
and as separate property labor.
Pension Interest correct answers A spouse's ownership interest earned during marriage is not
terminated by the death of either spouse. A spouse is generally entitled to her share of any
remaining benefits if the other spouse dies first, and she has testamentary power over her
share of any continuing benefits should she dies first.. However, ERISA allows benefits for
living beneficiaries only and preempts California law.
Also, when pensionable spouse eligible to retire but doesn't, court may order to pay share of
benefits if private employer (if public, then worker may be ordered to pay share).
Disability Pay & Workers' Comp correct answers can be either community or separate
property, depending on the wages they are designed to replace.
If they are intended to replace marital earning, they are CP. If they are intended to replace
separate post-divorce earnings, they are SP.
Severance Pay correct answers if it replaces post separation lost wages, it's SP. If it replaces
marital wages, it's CP.
Stock Options correct answers Because stock options are a form of employee compensation,
they are treated as community or separate property depending on when they were earned and
vested. If they vest during marriage, they are CP. If awarded during marriage, but bests after
the marital community has ended, then the portion considered CP is determined by whether it
is characterized as compensation for past services, future services, or both.
Business and Professional Goodwill correct answers If earned during marriage, business and
professional goodwill is community property. Courts generally use two valuation techniques:
market sales valuation or capitalization of past excess earnings.
Education and Training correct answers are not community property. The community may be
entitled to reimbursement if community property funds were used to pay for education or
training (or a loan thereto) and the education substantially enhanced the earning capacity of
the spouse.
The community is NOT entitled to reimbursement if: (i) the community has already
substantially benefited from the education or training (e.g. more than 10 years have passed);
(ii) the other spouse has also received community-funded education; or (iii) the need for
spousal support is reduced by the education or training.
When property is acquired with both community and separate property funds... correct
answers the community and separate property interests are determined by apportioning the
respective contributions.
[Note that: The mortgage is separate property because it was acquired prior to marriage and
the intent of the lender must have been to rely on that spouse's separate property. But, credit
acquired by one spouse during marriage is presumptively community credit. So, borrowing
spouse must demonstrate lender primarily relied on his SP doe it to be SP.]
