CALIFORNIA COMMUNITY PROPERTY

I. COMMUNITY PROPERTY
A. The community property system views the marriage as a community in which each spouse is an equal partner. (OL I.A.)
EXAMLE!
I" X is marrie#$ every #ime earne# #uring the marriage %elongs to %oth X an# her spouse. I" they were to #ivorce$ "ive
cents woul# go to X an# "ive cents woul# go to her spouse.
B. The community property system is primarily create# %y statute. (OL I.&.)
'. The statutory community property scheme in (ali"ornia is set "orth primarily in the (ali"ornia )amily (o#e (*)am.
(o#e+).
,. A lot o" governing law also set "orth %y cases.
)act patterns will usually loo- li-e this! (ouple coming together in a true marriage or marriage alternative.
Acquiring property$ assets an# incurring #e%t. .eath or #ivorce at the en#. /ill always say *answer
accor#ing to (A law.+ (hronology0or#er an# #ates0are critical.
EXAM
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II. FORMS OF PROPERTY OWNERSHIP
A. Separate property is! (OL I.()
roperty owne# %y one spouse %e"ore marriage$ a"ter separation$ or acquire# %y one spouse #uring marriage %y gi"t$ will$
or inheritance$ is separate property
'. There may %e property that loo-s li-e a gi"t %ut is actually compensation "or wor- per"orme# #uring marriage.
Anything receive# in e1change "or la%or #uring marriage$ is community property.
,. (ategories o" separate property
a. *2ents$ issues an# pro"its+
%. roperty receive# in e1change "or separate property
EXAMLE!
3toc- given to you %y your gran#"ather on your '4th %irth#ay. .ivi#en#s are pro"its "rom your separate property.
.ivi#en#s are separate property.
I" you occasionally loo- at your stoc-$ it will still %e separate property. I" you quit your 5o% an# spen# all #ay
tra#ing stoc- an# %uil#ing a port"olio$ this is consi#ere# time$ e""ort an# la%or #evote# to improving your port"olio.
Then you are using community la%or to improve separate "un#s. 3o pro"its woul# %e community property.
(') A mere change in "orm #oes not change the character o" the property.
EXAMLE!
I" you use your separate property stoc- to %uy a %oat$ %oat is still consi#ere# to %e separate property.
c. Earnings an# other acquisitions o" either spouse while living separate an# apart "rom the other spouse are
separate property
(') *3eparate an# apart+ is #e"ine# as!
At least one o" the spouses must regar# the separation as permanent$ an# not merely a trial
separation
(a) It is as i" a line is #rawn an# all property acquire# a"ter that time will %e consi#ere# separate property.
EXAMLE!
Moving out$ ceasing se1ual relations$ planning "or #ivorce or "iling "or #ivorce.
(%) I" someone cannot move out #ue to "inancial circumstances$ it #oes not necessarily mean that they are
not living separate an# apart.
(c) I" evi#encing intent to %e separate an# apart in one way (living with mistress) %ut acting to pu%lic as i"
still together with wi"e$ court may "in# no *separate an# apart.+
(#) This is a "act6sensitive analysis.
B. Community property is the #e"ault rule in (ali"ornia. (OL I...)
'. .e"inition!
E1cept "or separate property$ all real an# personal property acquire# %y marrie# person #uring the marriage while
#omicile# in (ali"ornia or another community property state
a. It is a%out when the la%or is per"orme#$ not when the money is receive#.
EXAMPLE:
7us%an# an# /i"e marry on 8anuary '4$ ,449. On 8anuary ,4$ ,449$ 7us%an# is pai# his salary "or .ecem%er o"
,44:. On ;ovem%er ,9$ ,449$ 7us%an# an# /i"e separate$ an# on 8anuary ,4$ ,44<$ 7us%an# is pai# a %onus
"or his ,449 wor-. In evaluating the character o" the %onus payments$ the time o" the wor- "or which the
compensation is pai# must %e e1amine#. (ompensation "or wor- per"orme# #uring the marriage is presumptively
community property an# compensation "or wor- #one a"ter the #ate o" separation is presumptively separate
property.
,. (ommunity property generally must %e suscepti%le o" ownership in common an# o" survival.
a. 2ight to practice a pro"ession is not #e"ine# as community property %ut the value o" a pro"essional practice or
partnership interest is community property #ivisi%le at #issolution o" marriage
=. Any artistic wor- create# %y a spouse #uring the marriage an# any copyright o%taine# on such wor- is community
property.
C. Quasi-Community Property (QCP) (OL I.E.)
'. .e"inition!
roperty acquire# in a non6community property state that woul# have %een community property i" acquire# in
(ali"ornia or property e1change# "or such property
EXAMLE!
7us%an# an# /i"e were legally marrie# in )lori#a in '<<4 a"ter they gra#uate# "rom college. They each went to wor-
an# save# enough money to %uy a small house. /hen they %ought the house they put the title in 5oint tenancy. A"ter
ten years o" marriage$ /i"e #eci#e# to leave the marriage an# move# to (ali"ornia. A"ter she ha# %een in (ali"ornia
"or one year$ she "ile# "or #issolution. )amily (o#e > ',? applies %ecause the house was acquire# while the parties
were living in a non6community property state$ %ut woul# have %een classi"ie# as community property i" the property
ha# %een locate# in (ali"ornia (as it is real property acquire# #uring the marriage with community property "un#s).
D. An asset may %e partly community property an# partly separate property. (OL I.E.)
EXAMLE!
A couple %uys a house #uring marriage with @4A /Bs separate property an# C4A community property. Title is hel# C4A
in the coupleBs name as community property$ an# @4A in /Bs name as her sole an# separate property.
E. There is a presumption in "avor o" community property upon #ivorce when property is title# in any 5oint "orm.
III. PREREQUISITES TO APPLICATION OF COMMUNITY PROPERTY PRINCIPLES
A. Marriaes (OL II.A.)
'. )ull application o" the community property regime requires that the parties %e legally marrie#$ %ut most o" the
principles o" the community property system are applica%le to putative spouses an# spouses %y estoppel.
(ouple must "it within the (A marital system %e"ore community property principles will apply. These are
threshol# requirements.
,. A vali# marriage requires capacity an# compliance with certain "ormalities.
a. Marriage is a *personal relation arising out o" a civil contract %etween a man an# a woman$+ each age '9 or ol#er
an# capa%le o" consenting to the contract.
(') A male or "emale un#er the age o" '9 may enter into a marriage with the written consent o" his or her
parent(s) an# a court or#er$ or a court or#er alone i" the minor has no parent capa%le o" consenting.
%. Marriage in (ali"ornia requires the issuance o" a license an# solemniDation %y an authoriDe# o""icial !
generally an authoriDe# person o" any religious #enomination$ 5u#ge$ magistrate$ or legislator.
c. ;on6compliance %y a non6party to the marriage with any o" the statutory requirements with respect to licensing$
solemniDation$ or authentication an# registration o" the marriage certi"icate #oes not invali#ate a marriage.
B. "oi# an# "oi#a$%e Marriaes (OL II.&.)
'. "oi# Marriaes:
Incestuous or %igamous marriages are voi#. &ut where "ormer spouse has %een a%sent "or "ive years$ an# is now
-nown to %e living$ secon# marriage must %e "ormally annulle# when the "ormer spouse reappears
,. "oi#a$%e Marriaes:
Those where one party was incapa%le o" consenting #ue to minority or unsoun# min#$ or consent was o%taine# %y
"rau# or "orce$ unless the party who was capa%le o" or #i# not "reely consent a"terwar#s "reely coha%ite# with the
other as hus%an# or wi"e
EXAMLE!
/hile courting$ 8im promise# (arol that they woul# have at least two chil#renE this was one o" the motivating "actors
"or the marriage "or (arol as she love# chil#ren. One wee- a"ter the we##ing$ he announce# that he ha# #eci#e# that
he #i# not want chil#ren any more. I" (arol "iles "or a nullity o" her marriage it will %e grante#$ as 8imBs change o" heart
went to the essence o" the marital relationship.
=. Common %a& marriaes are not recogniDe# in (ali"ornia
a. 7owever!
Other states #o so i" an out o" state couple who is common law marrie# in another state an# comes to (ali"ornia
shoul# %e consi#ere# common law marrie#
C. A%ternati'es to Marriae (OL II.(.)
'. Putati'e Spouses
a. /hen a marriage is voi# or voi#a%le %ut the court "in#s that either party or %oth parties %elieve# in goo# "aith that
the marriage was vali#$ the court will #eclare the relationship that o" putative spouse.
EXAMLE!
X %elieves that her "inal #ivorce papers were "ile# %ut a clerical error prevente# that "rom happening. X is then still
marrie# when she marries her secon# hus%an#. 3he is then a putative spouse %ecause she in goo# "aith %elieve#
that she was #ivorce# %e"ore she remarrie#.
%. Quasi-marita% property (QMP)
(') The court woul# #ivi#e any property at issue that woul# have %een community or quasi6community property
i" the union ha# not %een voi# or voi#a%le. This property is lia%le "or #e%s o" the parties to the same e1tent
as community property or quasi community property
,. Marriae $y Estoppe%
a. Marriage %y estoppel occurs when one party -new that the marriage was invali#$ %ut in#uce# the other party into
EXAM
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the marriage$ an# the party that in#uce# is later estoppe# "rom claiming that community property #oes not attach
#ue to invali#ity o" marriage
()P*+(E+,CAL
/ was a mem%er o" the very tra#itional eastern religious sect. 7 was a non6practicing mem%er o" a church. The two #ate#
"or a short time$ %ut / sai# she coul# not #ate 7 without %eing marrie# to him an# as such per"orme# a private
*(ommunity+ marriage. They #i# not coha%it$ #i# not share the same name$ #i# not commingle "un#s$ #i# not support one
another$ an# #i# not ta-e any property together. A"ter 7 in"orme# / he was getting marrie#$ / %rought an action "or
#issolution o" marriage an# sought support an# a property #ivision. Is this a vali# marriageF
There is no solemniDation$ no ceremony$ no putative spouse$ no marriage %y estoppel$ an# there"ore the marriage
#oesnBt "it into (ali"ornia marriage system.
=. Mar'in A-tions
a. /here man an# woman live together -nowing they are not marrie#$ property will presume# to %e separate
property o" the parties involve#.
%. Marvin v. Marvin G'9 (al.=# CC4 ('<:C)H hel# that!
parties can contract with each other to create a support o%ligation or other ownership relationship
c. /hile (ali"ornia$ li-e common law states$ #oes not en"orce contracts %ase# on se1ual acts as consi#eration$ the
mere "act that se1 is involve# #oes not in itsel" invali#ate the agreement.
@. Domesti- Partners.ip
a. Only marriages %etween persons o" the opposite se1 are recogniDe# as vali# in (ali"ornia$ e1cept that marriages
entere# into %etween same se1 partners %etween May '=$ ,449 (the #ate o" the ruling in the Marriage (ases)
an# ;ovem%er ?$ ,449 (the #ate roposition 9 was passe#) are vali# in (ali"ornia. 7owever$ (ali"ornia has a
statutory proce#ure "or same6se1 partners to register as *#omestic partners.+
(') Any property to which such #omestic partners hol# title together is to %e #ivi#e# accor#ing to their relative
property interests at the time o" acquisition.
(,) .omestic partners share most o" the same legal %ene"its as marrie# partners. The e1ceptions to this are
"e#eral %ene"its or a "e#eral ta1 status. )or e1ample while #omestic partners are treate# as marrie# "or
(ali"ornia ta1 purposes$ they are not "or "e#eral ta1 purposes %ecause o" the "e#eral .e"ense o" Marriage
Act or *.OMA+.
()P*+(E+,CAL
3ally an# 3teve live# together in a romantic relationshipE all o" their "rien#s -new that they were not marrie#. One night$ at
#inner 3teve as-e# 3ally to quit her 5o% an# stay at home to care "or him an# support his career. In return$ 3teve promise# to
support her *"or the rest o" her li"e.+ 3ally quit her 5o%$ which ha# seeme# as though it woul# %e a lucrative career path "or her.
3he travele# e1tensively with 3teve$ entertaine# lavishly "or 3teve an# #i# everything she coul# to support 3teve in his 5o%.
Over the ne1t ten years 3teveBs career s-yroc-ete# an# he %ecame the (EO o" a large corporation. One #ay 3teve came
home an# announce# that the relationship with 3ally was 5ust not *wor-ing any more+ an# tol# 3ally to move out o" his house.
3ally imme#iately "iles a %reach o" contract action in the civil court "or property an# support. /hat #oes 3ally nee# to show to
prevail on her claims against 3teveF
There is a Marvin Action here$ as 3teve promise# to support her "or the rest o" her li"e i" she quit her 5o% an# staye# at home
to ta-e care o" him 3ally accepte# the o""er$ an# quit her 5o%$ ma-ing this a %in#ing contract action similar to the one in
Marvin v. Marvin. This creates a support an# property o%ligation "or 3teve$ an# he %reache# the contract with 3ally.
IV. MANAGEMENT OF THE COMMUNITY
A. &oth spouses have equal management rights in community property. (OL III.A.)
'. rior to '<:?!
The hus%an# ha# sole management an# control.
,. ;ow!
8oint an# equal rights. /ith rights come 5oint an# equal "i#uciary rights %etween marrie# couples
B. /i#u-iary Duties Bet&een Spouses (OL III.(.)
'. A con"i#ential relationship e1ists %etween spouses in (ali"ornia as a matter o" lawE this con"i#ential relationship arises
out o" the marital state itsel". The nature o" the marriage contract involves mutual o%ligations o" respect$ "i#elity an#
support.
a. Each spouse must act in goo# "aith with respect to the other spouse in transactions %etween themselves an# in
the management an# control o" the community property$ in accor#ance with the general rules that govern the
actions o" persons in "i#uciary or con"i#ential relationships.
%. This #uty imposes a requirement o" *the highest goo# "aith an# "air #ealing+ on each spouse. ;either may ta-e
un"air a#vantage o" the other.
c. The relationship is su%5ect to the same rights an# #uties as those o" %usiness partners un#er the (orporations
(o#e$ inclu#ing a right to inspect any %oo-s or recor#s -ept with respect to the community property an#
accounting to the spouse "or any %ene"it or pro"it #erive# "rom any transaction %y one spouse without the consent
o" the other. It inclu#es the o%ligation to ma-e "ull #isclosure to the other spouse o" the e1istence o" assets in
which the community has an interest$ an# o" #e%ts "or which the community may %e lia%le$ upon request.
,. A re%utta%le presumption o" un#ue in"luence arises when!
one spouse o%tains an a#vantage over another in community property transaction
a. Applies when issues o" transmutation (changing character o" property) arise.
=. 0eme#ies 1or Brea-. o1 Duty
a. A spouse has a claim against the other spouse "or %reach o" "i#uciary #uty that results in impairment to the
claimant spouseBs present$ un#ivi#e# interest in the community estate.
(') 3uch claims may %e %rought without "iling an action "or #issolution o" marriage$ legal separation or
annulment$ %ut must %e commence# within three years o" the #ate the petitioning spouse ha# actual
-nowle#ge that the transaction or event occurre#$ i" not commence# in con5unction with such a procee#ing
or upon the #eath o" the spouse.
(,) 2eme#ies "or %reach o" "i#uciary #uty inclu#e$ %ut are not limite# to$ an awar# o" ?4A o" any asset (or a
correspon#ing amount o" money or other assets) that was un#isclose# or trans"erre# in %reach o" the
"i#uciary #uty$ plus attorneyBs "ees an# court costs.
(=) I" "rau# is proven %y clear an# convincing evi#ence$ the reme#y may %e '44A o" the value o" the asset.
%. A court may or#er an accounting an# #etermine the relative rights an# #uties o" the parties. A court may also
or#er that the name o" a spouse %e a##e# to community property hel# in the name o" the other spouse alone$ or
that the title to community property hel# in some other "orm %e re"orme# to re"lect its community character$
e1cept with respect to a general partnership interest$ an interest in a pro"essional corporation$ or an asset o" an
unincorporate# %usiness i" the other spouse is the only spouse involve# in operating an# managing the %usiness.
The court also may not re"orm the title i" the revision woul# a#versely a""ect the rights o" a thir# person.
C. Community Persona% Property (OL III...)
'. Ieneral rule!
Either spouse has the power to manage an# control the community personal property an# has the same a%solute
power o" #isposition as over his or her own separate personal property.
a. Ma-ing a gi"t o" or #isposing o" community property.
(') A spouse may not gi"t community property without valua%le consi#eration$ written consent o" the other
spouse. This counts as a %reach o" "i#uciary #uty.
%. 3elling$ conveying$ or encum%ering the community property.
(') A spouse may not sell$ convey or encum%er the property without written consent o" the other spouse
c. I" a spouse ma-es a gi"t an# the other #i# not consent!
3pouse can rati"y the gi"t or revo-e it an# sue an# recover the property
(') A"ter #eath!
nonconsenting spouse can act to voi# the gi"t$ up to ?4 percent
V. CHANGES IN THE CHARACTERIZATION OF PROPERTY
A. 3pouses can opt out o" %eing governe# %y (ali"ornia community property in two ways!
'. re6martial agreement
,. Transmutation o" assets
B. Premarita% Areements (PMA) (OL IJ.A.)
'. Also -nown as antenuptial agreements or prenuptial agreements.
,. remarital agreements ma#e on or a"ter 8anuary '$ '<9C$ must %e in writing an# signe# %y %oth parties.
a. The agreement may #eal with any topic as long as it is not!
Against pu%lic policy or pu%lic policy regar#ing the o%ligations o" chil# support
(') (annot!
2ight to receive chil# support
(,) (an!
/aive spousal support
%. The writing requirement is su%5ect to e1ceptions to the statute o" "rau#s such as promissory estoppel.
=. De1enses to t.e En1or-ement o1 a Premarita% Areement
a. Two %asic #e"enses to en"orcement!
(') It has to %e voluntary$ meaning that there is no "rau#$ coercion or lac- o" -nowle#ge on the part o" the signer
at the time o" the e1ecution o" the agreement
(,) Knconsciona%le! I" spouse #i# not provi#e "ull #isclosure o" the e1tent o" their "inances or #e%t
%. )or premarital agreements #ra"te# %etween 8anuary '$ '<9C an# 8anuary '$ ,44,$ the court will loo- at si1 "actors
to #etermine i" the premarital agreement was entere# into voluntarily (&on#s "actors)!
(') time %etween e1ecution an# we##ing
(,) une1pecte# or surprise that the agreement was presente#
(=) a%sence o" counsel
(@) inequality o" %argaining power %etween parties
(?) #isclosure
(C) whether parties un#erstoo# the nature an# e""ect o" the agreement
c. )or premarital agreements #ra"te# a"ter 8anuary '$ ,44,$ #e"enses to the en"orcement o" a premarital agreement
are liste# in )am. (o#e > 'C'?.
(') *Joluntary+ means!
no "rau#$ coercion or lac- o" -nowle#ge on the part o" the signer at the time o" the e1ecution o" the
agreement
(,) Kn#er )am. (o#e > 'C'?$ it shall %e #eeme# that the MA was not e1ecute# voluntarily unless the court
e1pressly "in#s that the party against whom en"orcement is sought!
(a) ha# in#epen#ent counsel or waive# counsel in writing
(%) ha# at least seven #ays to review the agreementE an#
(c) was "ully a#vise# in writing o" all the rights an# o%ligations that attach to e1ecuting the premarital
agreement
C. +ransmutation (OL IJ.&.)
'. .e"inition!
/hen a couple agrees to change character o" the asset
,. rior to '<9?!
It coul# %e writing or oral
a. A"ter 8anuary '$'<9?!
Must %e in writing
%. .ate is measure# "rom the #ate the attempte# transmutation occurs.
c. E1ception to writing requirement "or gi"ts %etween spouses!
(') Ii"t must %e o" tangi%le property an# "or personal use o" spouse
(,) Ii"t must not %e o" su%stantial value as measure against li"estyle o" the parties
EXAMLE!
&us #river wi"e gives hus%an# L,4M #iamon# cu""lin-s "rom (artier. Tangi%le property "or personal use o"
recipient spouse. This is su%stantial in value "or their li"estyle. /i"e might prevail in arguing that the cu""lin-s are
community property unless the hus%an# can pro#uce proo" that she inten#e# the gi"t %e his separate property.
=. A transmutation #oes not require any consi#eration.
EXAMLE!
In '<9@$ a <'6year6ol# with consi#era%le property marrie# her much younger employee. .uring the ? month marriage
she #eclare# orally that her property was community an# that it woul# %elong to the hus%an# a"ter her #eath. 3he #i#
not trans"er the title to his name$ a## him to %an- accounts$ or ta-e any other o""icial actions to grant him property
rights. The hus%an# ha# no assets an# earne# nothing #uring the marriage. Kpon #issolution$ %ase# on the oral
representation alone$ a transmutation was "oun# to have ta-en place. I" these same "acts occurre# in '<9C$ unless
the transmutation occurre# in writing$ it will not %e en"orce#. The statutory change was #esigne# to prevent *pillow
tal-+.
@. Contra-tua% Areements an# /i#u-iary Duties
a. Even with a transmutation$ you must have a situation where there is not an un"air a#vantage.
(') A#vantage# spouse must #emonstrate that the agreement was not o%taine# through un#ue in"luence as
there is a re%utta%le presumption that the agreement was a %reach o" "i#uciary relationship
D. Commin%in (OL IJ.(.)
'. (ommingling involves!
Mi1ing o" "ungi%le property o" #i""erent characters$ which means com%ining separate property with community
property
EXAMLE!
utting earnings #uring marriage (community property) into same %an- account that contains a gi"t "rom #a#. Account
has separate an# community property$ money is in#istinguisha%le when mi1e# together.
,. resumptions
a. resumption o" community property
(') The party see-ing to esta%lish any part o" the commingle# asset as separate property %ears the %ur#en o"
proo" as to what portion is separate %y tracing.
=. +ra-in
a. .irect tracing!
(') 3eparate property proponent attempts to i#enti"y separate "un#s %y showing when the money was place#
into account an# when it was with#rawn "or purchase o" another property
EXAMLE!
X puts L?4M "rom .a# into 5oint %an- account on .ecem%er '. On .ecem%er ,$ X purchases a car that costs
L?4M$ title# in own name. This will very li-ely meet %ur#en o" proo" o" showing #irect tracing.
%. )amily E1pense .octrineNE1haustion Metho#
(') .uring the same time perio#$ the community #eposits e1cee#e# the community income . The presumption is
that the a##itional money to pay "or things comes "rom separate property.
EXAMLE!
X puts gi"ts "rom .a# (separate property) into 5oint %an- account$ into which X also #eposits paychec-s
(community property). aychec-s are L'444Nmonth. (ommunity e1penses are L',44Nmonth. Logically$
anything e1tra comes "rom separate property.
(a) Tracing must correlate to the spen#ing an# cannot %e #one over a prolonge# perio# o" time
c. The mere "act o" commingling separate an# community "un#s in a %an- account #oes not #estroy the separate
character o" the "un#s i" the amount o" separate "un#s can %e ascertaine#.
#. I" separate "un#s use# to acquire an asset cannot %e trace#$ the entire asset will %e treate# as community
property unless the community portion is inconsi#era%le in comparison to the amount o" separate "un#s
contri%ute#.
EXAMLE!
7 an# / have one 5oint chec-ing account into which they #eposit their salaries an# /Bs recent inheritance. This
is a commingle# account. I" 7 an# / purchase a car "rom this account$ / will %ear the %ur#en o" tracing the
amount o" the #own payment %ac- to her separate property in or#er to receive a reim%ursement. I" she cannot
ma-e that tracing$ then the car will %e #etermine# to %e wholly community property.
()P*+(E+,CAL
7 an# / have %een marrie# "or "our years an# are now getting a #ivorce. )or convenience they maintain one chec-ing
account an# #eposit their salaries into the account. 7 owns some stoc- which is his separate property$ an# when he sells the
stoc-$ he #eposits the procee#s into the account. / owne# a car an# some collecta%les which are her separate propertyE she
sells these an# #eposits the procee#s into the chec-ing account. The couple pays all o" their %ills "rom this account. 8ust a"ter
he sol# the stoc-$ 7 purchase# a coin collection with money "rom the chec-ing account. 7e now claims that it is his separate
property. / claims that the coins are community property. /ho has the %ur#en o" proo" on this issueF /hat must 7 prove to
prevail on his claimF .oes / have any %ur#en %e"ore the courtF
(ommunity property is presume# in (ali"ornia 7 has the %ur#en to show that the coins are not community property$ an#
instea# it is his separate property through transmutation. 7e can #o this through two metho#s! tracing an# "amily e1haustion
#octrine. Through tracing$ 7 has to show that he purchase# the coin collection with the procee#s o" the stoc- he sol#$
lea#ing to proper transmutation o" property. There isnBt enough in the hypo to support e1haustion. I" 7 cannot show tracing$
community property is presume$ an# the coins will %e community property
VI. CHARACTERIZATION OF PROPERTY
A. +ime o1 A-2uisition (OL J.A.)
'. (haracter o" property is "i1e# as o" the time the property was acquire#.
a. /here an asset is acquire# over time an# title #oes not vest in the %uyer(s) until the purchase price or a speci"ie#
portion o" it is pai#$ then each payment is consi#ere# to *%uy into+ title in the proportion it %ears to the whole price
pai#.
EXAMLE!
7 an# / %uy a %oat "or L'444 over time$ %ut the %an- maintains title in its name until the %oat is pai# o"" in "ull.
Each month a principal payment o" L'44 is ma#e. A"ter the "irst month$ the community will have a '4A interest in
the %oatE a"ter the secon# payment$ the community will have a ,4A interest in the %oat$ etc.
B. Manner o1 A-2uisition (OL J.&.)
'. 2egar#less o" the time o" acquisition$ the character o" property is primarily #etermine# %y!
The source o" "un#s or other assets use# to acquire it
a. I" the property is o%taine# in e1change "or separate property!
The asset acquire# is separate property even i" the acquisition happene# #uring marriage
%. I" the source cannot %e #etermine#!
Then acquisition #uring the marriage will trigger a presumption that it is community property$ which can %e
Overcome i" the separatiDer can per"orm an a#equate tracing
c. I" the relative proportions o" separate an# community contri%utions can %e #etermine#!
The spouse who contri%ute# his separate property to the acquisition may %e entitle# to a reim%ursement
()P*+(E+,CAL
Two #ays a"ter marrying Tom$ 3an#y tra#e# in her car on a new "amily car. 3an#yBs car was worth L?44 an# the new car was
purchase# "or L,?$444. Tom an# 3an#y put #own an a##itional L?$444 that they receive# "rom his parents as a we##ing
present$ the #ay a"ter their we##ing. .oes 3an#y have a separate property interest in the car an# what is the communityBs
interest in the carF
The character o" property is primarily #etermine# %y source o" "un#s or other asserts use# to acquire it. 7ere$ the sources are
#i""erent. 3an#y place# L?44 into the new "amily car "rom her separate property. L?444 they receive# was community
property. The car is community property$ an# 3an#y can get reim%urse# L?44 "or contri%uting "rom her separate property.
,. )e#eral reemption
a. rimarily comes up when #iscussing retirement %ene"its.
%. There may %e an asset that "e#eral law has alrea#y characteriDe#.
(') Then (ali"ornia cannot re6characteriDe the property
EXAMLE!
K3 3avings &on# is #eeme# owne# %y the registere# owner regar#less o" what "un#s were use# to
purchase it.
C. +it%e (OL J...)
'. Threshol# issue!
Title #oes not necessarily control ownership.
EXAMLE!
8oint chec-%oo- hol#ing marital earnings is clearly community property. / purchases &M/ with the "un#s in the
account$ titles it in her name. It is still community property.
,. Title presumptions will control unless an agreement hol#s otherwise.
a. 2eal property that is 5ointly title#$ it will %e presume# to %e community property unless otherwise proven
%. ;early all presumptions are re%utta%le.
c. ;early all presumptions "avor the community.
(') EX(ETIO;!
Marrie# womenBs presumption
=. Presumption in /a'or o1 Community Property
a. Ieneral presumption that property acquire# #uring marriage %elongs to the community
%. resumption also arises that i" spouse possesse# asset #uring or at en# o" long marriage$ that the asset is
community property unless proven otherwise
EXAMLE!
On the #ate the parties separate# a"ter a ,46year marriage$ there was L'4$444 cash in a shoe %o1 un#er the %e#.
Knless one party or the other can clearly trace the cash to show that it is separate property$ the presumption will
%e that given the length o" the marriage an# the "ungi%le nature o" cash that it is community property.
c. )or property acquire# %e"ore 8anuary '$ '<:?!
resumption in "avor o" community property "or any instrument that #escri%e# trans"erees as hus%an# an# wi"e
i.e. *Mr an# Mrs 3mith+
(') Marrie# /omanBs resumption!
To protect women who ha# property in their name alone$ it was #eeme# womanBs separate
property as it woul# %e presume# to %e gi"t "rom the hus%an#
EXAMLE!
I" the property is in the name o" &o% an# 8osie Miller$ &o%Bs hal" woul# %e presume# to %e community
property an# 8osieBs hal" separate property unless it says ta-en %y Mr. O Mrs. &o% Miller$ 7us%an# O /i"e
etc.
(a) (an %e re%utte# %y!
(ontrary evi#ence. i" the hus%an# says he place# it in wi"eBs name "or a special purpose other than a
gi"t. &ut this was conclusive as to thir#6party %ona6"i#e purchasers
@. Presumption in /a'or o1 Lea% +it%e
a. There is a presumption that ownership interests in property are as state# in the legal title.
(') )or the limite# purposes o" #ivision o" property on #issolution o" marriage or legal separation o" the parties!
any property acquire# %y parties in 5oint "orm$ inclu#ing 5oint tenancy$ tenancy in common$ is
presume# to %e community property
(,) This presumption a""ects the %ur#en o" proo" an# may %e re%utte# %y either!
(a) a clear statement in the #ee# #elineating that property acquire# is separate property
(%) written agreement that property is real property
(c) Tracing to separate property will not su""ice
(=) Kpon #ivorce!
property hel# in any 5oint "orm will %e presume# to %e community property
(@) On #eath!
property hel# in any 5oint tenancy will %e presume# to %e 5oint tenancy an# passes %y right o"
survivorship
%. )or the protection o" thir# parties relying on real property recor#s$ there is a presumption that!
the real property is in name as registere#
EXAMLE!
/ hol#s title to a community property "amily resi#ence as */ as her sole an# separate property.+ 3houl# she sell
the property to a thir# party bona fide purchaser "or value$ the sale is vali# as to the thir# party. Any #ispute
%etween the 7 an# / will %e resolve# %etween them in the "amily court.
D. Cre#it A-2uisitions (OL J. ).)
'. Assets acquire# on cre#it #uring the marriage will %e consi#ere# community property unless the cre#itor relie# solely
on separate property when e1ten#ing cre#it
,. *Intent o" the Len#er+ Test
a. 3ee what the len#er is loo-ing to "or the repayment o" the loan.
(') i" len#ing #ecision was %ase# on separate source$ such as premarital property inten#e# as security or the
separate cre#it rating o" one spouse$ the intention o" the len#er controls
(,) i" earning capacity o" one or %oth spouses was relie# on$ the asset acquire# woul# %e community property
EXAMLE!
7 owns several pieces o" real property as his separate property. .uring marriage$ 7 acquires another real
property "or L'44$444E putting L=4$444 o" his separate property #own an# "inancing the rest. I" the %an-
loo-s only to his separate property in e1ten#ing the loan$ then the property will %e 7Bs separate property. I"$
however$ the %an- loo-s to any community property asset$ such as either partyBs goo# cre#it$ or the partiesB
marital income$ the property will %e community$ with a separate property reim%ursement.
Mathematical calculation a%ility is not what is %eing teste# on the %ar. I" you see num%ers$ recite the rule$ -now the
"ormula an# e1plain it ver%ally$ write it #own an# plug in num%ers as %est you can. .onBt worry i" your math is
wrong.
=. MooreNMars#en (alculations
a. A loan that was separate in its inception$ as where the #own payment was separate property$ may %ecome
partially community$ requiring apportionment o" the value o" the asset$ when community property payments
re#uce the principal %alance o" the loan.
%. The "ormula may %e a#5uste# i" it can %e shown that a ma5ority o" the appreciation in value o" the asset$ such as a
home$ occurre# %e"ore or a"ter community property was use# to re#uce the loan %alance.
EXAMLE!
7us%an# (7) %uys a house in '<<4 %e"ore he gets marrie# to /i"e (/). 7 pai# L=44$444$ with a loan o" L,44$444
an# a #own payment o" L'44$444. 7 an# / were marrie# in '<<C. .uring this time 7 ma#e payments on the
house. 7e was a%le to pay o"" L?$444 in principal an# he pai# L=?$444 in interest. In '<<C$ when 7 an# / were
marrie#$ the house was worth L?44$444.
7 an# / separate# in ,44C. At the #ate o" separation the house was worth L<44$444. .uring the marriage 7 an#
/ ma#e total payments o" L:4$444. The payments accounte# "or L=4$444 in principal an# L@4$444 in interest.
The #ivision o" the property as o" the #ate o" separation is #etermine# as %elow.
+.e .ouse is (3s separate property. 4ot.in .as o--urre# t.at -.anes t.e -.ara-ter o1 t.e property.
A##itiona%%y! t.e #o&n payment! premarita% appre-iation! an# t.e premarita% payment o1 prin-ipa% remain
.is separate property.
The community is entitle# to a pro tanto interest in the house "or the perio# that 7 an# & were marrie#.
C*MM54,+) ,4+E0ES+:
(ommunity property interest (e1presse# as A) P
(ommunity payment o" principal on loan
urchase price o" the property
The community interest is then multiplie# %y the increase in value o" the property #uring marriage to #etermine
the communityBs share o" the increase in value #uring marriage.
Applie# to the "acts o" this case!
L=4$444

P '4A
L=44$444
EXAM
TI
The marital appreciation was L@44$444.
L@44$444 Q '4A P L@4$444.
There"ore the community interest in the property is L@4$444 R =4$444 (pursuant to ).(. > ,C@4). The community
has an interest o" L:4$444 in the property.
SEPA0A+E ,4+E0ES+:
3eparate property interest (e1presse# as A) P
(.own ayment R Loan) S rincipal ayments Ma#e .uring Marriage
urchase price o" the property
In this case!
(L'44$444 R L,44$444) S L=4$444

P <4A
L=44$444
As the marital appreciation was L@44$444 separate property interest is! .< Q @44$444 P =C4$444.
3KMMA2T O) I;TE2E3T3 I; 7OK3E
7K3&A;. /I)E (OMMK;ITT
2EMA2ITAL K2(7A3E O) 7OK3E
urchase price L=44$444
.own payment L'44$444
Loan L,44$444
2EMA2ITAL ATME;T3
rincipal L?$444
Interest L=?$444
JALKE O) 7OK3E AT MA22IAIE
L?44$444
ATME;T3 .K2I;I MA22IAIE
rincipal L=4$444
Interest L@4$444
JALKE AT 3EA2ATIO;
L<44$444
MA2ITAL A2E(IATIO;
L@44$444
.IJI3IO; KO; .I33OLKTIO;
(OMMK;ITT I;TE2E3T
'4A
(OMMK;ITT I;TE2E3T I; MA2ITAL
A2E(IATIO;
L@4$444
(to %e #ivi#e# %y
community)
).(. > ,C@4 2EIM&K23EME;T
L'?$444
7Bs 3N I;TE2E3T MA2ITAL
A2E(IATIO;
<4A
7Bs 3N I;TE2E3T MA2ITAL
A2E(IATIO;
L=C4$444
7Bs TOTAL I;TE2E3T I; 7OK3E AT
.I33OLKTIO;
L9C?$444
BAR EXAM APPLICATION
Uuestion '
Applicants were as-e# to #etermine the rights o" the spouses in items owne# %y the couple.
7an- an# /an#a met in Illinois an# %egan #ating regularly$ then move# in together. 7an-$ an attorney$ tol# /an#a that
un#er Illinois law the two ha# a common6law marriage$ which /an#a %elieve#. /an#a maintaine# a separate savings
account in which she #eposite# all her earnings. 7an- an# /an#a move# to (ali"ornia in ,444$ an# /an#a purchase# a
parcel o" lan# using the L@4$444 in her separate savings account$ "or which she too- title in her name alone. 3oon a"ter$
/an#a inherite# a sculpture$ "or which 7an- %ought a mar%le pe#estal an# which the couple re"erre# to as *our collectorBs
priDe.+
/hat are 7an-Bs an# /an#aBs respective rights in the parcel o" lan# an# the sculptureF
Applicants must consi#er the rights o" a putative spouse to property owne# %y the community or the other spouse$ an# the
requirements "or a transmutation.
Adapted from the July 2002 California Bar Exam
CHECK FOR VA!" #ARR!A$E% &ERHA&' !( )A' CO##O* A) #ARR!A$E !* !% A(ER*A(!VE+, (HERE !' A
&-(A(!VE #ARR!A$E '+'(E#, )H!CH OCC-R' )HE* A #ARR!A$E !' VO!" OR VO!"ABE B-( (HE CO-R(
F!*"' (HA( E!(HER &AR(+ OR BO(H &AR(!E' BE!EVE" !* $OO" FA!(H (HA( (HE #ARR!A$E )A' VA!", (HE
CO-R( )! "ECARE (HE REA(!O*'H!& (HA( OF &-(A(!VE '&O-'E% HERE, )A*"A BE!EVE' (HE+ ARE
#ARR!E" 'O (HE+ )O-" BE (REA(E" A' &-(A(!VE '&O-'E FOR &-R&O'E' OF CA!FOR*!A A) )HE*
(HE+ #OVE (O CA!FOR*!A% 'O, )E HAVE A &ACE FOR HA*K A*" )A*"A !* (HE CO##-*!(+ &RO&ER(+
'+'(E# A' &-(A(!VE '&O-'E'%
)H!E (!(E CREA(E' A &RE'-#&(!O* OF O)*ER'H!&, !( !' *O( CO*(RO!*$% 'O-RCE OF F-*"' !' A
&R!#AR+ "E(ER#!*A(!VE FAC(OR !* A'CER(A!*!*$ CHARAC(ER OF &RO&ER(+% )A*"A HA' 'E&ARA(E BA*K
ACCO-*(, )H!CH !' '(! CO##-*!(+ &RO&ER(+ BECA-'E !( !' EAR*!*$' FRO# ABOR "-R!*$ #ARR!A$E%
!F !( !' EAR*!*$' FRO# !!*O!' "-R!*$ #ARR!A$E, !( !' .-A'!/CO##-*!(+ &RO&ER(+ A*" (HE EFFEC( !'
(HE 'A#E A' (HE+ *O) !VE !* CA!FOR*!A% '!*CE 'HE BO-$H( (HE &ARCE OF A*" FRO# #O*E+
AC.-!RE" "-R!*$ #ARR!A$E 0EVE* !F !( !' !* HER 'E&ARA(E 'AV!*$' ACCO-*(1, (HE A*" !' CO##-*!(+
&RO&ER(+ BECA-'E (HE (RA*'#-(A(!O* CO#E' FRO# F-*"' EAR*E" "-R!*$ (HE #ARR!A$E%
(HE* (HERE !' (HE .-E'(!O* OF (HE 'C-&(-RE% &R!OR (O 2345, #ARR!E" )O#A*6' &RE'-#&(!O* )O-"
HAVE A&&!E" A*" HA*K )O-" HAVE 'O#E CA!# (O !(% B-( !( !' O*$ '!*CE 2345 '!*CE 'HE !*HER!(E"
(HE 'C-&(-RE% !( !' HER 'E&ARA(E &RO&ER(+ EVE* !F HA*K AR$-E' (HA( (HE 'C-&(-RE BECA#E
CO##-*!(+ &RO&ER(+ 'OE+ BECA-'E !( !' CAE" 7O-R COEC(OR6' &R!8E9 OR BECA-'E HE BO-$H( A
&E"E'(A FOR !(% 'C-&(-RE !' HER 'E&ARA(E &RO&ER(+ A' 'HE !*HER!(E" !( &O'( 2345%
BAR EXAM APPLICATION
Uuestion ,
Applicants were as-e# to characteriDe various assets o" a couple as separate or community property.
7enry an# /an#a marrie# in '<94. In '<<,$ /an#aBs uncle #ie# an# le"t her an oil painting worth L?$444 an# a small ca%in
on a la-e. In '<<?$ /an#a o%taine# a #egree which 7enry ha# "un#e# an# opene# her own success"ul po#iatry practice.
7enry an# /an#a separate# in ,44,$ at which time the painting ha# appreciate# to a value o" L?4$444.
Kpon #issolution$ what are 7enryBs an# /an#aBs respective rights in the la-e ca%inF The paintingF /an#aBs pro"essional
e#ucation an# po#iatry practiceF
Applicants must #etermine what type o" property each item will %e classi"ie# as.
Adapted from the February 200: California Bar Exam
Valid marria;e and no indi<ation of =oid or =oidable marria;e >o <ommunity property applie>%
)anda inherited oil paintin; ?orth @5000 in 2332, a> ?ell a> a >mall <abin in the laAe% (hi> ?a> property a<Buired durin;
marria;e% (he paintin; i> >eparate property, a> ?ell a> the <abin, and both belon; to )anda% $ift> a<Buired throu;h
inheritan<e are >eparate property% )anda ?ould bear the burden of pro=in; thou;h, that >he inherited the <abin and oil
paintin;%
Ho?e=er, Henry may ar;ue that he ;et> intere>t in <redit a<Bui>ition here% &aintin; ?a> initially ?orth @5000 and appre<iated
to @50,000 before di>>olution, ?hi<h i> a ;ain of @C5,000% Ho?e=er, Henry did nothin; to enhan<e the =alue of the property,
>o he ;et> nothin; in term> of the oil paintin;%
Henry doe> not ha=e an intere>t in the de;ree, a> the de;ree belon;> to )anda% But he <an ;et reimbur>ed for in=e>tin; in
edu<ation if the <ommunity property ha> pro=ided for it% (here i> rebuttable pre>umption after 20 year> of pra<ti<e the
<ommunity ?ould ha=e re<ei=ed eBui=alent of in=e>tment% Here it i> Du>t E year> >o <ommunity ?ill be reimbur>ed in term> of
tuition, booA>%
(he podiatry pra<ti<e i> <ommunity property% !t ?a> >tarted durin; marria;e% And <ommunity property i> di=i>ible at
di>>olution of marria;e% He ?ould re<ei=e half of the pra<ti<e and ;ood?ill from the pra<ti<e%
VII. CHARACTERIZATION OF PARTICULAR TYPES OF ASSETS
A. +.e Marita% (ome (OL JI.A.)
'. The court may require the home to %e sol# an# the net procee#s #ivi#e#$ or may awar# the home in "ee simple to one
spouse with an o""setting awar# o" other community assets to the other spouse.
,. One spouse may %e permitte# to live in the house "or a perio# o" time until the youngest chil# reaches the age o"
ma5ority$ when the home will %e sol# an# the procee#s #ivi#e#.
()P*+(E+,CAL
7 an# / are the parents o" a special nee#s chil#. At the time o" the #issolution trial$ the partiesB chil# was ,, years ol#. The
chil# was gravely an# permanently incapacitate# an# una%le to care "or himsel". / live# in the "amily home an# provi#e# "ull
time care "or the partiesB a#ult chil#. / requests that the sale o" the community property "amily resi#ence %e #e"erre# until
the partiesB chil# can care "or himsel". (an the court #e"er the sale o" the "amily homeF
Typically$ one spouse can %e permitte# to live in house until youngest chil# reache# age o" ma5ority. 7ere$ whereas the
chil# is ,,$ he is permanently incapacitate#$ which provi#es a strong argument "or / to continue living in the home an#
provi#ing "ull6time care to the a#ult chil#. I" 7 is not su%stantially harme# %y #e"erring the sale o" home$ no reason why /
cannot get sale o" community property #e"erre#. Alternatively$ home can %e given in "ee simple to / to ta-e care o" chil#$
while equivalent assets to 7 to o""set the rewar# to /.
=. Although either spouse also has the power o" management an# control o" the community real property$ %oth spouses
must 5oin in e1ecuting an instrument to sell$ convey$ encum%er$ or lease "or more than a year$ any o" the community
realty.
a. (re#itorNBona Fide urchaser 2ights
(') resume# vali# when e1ecute# %y a spouse who hol#s title to the community estate
@. Spousa% Consent 0e2uirement
a. In any transaction a""ecting community property in which the consent o" %oth spouses is require#$ the court may$
upon the motion o" a spouse$ #ispense with the requirement o" the other spouseBs consent i" %oth o" the "ollowing
requirements are met!
(') the propose# transaction is in the %est interest o" the communityE an#
(,) consent has %een ar%itrarily re"use# or cannot %e o%taine# #ue to the physical incapacity$ mental incapacity$
or prolonge# a%sence o" the nonconsenting spouse.
EXAMLE!
7us%an# #etermines that the value o" the house that he an# /i"e own as community property is "alling
"aster than the rest o" the mar-et. &ecause the parties recently re"inance# the property an# too- money out$
the house is in #anger o" losing all o" the remaining equity. The hus%an# is resi#ing in the property$ there are
no chil#ren$ an# the property is the sole asset o" the marriage. /i"e is re"using to sell %ecause she simply
says *no+ to all o" hus%an#Bs proposals$ with no reasona%le e1planation. I" the hus%an# sells the property
an# appropriately accounts "or the money$ he will not %reach his "i#uciary #uty %ecause he is protecting the
community asset.
?. A restraining or#er may %e issue# within the plea#ings themselves in or#er to prevent the #issipation o" marital assets
%e"ore they are #istri%ute#.
B. Businesses (OL JI.&.)
'. /ami%y Business
a. spouse who manages a %usiness that is all or su%stantially all community personal property has the primary
management an# control o" the %usiness
%. The managing spouse must give prior written notice to the other spouse o" any sale$ lease$ e1change$ encum%rance
o" all or su%stantially all o" the personal property use# in the operation o" the %usiness whether or not title to that
property is hel# in the name o" only one spouse.
(') )ailure to give such proper written notice #oes not a#versely a""ect the vali#ity o" the transaction$ an#
reme#ies are only against the spouse "or %reach o" "i#uciary #uty.
,. Business *&ne# $y *ne Spouse
a. A %usiness owne# as separate property %y one o" the spouses can occur in one o" two ways!
(') 3eparate property %e"ore marriage
(,) 3tarte# #uring marriage with separate property "un#s
%. Jalue o" either spouseBs time$ e""ort an# la%or #uring marriage is a community asset.
(') I" community spen#s time$ e""ort$ la%or wor-ing on %usiness an# enhances value o" it$ then community
shoul# gets interest in the %usiness.
c. The court #oes not have to use either ereira or Jan (amp$ %ut can choose which it wants to apply.
(') ereira (2easona%le 2ate o" 2eturn)!
(a) Initial investment multiplie# %y reasona%le rate o" return an# the %un#le is #e"ine# is separate property.
2emain#er is community property.
(%) 3ay *assuming a reasona%le rate o" return$ here worth '4A+
(,) Jan (amp!
(a) (ompensate the community through a salary "or la%ors o" the owner an# spouse. 2emain#er o" pro"its
goes to separate property owne# %y spouse.
(%) Ma-e the reasona%le salary a whole num%er (L?4M or L'44M)
(=) ereira is typically use# when!
The spouseBs la%or or special s-ill is #eeme# the primary cause o" increase in the value o" the
%usiness
(@) Jan (amp is typically use# when!
More li-ely that the capital investment$ %eing at the right place at the right time$ or something that
is not attri%uta%le to the la%or o" the spouse
EXAMLE!
&e"ore marriage$ / starte# a success"ul %usiness which she continue# to manage #uring the marriage. On
the #ate o" marriage$ the parties agree that it was worth L'4$444E on the #ate o" separation$ the parties
agree that it ha# grown to L?4$444. I" the growth was largely #ue to mar-et "orces (a computer company in a
*hot technology mar-et+) the court is li-ely to loo- at Jan (amp. I" the growth was largely #ue to the e""orts
o" the owner spouse (a cigar store that the owner aggressively mar-ete# an# wor-e# at) then the court will
li-ely loo- to ereira.
EXAMLE!
At the time o" marriage / owne# stoc- value# at L'44$444. A"ter the ten6year marriage$ 7 an# / separate#.
At the #ate o" separation$ the stoc- was worth L:?4$444. .uring the marriage$ the stoc- ha# %een manage#
%y a pro"essional money manager hire# %y /. The entire L:?4$444 is /Bs separate property.
#. I" you have a separate property %usiness %ut the spouse who owns it spent no time managing it$ an# instea# pai#
someone else out o" the separate property %usiness pro"its$ it woul# not give rise to a Jan (ampNereira situation
%ecause it woul# not %e the community that was responsi%le "or enhancing the value o" it. ;ow i" the spouse ha#
quit an# spent all #ay managing stoc-$ then rise in value$ coul# %e attri%uta%le to community propertyBs la%or.
e. 2everse Jan (ampNereira!
(') (ommunity property enhance# in value %y separate la%or a"ter separation an# %e"ore #issolution.
EXAMLE!
One or %oth spouses start a %usiness #uring community$ then they separate. There is some time perio#
%etween separation an# #issolution. (ourt will have to #ivvy up allocation o" value o" %usiness %ase# upon
%oth what it was value# as while in the community an# what the separate la%or #i# to enhance the value
a"ter the economic community en#e#.
(,) 3imply invert the "ormulas!
(a) ereira!
Initial investment multiplie# %y reasona%le rate o" return an# the %un#le is #e"ine# as community
property with remain#er is separate property.
(%) Jan (amp!
(ompensate the separate property through a salary "or la%ors o" the owner an# spouse. 2emain#er o"
pro"its goes to community property owne# %y spouse.
()P*+(E+,CAL
7 an# / marrie# in '<9?. In '<<?$ 7 receive# L'44$444 in an inheritance "rom his uncle. 7 ha# always li-e# "roDen yogurt$
%ut was a"rai# o" gaining too much weight i" he ate it. 7e went on a quest to #evelop a true weight loss "roDen yogurt. 7e
use# some o" the inheritance as he travele# the worl# in search o" the yogurt secret. 7e "oun# it in )i5i in the water o" a small
stream in the 5ungle. 7e %ottle# the water an# use# the rest o" the inheritance to start a weight loss "roDen yogurt "actory. 7is
pro#uct$ *3limgurt$+ was a hit. 7e spent all o" his time supervising the %usiness$ which #i# well. 7is marriage #i# not. / "ile#
"or #issolution. 7ow woul# the court characteriDe the 3limgurt %usinessF 7ow woul# the increase in value %e allocate#F
Ieneral presumption that %usiness is community property which is re%utte# %ecause 3limgurt was esta%lishe# "rom
L'44$444 o" inheritance$ which is separate property. It appears to %e a %usiness owne# an# run %y one spouse %ut la%or
#uring marriage is community property. I" the community has spent time$ e""orts enhancing the %usiness$ community shoul#
receive interest in the %usiness upon #issolution. The court has #evelope# two tests V Jan (amp an# ereira to ascertain
how to apportion the interest. per su%stantial 5ustice. ereira applies when spouseBs special s-ills has enhance# the
%usiness$ so the initial investment multiplie# %y the reasona%le rate o" return is #eeme# separate property "or the spouse
#oing the la%or$ an# the pro"its go to the community. Jan (amp woul# apply i" %usiness was enhance# %ecause 7 was in
the right place at the right time or receive# capital investment. Applying Jan (amp requires compensating the community
property "or the la%or an# salary o" the spouses$ an# pro"its to the separate property owne# %y 7. 7ere$ court woul# li-ely
apply Jan (amp as it is unclear what special s-ills he ha# that enhance# value o" %usiness. 2ather he was in the right
place ()i5i) at the right time an# receive# a large capital investment that ena%le# him to travel to "in# the "ormula.
(ommunity property woul# %e compensate# "or his la%or an# pro"its allocate# to his separate property.
C. Persona% ,n6ury A&ar#s (OL JI.(.)
'. I" the awar# is commingle# with other community property!
It is community property
a. I" not commingle#$ upon #ivorce!
personal in5ury awar# will %e allocate# to in5ure# spouse$ unless 5ustice in#icates otherwise
EXAMLE!
;on6in5ure# spouse will get some o" the awar# where they gave up wor-ing in or#er to nurse the in5ure# spouse
(') In any event$ the in5ure# spouse can get no less than hal" the awar#.
D. Pro1essiona% Derees (OL JI...)
'. A pro"essional #egree is not community property!
a. (ommunity can get right o" reim%ursement i" community pai# "or it
E. Li1e ,nsuran-e (OL JI.E.)
'. A cash6value li"e insurance policy on the li"e o" either spouse$ pai# "or %y community "un#s$ is a community asset
su%5ect to #ivision upon #issolution o" the marriage.
,. I" the premiums were pai# partly out o" separate an# partly out o" community "un#s$ the procee#s are proportionately
separate an# community.
EXAMLE!
olicy owner pai# '4 years %e"ore marriage an# '4 years #uring marriage. /oul# %e ?4A community an# ?4A
separate. W woul# go to insure# spouse %ecause that person gets hal" the community property an# all o" the separate
property.
=. Mo#ern tren#s
a. /hole li"e insurance policies!
#ivi#e# pro rata %etween separate an# community property.
%. Term li"e insurance policies!
&ut term li"e woul# %e treate# as a series o" #ivisi%le contracts$ an# the last source o" payment woul# control
/. Disa$i%ity70etirement Bene1its (OL JI.I.)
'. Loo- at what the #isa%ility %ene"its are compensating "or!
a. I" #isa%ility payments are replacing lost earnings$ it is community property assets
%. /or-erBs compensation %ene"its are treate# the same way as #isa%ility %ene"its
,. 3ome situations ena%le a spouse to choose$ i" the #isa%ility allows them to retire$ to classi"y the %ene"its as retirement
or #isa%ility!
a. ension an# retirement %ene"its resulting "rom a spouseBs la%or are community property unless spouse has
agree# otherwise
%. I" #isa%ility allowe# spouse to retire$ then spouse can choose %etween calling it either #isa%ility or retirement
%ene"its. .isa%ility woul# have higher percentage classi"ie# as separate property. 2etirement woul# %e classi"ie#
as community property
c. (ourt will not allow the insure# spouse to choose #isa%ility over retirement i" the sole reason is to #etriment the
community.
=. I" retirement %ene"its are calculate# %ase# on the time spent at the 5o%!
(ommunity property su%5ect to equal #ivision upon #ivorce
a. I" the %ene"its are calculate# %ase# on some other system!
i.e. points$ then there woul# %e another "ormula$ an# typically it woul# %e num%er o" years person wor-e# at the
company
@. .i""erent stages o" retirement %ene"its!
a. Employee cannot #elay retirement to prevent giving share to non6wor-ing spouse
?. )e#eral retirement %ene"its an# "e#eral preemption
a. Employee 2etirement Income 3ecurity Act (*E2I3A+) has %een hel# not to a""ect the operation o" (ali"ornia
community property laws with respect to E2I3A retirement accounts.
%. E2I3A preempts state law #ealing with the e""ect o" #ivorce on #esignation o" the spouse as a %ene"iciary un#er
an E2I3A plan.
c. So-ia% Se-urity Bene1its
(') 3ocial 3ecurity %ene"its an# other "e#eral %ene"its such as un#er the 2ailroa# 2etirement Act are controlle#
%y "e#eral$ not state$ law. Thus$ 3ocial 3ecurity %ene"its are not community property an# the court cannot
#ivi#e them.
VIII. DISSOLUTION AND DIVISION OF PROPERTY
A. Legal separation$ annulment$ or #ivorce terminates the community regime. (OL JII.A.)
'. (ali"ornia recogniDes 5ust two groun#s "or #issolution o" a marriage or legal separation o" the parties!
a. irreconcila%le #i""erences causing the irreme#ia%le %rea-#own o" the marriageE an#
%. incura%le insanity.
B. A "i#uciary o%ligation to the other spouse continues until the property is #ivi#e#$ regar#less o" how long a"ter separation or
#issolution the #ivision occurs. (OL JII.A.)
C. In a procee#ing "or #issolution o" marriage or "or legal separation$ the court must #ivi#e the community estate o" the
parties equally in the a%sence o" an agreement %etween the parties. (OL JII.A.)
'. The value o" -ommunity property is #ivi#e# ?46?4. Equal #ivision.
,. The value o" asset is #ivi#e#$ not necessarily the physical asset itsel".
=. .o not say *equita%le #istri%ution.+ This is a #i""erent regime.
D. Quasi--ommunity property
'. ?46?4
,. (ali"ornia might not have 5uris#iction over real property locate# out o" state.
a. The court can or#er the parties to e1ecute conveyances to give the money value in the interest o" the property to
the other spouse
=. At #eath!
(ali"ornia community property system cannot reach property in another state
E. "a%uation an# +ime o1 "a%uation (OL JII.&.)
'. Ieneral rule!
Assets will %e value# at the time closest to trial
a. &ut upon goo# cause shown!
The court may value all or any portion o" the assets an# lia%ilities at a #ate a"ter separation an# %e"ore trial to
accomplish an equal #ivision o" the community estate in an equita%le manner
EXAMLE!
.uring the marriage$ 7 %egan a %uil#ing contracting %usiness. A"ter #ate o" separation the contracting %usiness
#ecline#. Evi#ence was pro#uce# at trial that 7 sai# that he #i#nBt care i" the contracting %usiness was run into
the groun#. / %rought a motion to value the contracting %usiness at the #ate o" separation.
/. 0eim$ursement (OL JII.(.)
'. /or A-2uisition o1 Property an# ,mpro'ements
a. arty who contri%ute# separate "un#s to acquisition o" community or separate property o" the other spouse will %e
reim%urse# "or his or her contri%utions to the e1tent the party can trace the separate contri%utions$ unless the
party has waive# the right to reim%ursement in writing
(') The amount reim%urse# is!
without interest o" a#5ustment "or any change in the value o" property$ up or #own$ %ut may not
e1cee# the net value o" the property at the time o" the #ivision
%. I" there is insu""icient equity in a piece o" community property to reim%urse "ully a spouseBs contri%ution o"
separate property use# to acquire# the community asset$ the court may awar# the entire asset to the contri%uting
spouse.
EXAMLE!
.uring marriage$ 7 contri%ute# L?4$444 towar#s the #own payment o" a community resi#ence value# at
L'44$444. The community contri%ute# the remaining L?4$444. 7 also contri%ute# an a##itional L,?$444 towar#
the improvement o" the property #uring the marriage. At the time o" trial the property ha# su""ere# a #ecline in
value an# was worth only LC?$444. 7 will receive the entire LC?$444 as his reim%ursement an# the community will
receive nothing.
,. /or ,mpro'ements
EXAMLE!
7 an# / have a house an# they a## a swimming pool or remo#el a -itchen with separate property. 3eparate estate
will get same type o" reim%ursement as in acquisitions (amount given$ no interest).
a. Tra#itional approach!
(') rior to ,44?$ improvements ma#e out o" separate property o" one spouse to the separate property o" the
other spouse were presume# to %e a gi"t.
%. Mo#ern approach (A"ter 'N'N,44?)!
(') (urrent law provi#es a right to reim%ursement when separate property "un#s are use# to improve
community property$ a%sent a transmutation. /here community property improves separate property$
reim%ursement to community.
(,) i" separate property o" another is use# to enhance community property$ then separate property gets
reim%ursement
(=) i" one spouse uses separate property to enhance separate property o" another$ still entitle# to a
reim%ursement.
The reim%ursements are amount o" e1pen#iture$ value a##e#$ less interest.
=. /or E#u-ation an# +rainin
a. 3pouse may o%tain reim%ursement "or the payment o" any separate #e%t with community "un#s or vice6versa
%. The reim%ursement will inclu#e interest. Ksually only e#ucation e1penses$ not living e1penses unless some
unusual situation.
c. There is a re%utta%le presumption that!
A"ter '4 years o" wor-ing at new 5o%$ no reim%ursement %ecause presumption is that community woul# have
receive# value a##e# %ac- in '4 years. (an %e e1ten#e# or re#uce# accor#ing to "act pattern.
#. olicy!
I" the community sen#s the spouse "or "urther e#ucation or training$ it woul# help the communityBs earning
capacity. ;o reim%ursement i" e#ucation is not to change 5o% or enhance s-ills that woul# %ene"it the community
e. 2eim%ursement "or community contri%utions an#Nor assignment o" loans is the e1clusive reme#y "or e1penses
relate# to e#ucation an# training in the property #ivision unless the parties have agree# otherwise in writing.
@. /or Payment o1 De$ts
a. 3eparate property is responsi%le "or separate #e%ts an# community property is responsi%le "or community #e%ts.
%. Tra#itional rule! (ommunity property is also responsi%le "or premarital #e%ts o" the other spouse$ even though
they are separate #e%ts.
(') I" property e1ists that may %e %etter suite# to satis"y that #e%t$ there may %e a reim%ursement.
(a) /hen the community pays "or o%ligation %ut separate property was availa%le to pay "or the o%ligation$
then community woul# get a reim%ursement
EXAMLE!
3pouse has a support #e%t "rom a previous marriage an# community pays support o%ligation. I" spouse
who was o%ligate# ha# some separate property that was availa%le "or use$ the community can %e
reim%urse# "or that #e%t o%ligation payment.
EXAMLE!
)ollowing separation$ hus%an# continues to pay the community cre#it car# #e%t$ the house payment
an# chil# an# spousal support out o" his post separation earningsE 7us%an# is paying community
o%ligations with his separate property. 7e woul# %e entitle# to reim%ursement "rom the wi"e "or her hal"
o" the community cre#it car# #e%t. I" he is living in the house$ then he is getting the %ene"it o" the
community resi#ence an# woul# not li-ely have a right to reim%ursement. I"$ however$ the wi"e is living
in the house$ with the hus%an# paying %oth support an# the house payment$ he will li-ely get
reim%urse# "or the "ull amount o" the house payment as he is servicing a community #e%t without the
%ene"it o" living in the house. The result may %e #i""erent i" he is not paying support as the post
separation payment o" the house while the wi"e an# chil#ren (or wi"e alone) live there can %e
consi#ere# support an# not a payment o" a community o%ligation.
IX. DEBT AND ALLOCATION OF LIABILITIES
A. A #e$t is! (OL JIII.A.)
O%ligation o" either spouse$ whether %ase# in tort$ contract or otherwise
'. A #e%t is in-urre# at the time!
(ontract is ma#e$ tort occurs or o%ligation arises
,. (lassi"ications
a. ;on6tort #e%ts that are not "or %ene"it o" community
(') Incurre# %y one spouse %e"ore marriage!
2emain the separate #e%ts o" that spouse
re6marital #e%ts are treate# #i""erently than pre6marital assets$ in that the community can %e lia%le "or these #e%ts (even
though they are consi#ere# separate property)$ regar#less o" which spouse has the management an#
control o" the property an# regar#less o" whether one or %oth spouses are parties to the #e%t or to a
5u#gment "or the #e%t.
(,) Incurre# #uring marriage$ %e"ore separation!
(haracteriDe# #epen#ing on whether they were incurre# "or the %ene"it o" the community
(=) Incurre# %y each spouse #uring separation!
2emain o%ligation o" the spouse incurring them
(a) I" it is "or the common necessaries o" the spouse or the minor chil#ren$ then the community may %e
responsi%le.
=. Ieneral goals o" protecting cre#itors
a. /here there are net #e%ts$ equal #istri%ution o" the remaining lia%ilities is not require#. I" the community #e%ts
e1cee# the total community an# quasi6community assets$ the e1cess #e%t may %e assigne# as the court #eems
equita%le$ ta-ing into account each partyBs a%ility to pay.
B. Lia$i%ity o1 Community Property (OL JIII.&.)
'. Ienerally the community is responsi%le "or premarital #e%t or #e%t incurre# #uring marriage$ e1clu#ing any perio#
#uring marriage when people were living separate an# apart
a. Although the *community estate+ is lia%le "or #e%ts incurre# %y one spouse %e"ore marriage$ the earnings o" a
marrie# person "or personal services per"orme# #uring marriage are not lia%le "or a #e%t incurre# %y the personBs
spouse %e"ore marriage$ so long as!
the earnings are hel# in a #eposit account in which the personBs spouse has no right o" with#rawal an# are not
comingle# with the community property$ e1cept o" an insigni"icant amount
%. Uuasi6community property is lia%le "or #e%ts in the same manner as community property.
EXAMLE!
&e"ore marriage$ 7 too- out a personal$ unsecure# loan "or L'4$444. A"ter marriage$ his cre#itors see- to o%tain
payment o" the note "rom /Bs earnings. / claims that the earnings are community property an# that the cre#itors
cannot collect on them as the #e%t is a separate property #e%t. I" / #eposits her wages in a 5oint account with 7$
her wages can %e use# to pay o"" the separate #e%t. / can only protect her wages i" she places them in a
separate account that 7 has no access to.
C. Lia$i%ity o1 Separate Property (OL JIII.(.)
'. 3eparate property o" the spouse who incurre# #e%t %e"ore marriage is also lia%le "or the #e%t %ut the separate
property o" the other spouse is not
a. A person is personally lia%le "or necessaries o" the personBs spouse while they are living together an# "or
*common necessaries+ while they are living separately$ an# separate property o" the person may %e applie# to
such #e%ts.
;OTE

()P*+(E+,CAL
7 an# / were marrie# in '<<4 an# separate# in ,444. .uring their marriage$ 7 pai# spousal support in the total amount o"
L?4$444 to a prior spouse. The payments occurre# each month "rom '<<4 to '<<?. 7 use# the salary he earne# #uring the
marriage to pay the support to the prior spouse. .uring the marriage he ha# L'44$444 in separate property investments.
(an / receive reim%ursement "or the community "un#s e1pen#e# "or 7Bs spousal support o%ligationF
(ommunity property is generally responsi%le "or premarital #e%t. 7owever$ where the #e%t6incurring spouse has separate
property to pay "or the #e%t$ the community is entitle# to a reim%ursement. 7 has to reim%urse community his chil# support
66 L?4$444 V as he ha# separate property availa%le to pay "or chil# support$ his e1isting pre6marital o%ligations.
D. +ort Lia$i%ities (OL JIII...)
'. (ommunity property cannot %e sue# to #ischarge the lia%ility o" one tort"easor spouse to the in5ure# spouse until the
separate$ none1empt property o" the tort"easor spouse is e1hauste#. 7owever$ in5ure# spouse can give written
consent to use the community property.
,. There is no 'i-arious %ia$i%ity "or the other spouseBs torts. A marrie# person is not lia%le "or any in5ury or #amage
cause# %y the other spouse to a thir# party e1cept where the marrie# person is in#epen#ently lia%le "or the in5ury.
a. Lia%ility o" one marrie# person "or personal in5ury$ wrong"ul #eath or property #amage is pai# "irst "rom the
community estate i" the marrie# person was per"orming an activity "or the %ene"it o" community when the lia%ility
arose
%. I" the community estate is not su""icient$ remain#er is pai# "rom the separate property o" the spouse incurring the
lia%ility
c. I" lia%ility is not relate# to an act "or the community %ene"it then it is satis"ie# "rom the separate property o" the
tort"easor spouse$ an# then "rom community property.
()P*+(E+,CAL
7 an# / were marrie# "or twenty years. .uring the marriage$ / wor-e# as a tic-et ta-er "or the alm 3prings Aerial Tramway. )or
more than si1 years$ until her arrest$ / em%eDDle# "un#s "rom the Tramway. These "un#s were use# to support the community. 7
ha# no -nowle#ge o" the em%eDDlement. 7 an# / were sue# %y the Tramway "or the em%eDDle# "un#s. The parties settle# the suit
"or L '?4$444$ an# the suit was #ismisse#. In the #issolution %etween 7 an# /$ 7 argue# that / shoul# reim%urse the community "or
the settlement amount$ all attorney "ees$ ta1es an# costs associate# with the em%eDDlement an# the civil procee#ing %rought against
the parties %y the Tramway. 3houl# 7Bs request %e grante#8
There is no vicarious lia%ility "or the other spouseBs torts. A marrie# person is not lia%le "or any in5ury or #amage cause# %y the
other spouse to a thir# party e1cept where the marrie# person is in#epen#ently lia%le "or the in5ury. 7ere$ the court shoul# grant
7Bs request "or reim%ursement %ecause / committe# a crime an# that he is not vicariously lia%le "or simply as the spouse.
7owever$ lia%ility o" one marrie# person "or personal in5ury$ wrong"ul #eath or property #amage is pai# "irst "rom the community
estate i" the marrie# person was per"orming an activity "or the %ene"it o" community when the lia%ility arose. 7ere$ / is
em%eDDling money that is investe# into the community "or the %ene"it o" community. / has to reim%urse the community
property$ minus the amount she investe# into the community "or their #aily living necessaries.
E. Crimina% Con'i-tion (OL JIII.E.)
'. I" a spouse is convicte# o" attempting to mur#er the other spouse$ the in5ure# spouse is entitle# to an awar# o" '44A
o" the community property interest in his or her own retirement an# pension %ene"its$ i.e.$ the convicte# spouse
"or"eits any interest in these.
X. EFFECT OF DEATH OF A SPOUSE
A. (haracteriDation o" property #oes not change$ it is 5ust a matter o" allocation.
B. The #eath o" a marrie# person terminates the community character o" any o" his or her property. (OL IX.A.)
'. One hal" %elongs to surviving spouse an# the other hal" %elongs to #ece#ent. This hal" o" the #ece#ent property can
%e given to another through will.
a. 7al" o" the property that was "ormerly community property will pass through the estate o" the #ecease# marrie#
person$ in a##ition to his or her separate property.
C. Community Property 9it. a 0i.t o1 Sur'i'ors.ip (OL IX.A.)
'. arties can now ta-e title as *community property with a right o" survivorship.+ The property is still treate# as
community property #uring the marriage an# at #ivorce$ %ut woul# pass to the surviving spouse outsi#e o" the estate
at the time o" #eath o" one o" the parties.
D. Quasi-Community Property (OL IX.A.)
'. A putative spouse is treate# the same as a legal spouse with respect to succession to the #ece#entBs separate
property an# quasi6marital property
E. Disposition o1 Community Property in ,ntesta-y (OL IX.A.)
'. In intestacy$ there is a #i""erent #istri%ution scheme "or the #ece#entBs hal" o" the "ormer community property than "or
his or her separate property.
a. The #ece#entBs hal" o" the community property an# quasi6community property goes to the surviving spouse$
regar#less o" whether there are issue
/. Lia$i%ity 1or Community De$ts (OL IX.A.)
'. .issolution o" the community %y #eath #oes not relieve community property in a spouseBs estate "rom #e%ts incurre#
prior to #e%t.
BAR EXAM APPLICATION
Uuestion =
Applicants were as-e# to #etermine the rights o" each spouse an# Ann$ an# to assess the a%ility o" cre#itors to reach the
separate an#Nor marital property to satis"y /en#yBs #e%t.
In '<9<$ 7er% an# /en#y marrie# while #omicile# in Montana$ a non6community property state. rior to marriage$ /en#y
%orrowe# L,?$444 "rom &an- an# e1ecute# a promissory note in that amount in "avor o" &an-. In '<<4$ 7er% an# /en#y
%ought a resi#ence using savings "rom their salaries #uring marriage an# too- title as tenants in common. In '<<9$ 7er% an#
/en#y move# to (A. In '<<<$ 7er% %egan an a""air with Ann$ who -new he was still marrie# to /en#y. 7er% move# in with
Ann$ telling /en#y only that he was getting his own apartment %ecause he *nee#e# some space.+ 7er% continue# to see
/en#y on wee-en#s$ an# even went to marriage counseling with /en#y. 7er% purchase# a car with his earnings in ,444E
title to the car was place# in AnnBs name alone. In ,44=$ /en#y learns a%out Ann an# "iles "or #ivorce. At the time o" "iling$
&an- ha# o%taine# a 5u#gment "or L9$444$ the past6#ue %alance on /en#yBs note. /hat rights to 7er%$ /en#y$ an# Ann
have in the Montana houseF /hat rights #o 7er%$ /en#y$ an#Nor Ann have in the carF /hat property may &an- use to
satis"y the past6#ue %alance on /en#yBs promissory noteF
Adapted from the February 200C California Bar Exam
H and ) ha=e a =alid marria;e in #ontana in 2343, and by =irtue of mo=in; to California in 2334, enter into the Bua>i/
<ommunity property >y>tem, ?here all the ri;ht> and obli;ation> of <ommunity property apply%
#ontana Hou>e
Bou;ht from <ommunity property fund> durin; marria;e% !t ?ould ha=e been <ommunity property if pur<ha>ed in California >o
it i> Bua>i <ommunity property% (he <ourt <an order that the hou>e be >old and that the pro<eed> be ;i=en to the <ommunity,
50/50, to H and )% *one to Ann%
Car
At i>>ue i> ?hen ) and H >eparated% !n order to pre=ail on Aeepin; the <ar a> >eparate property, Herb ?ould need to >ho?
that <ar ?a> pur<ha>ed in 2002 ?hen he mo=ed out% Ho?e=er, >in<e Herb did not expre>> prereBui>ite> of >eparation F he
>ee> ) on ?eeAend> and i> ;oin; to <oun>elin; / he i> >till ?ith ) until >he file> for di=or<e in 200:% 'o )endy ?ould be
able to pre=ail on >eparation bein; 200:, ?hen >he found out about the affair% Herb pur<ha>ed <ar from hi> earnin;> in 2000,
?hi<h belon; to the <ommunity property be<au>e they had not >eparated%
)hile title i> an indi<ator of o?ner>hip, it i> not determinati=e% Car i> titled to Ann here but the >our<e of fund> <ontrol and
here the <ar belon;> to the <ommunity be<au>e it <ame out of labor durin; the marria;e% Ann i> not a putati=e >pou>e F >he
Ano?> that >he i> enterin; into an affair and not a marria;e ?ith Herb, >o >he ;et> nothin;% Community ;et> the <ar%
BanA6> ri;ht to >ati>fy pa>t due balan<e on promi>>ory note
Community property i> re>pon>ible for premarital debt> of one >pou>e% ) borro?ed @25000 from the banA% 'he ?a> pa>t
due for @4000 on the banA before the >eparation of H and )% (he banA mu>t fir>t looA to the >eparate property that )endy
o?n> but if that i> not enou;h, the banA <an <ome after the <ommunity to >ati>fy the debt%
BAR EXAM APPLICATION
Uuestion @
Applicants were as-e# to #etermine hus%an#Bs rights to reim%ursement "or wi"eBs me#ical e1penses.
7arvey an# /en#y marrie# in '<<:. In ,44@$ /en#y was hit %y a car an# in5ure#$ an# she ha# no me#ical insurance. 7er
me#ical %ills were L'?$444$ which 7arvey pai# out o" a separate savings account that containe# money he ha# inherite# in
'<<<. /en#y was awar#e# a L?4$444 5u#gment "rom the motoristBs insurance company$ which she #eposite# into a savings
account in her name alone. /en#y an# 7arvey are now #ivorcing.
Is 7arvey entitle# to reim%ursement "or the L'?$444 that he pai# "or /en#yBs me#ical e1pensesF
Applicants must analyDe the requirements "or a spouse o%taining reim%ursement "or e1penses pai# "rom separate property
"un#s.
Adapted from the February 2004 California Bar Exam
California i> a <ommunity property >tate% Ea<h >pou>e i> an eBual partner in >u<h a >tate% H and ) ha=e a =alid marria;e
>in<e 233E in CA, >o they fall under the pur=ie? of <ommunity property% !n <ommunity property >tate,
)ife ?a> hit and in<urred medi<al bill> of @25000% H paid for the>e from >eparate property he had prior to marria;e a>
inheritan<e% )hen >eparate property i> u>ed to pay the medi<al expen>e> of one >pou>e, the >pou>e i> entitled to
reimbur>ement from the <ommunity, to the extent that <ommunity had >uffi<ient fund> a=ailable at the time of the in<ident or
if ) had >uffi<ient property to pay at the time%
Here ) had >uffi<ient property from the @50,000 Dud;ment a?ard% !f not <ommin;led, upon di=or<e, per>onal inDury a?ard
?ill be allo<ated to inDured >pou>e, unle>> Du>ti<e indi<ate> other?i>e% )endy ?a> a?arded @50,000 in Dud;ment from the
in>uran<e <ompany, ?hi<h >he depo>ited into her a<<ount% Ju>ti<e reBuire> that H be entitled to reimbur>ement of @25,000
that he paid for her inDurie>%