Community Property

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  1. Community Property
    All property acquired during the marriage or partnership is presumed to be community property.
  2. Separate Property
    All property acquired before the marriage or partnership or after separation is separate property.
  3. Source Rule
    An asset purchased during marriage or partnership is presumed to be community property unless a party can trace the funds used for purchase to a separate property source.
  4. Commingling
    Separate property will retain its separate character during marriage or partnership unless it is commingled with community funds to the extent that it can no longer be traced to a separate property source.
  5. Property Settlement Agreement (Prenup)
    • A property settlement agreement to divide property and debts is valid if:
    • -agreement is fair on its face and made in good faith;
    • -entered into voluntarily with full disclosure of material facts; and
    • -there is opportunity for independent counsel.
  6. Improvements
    Improvements do not change the character of the property but may create an interest in the community in proportion to the increased value of the property offset by the benefit to the community of that improvement.
  7. Joinder Required
    • Joinder is required for:
    • -purchase or sale of real property;
    • -sale or encumberance of community household goods, furnishings, or appliances;
    • -sale or encumberance of business assets; and
    • -gifts of community property.
  8. Community Property in Intestacy
    Under intestacy, the surviving spouse receives all community property and 1/2 of the deceased's separate property. The other 1/2 of SP goes to the deceased's children.
  9. Alienation of Community Property to 3rd Parties
    One spouse may alienate all of his/her separate property and 1/2 of his/her community property to a 3rd party.
  10. Interspousal Gifts
    Interspousal gifts allow a spouse to convert SP to CP by making it a gift to the other spouse. This requires donative intent and delivery. The parties' intent controls.
  11. Inheritance and Gifts to One Spouse
    Inheritance and Gifts to one spouse during marriage are exceptions to the CP presumption and are SP.
  12. General Damages
    General damages, including pain and suffering and loss of consortium, are exceptions to CP presumption and are SP of the injured party.
  13. Special Damages
    SD, including lost wages and medical bills, are CP.
  14. Interspousal Damages for Tort
    SD for actual out-of-pocket costs are CP, but lost future earnings are 1/2 recoverable and are SP of injured party. GD are SP of injured party.
  15. Life Insurance
    The character of term life insurance is determined based on the date the most recent premium was paid. If paid during marriage and before separation, life insurance proceeds are CP.

    Once the marriage is dissolved, insurance becomes SP regardless of when the last premium was paid.
  16. Property Acquired Before Marriage, During Marriage, and After Separation
    The character of this property will be prorated based on the portion acquired during the marraige versus the portions acquired before and after.
  17. Earnings or Appreciation on Separate Property
    This remains SP so long as it can be traced to its SP source, has not been commingled, and no significant community effort was made during the union to increase its value.
  18. Real Property Purchased with SP as Down Payment and Secured with Community Earnings as Collateral
    This property is divided based on a fractional share of ownership with the down payment portion representing SP and the remainder representing CP.
  19. Effect of Dissolution on Testamentary Instruments
    Upon dissolution, all rights and interests of a party in a testator's will or nonprobate assets are revoked unless expressly provided otherwise.
  20. Marital Bankruptcy
    • Premarital debts or liabilities cannot be enforced against any of the CP or SP of the other party except for:
    • -maintenance and child support obligations;
    • -federal tax liens; and
    • -debts reduced to judgment within 3 years of marriage.
  21. Tort Claims By 3rd Party Against One Spouse
    A tort committed by one spouse will result in CP liability but there is no formal presumption. If a tort is found to be a separate liability, injured party may recover from SP of tortfeasor and 1/2 of CP.
  22. Community Debts
    Debts incurred during marriage are presumed to be community debts in furtherance of community benefit.
  23. Distribution upon Dissolution
    All property, CP and SP, is before the court to make a just and equitable distribution. Court may consider character of property, length of union, and economic circumstances of parties.

    All CP not disposed of shared as TIC.
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Community Property
2011-07-16 19:57:47
Washington Bar Exam Community Property

Community Property
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