Term
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Definition
| Requirement: community property applies only to those who are validly married. A valid marriage must have: A. Elements of a valid marriage can be remembered with “All Children Love Chocolate”: 1. Age: must be 18 for marriage without consent (if 16-18, consent of 1 parent; <16 requires consent of parent and court) 2. Capacity: no incestuous marriage (no first cousins or closer in ID); no bigamy 3. License: must read an AIDS pamphlet before getting license 4. Ceremony: by a judge or certified clergy |
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Term
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Definition
| A presumption of marriage exists if the following elements exist: 1. parties are cohabitating 2. parties have assumed the rights and responsibilities of marriage 3. parties hold themselves out publicly as married |
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Term
| Porperty Acquired by Non-Married Co-Habitants |
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Definition
| Property acquired by non-married cohabitants is not community property, but governed by K principles (look for an express/implied agreement). The parties may have remedies in equity, contract or tort. |
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Term
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Definition
Premarital agreements: spouses may opt out of community property with a premarital agreement, which requires: 1. Technical validity (dot the i’s and cross the t’s) a. must be in writing b. must be signed by both parties c. acknowledged (notarized) and recorded, just like a deed 2. Subject Matter validity a. cannot agree to spousal maintenance or anything violating a child b. although opting out of community property is legal, if a spouse is left with nothing (no SP), agreement can be voided 3. Validity of Inducement: raised as an affirmative defense by the party trying to escape the agreement. Must show either: a. involuntarily signed (presentation the night before the wedding) b. terms were unconscionable because of lack of full and fair disclosure |
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Term
| Termination of the Community |
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Definition
1. Annulment 2. Written Agreement 3. Decree of Legal Separation 4. Decree of Divorce 5. Death |
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Term
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Definition
| Annulment: prenuptial agreements will be enforced to the extent necessary to prevent injustice |
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Term
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Definition
| Written agreements (“marriage settlements”): must be in writing, acknowledged, and if they effect real property, recorded in county where the real property is located |
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Term
| Decree of Legal Serapation |
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Definition
| Decree of Legal Separation: has the basic same effect as a Decree of Divorce |
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Term
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Definition
| Decree of Divorce: at divorce, the community assets will be divided substantially equally unless some special situation requires deviation from the equal division requirement |
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Term
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Definition
| Death: at death, the decedent can devise all of his SP and one half of the CP. If the decedent dies intestate, surviving spouse is entitled to the decedent’s share of the CP and all of the decedent’s SP unless the decedent left issue who are not also issue of the surviving spouse |
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Term
| Characterization of Property |
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Definition
| Characterization of Property: ID is a community property state. All property acquired during the course of a marriage is presumed to be community property. All property acquired before marriage is separate property. In addition, any property acquired by gift, devise, descent or bequest is separate property. It is the burden of the party claiming separate property to prove so by a preponderance of the evidence. |
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Term
| Separate Property Presumption |
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Definition
| Separate Property Presumption: SP is what is owned before marriage, or acquired after marriage by gift, devise, bequest or descent, the “natural increases” and proceeds of SP, but not the income of SP. Property conveyed by one spouse to the other is presumed to be a gift of SP to the grantee spouse. Unless SP is “transmuted,” it remains SP. |
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Term
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Definition
| Inception of Title Rule: ID follows the “inception of title” (or “time of acquisition”) rule – the classification of an asset as CP or SP is fixed at the time it was acquired. The fact that community funds are spent to improve or payoff separate property may give the community a claim for reimbursement (which can be secured by an equitable lien), but doesn’t change the classification of the property as separate property. |
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Term
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Definition
| The burden on proving the transmutation from SP to CP is on the person claiming the transmutation. (cocktail napkin case where guy transmutes his SP stocks to his wife is just seen as him trying to preserve their dinner date atmosphere) |
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Term
| Post-Marital Acquisitions |
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Definition
| Post-Marital Acquisitions: all property acquired after marriage – including the net income from SP – is presumptively CP, regardless of whether one or both names are on the title. Each spouse owns an undivided one-half and has equal right of management. (This is one of the strongest presumptions of ID law. The presumption even holds if there is only one name on a deed acquired during the marriage.) |
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Term
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Definition
| Assets-on-hand: all assets on hand during the marriage or at the time of the divorce are presumptively CP. The burden of proving that an asset is SP is on the party so contending, by clear and convincing evidence. (If you don’t know whether something is CP or SP, it is presumed to be CP. Watch for this on the exam.) |
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Term
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Definition
| Commingling funds and tracing: commingled funds are presumed to be CP. Can be rebutted by two ways: a. direct tracing: trace a “changed” item to the source of its origin (i.e. if a boat was bought with SP money) b. total recapitulation accounting: add up all community funds and then subtract all community expenditures. The remainder or any items that were bought outside of the remainder funds are considered SP. |
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Term
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Definition
| Quasi-Community Property: property acquired out of state is classified according to the law of the matrimonial domicile at the time the property was acquired, except upon death of a spouse. In decedent’s estate cases only, ID will treat as CP the following types of property acquired out-of-state, regardless of what the out-of-state law is, if the property would have been CP had they been domiciled in ID at time of acquisition: all personal property; all real property located in ID; real property located out-of-state if the other state allows ID law to govern. |
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Term
| Community Property to Improve/Payoff Separate Property (Vice-versa) |
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Definition
| If community funds are used to improve or payoff SP, the community has a claim for reimbursement secured by an equitable lien. In the case of improvements, the amount of the community’s claim for reimbursements is the increase in value of the SP attributable to the expenditure. If SP funds are used to improve or payoff community assets, the SP is entitled to reimbursement based on the amount expended secured by an equitable lien. |
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Term
| Management/Liabilities of CP/SP |
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Definition
| Management and Liabilities of the CP and SP: each spouse has equal right to control, manage and dispose of CP (i.e. one spouse’s signature is sufficient) with the following exceptions: 1. both spouses must sign to convey or encumber real property (but not as to acquire real property) 2. one spouse cannot unilaterally make gifts of CP without the consent of the other spouse 3. if one spouse is in collusion with a creditor, and it is unconscionable to the ignorant spouse |
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Term
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Definition
| CP and SP regarding debt payments: debts incurred during the marriage are presumed to be for the benefit of the community. SP is generally liable only for one’s own separate debts; CP is generally liable only for community debts. Exceptions: 1. pre-marital separate debt can be satisfied out of community property (so as debtors cannot escape their debts by marriage) 2. community debt can be satisfied out of separate property of the spouse who contracted the community debt |
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Term
| Post-Marital Increase in value of Business |
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Definition
| Post-marital increase in value of separate business: the increase of value of a separate business that occurs during marriage may be partially or entirely community. The part of the increase attributable as “inherent nature” is separate; the part attributable to community labor is CP. At divorce, the court must determine whether the community was already “fairly compensated” for community efforts. Consider: nature of the business and whether compensation to spouse was approximate to what a non-owner employee would have been paid for the same work. |
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Term
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Definition
| Retirement Plans: There is a preference for determining the present cash value of a retirement plan as of the date of divorce, awarding the plan to the employee-spouse, and awarding other off-setting property to the other spouse. If present cash value cannot be determined, or if there is insufficient off-setting property, the court, by a QDRO, can “reserve jurisdiction” to award both spouses their interest in the plan “if, as and when” the benefits are first payable (i.e. earliest eligibility date) 1. Present Cash Value (PCV) Method: using the “time rule”: community interest = PCV x (married years in plan/total yrs in plan) using the Maslen method: comm.. interest = PCV at divorce – PCV at marriage 2. Reserved Jurisdiction Method (aka “if, as and when”): community interest = (married years in plan/ total years in plan) x monthly pension 3. QDRO: Qualified Domestic Relations Order: signed by judge directed to plan administrator to make a non-employee spouse an alternate payee |
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Term
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Definition
| Stock Options: stock options that have already vested prior to marriage are SP. The community’s interest in annual stock options that vest after marriage during a year in which the parties were married is calculated in accordance with the following time rule: community’s interest in options each year = the number of days of marriage during the vesting year/365
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Term
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Definition
| there is no CP interest in an educational degree or professional license, but there may be a community interest in the “goodwill” of a professional practice or other business. In divorce, goodwill is the ability of a business to earn money based on efforts made during the marriage. To determine “goodwill”: take the average net income of the business minus whatever the owner has been paid for the business. Multiply by the predetermined capitalization rate. This is the “goodwill.” |
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Term
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Definition
| Personal Injury: damages to the body, e.g. pain and suffering, disfigurement, and for post-dissolution lost wages are SP. Damages for medical expenses and lost wages incurred during the marriage are CP. |
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Term
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Definition
Division of CP: absent compelling reasons to the contrary, the CP is to be divided on divorce “substantially equally,” although not necessarily in kind. In deciding whether unequal division of community property is proper, the court may consider: A. duration of marriage B. existence of ante-nuptial agreement (but court cannot amend or rescind it) C. age D. health and employability of spouses Remember: court cannot order sale of SP, but can impose a lien on it. |
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