CP Attack Outline:

Overview:
Marital Prop System v. CL Title System
Modern CL Equitable Distro:
o Ordinary (Maj) distro only marital property; Hotchpot (Min) distro all property
o At Divorce: look at both need and contribution (2 exception states)
o At Death: elective share
o During Marriage: creditors cant go after sps assets
CP (8 states)
o Gifts are SP; ownership during marriage
o At divorce (50/50 in many states); consider only need
o At death: can only give away 50% CP
o During Marriage: Creditors often go after CP
Modern CL sts can be very communitarian, just dont focus on comm. until dissolution
History:
1849: CA provides guarantee of SP to W so they dont get swindled by goldminers
1950: CA legis: MP law mimicking Spanish civil-law
1860: George v. Ransom: income from SP remains SP; reject Spanish rule creeping socialism
that SP is also CP; CA Rule: labor during marriage is CP; if more than de minimis effort to
generate SP incomeCP; but, Appreciation itself is SP
1927: sps interests in CP are present, existing, equalpresent int in sps future marital earnings
1969: Family Law Act: no-fault divorceno consideration of fault in distro; 50/50 division
No-faultWs lost economic leverage under ED; CAs irreconcilable diffs
Ls got together bc they didnt like the lying involved in fault divorce
1940-present: expansion of definition of divisible property; more equal mgmt
Ways of Thinking about MP and Interspousal Wealth Distribution
1) MP as simply a property system
Problems:
a) Conflation of ownership and distributionbelief that just resolution is 50/50
b) Dichotomization of prop and support claimsstrength of prop entitlement tends to minimize nonentitlement-based support claims
c) Distro rules must be considered w/jurs other means/practices of wealth redistro
2) Partnership view of Marriage
Used to rationalize ED principles in CL states.
Theory: both sps contribute, entitled to int in assets acqd by either during marriage
Stttry emphasis on homemaker/mkt contribution suggests sps may contribute diffly along gender lines
Vindicates reas expects from spl behavior/understanding during mar-sacrifice for good of marital unit
Normative construct: encourage sharing patterns; mirror image of Am marriage & family life
Con: deflects attention from prop distro goal; substv equality often reqs Ws get >50% MP at divorce
3) Family Wealth Redistribution
WR is important ec fn of family; when families are broken by divorce, prop distro & support obls
maintain wealth redistro fn of intact family
Less likely that family members will become public charges
4) Marital Property as a Mechanism to adjust sex-related economic inequality

Most men/women not similarly situated in marriage and labor mkt; divorce poses diff/unequal risks

Wirth (NY 1971): (bad law) presume household expenses are gifts where no implied repymt;
constructive trust doesnt apply unless advisor has only Cs interests in mind.
Over-demanding of fraud req; this scheme allowed someone to just change their mind
Painter (1974 NJ): ED factors: earning ability, duration of marriage, property, & debts
Boil this down to need and contribution; here they gave 20%
All gifts received are for ED; Marital property includes gifts;
acquired redefined and expanded; in Dictionary, they find that acquired includes gifts.
Policy: ED shifts from alimony to prop distro;
Cleaner break than alimony; dont have to feel like youre on the dole; easier to enforce
Problem: Americans dont save
Spouse who needs more, likely contributed less
In CA: look to how much supported sps earning capacity was impaired by periods of
unemployment to spend on domestic duties
Contribution: which party contributed to acquisition of assetsbut increasingly we look
to value of homemaking, childrearing/raising
Gifts:
Marriage attracts gifts from parents (parents want grandkids).
Gifts could be for prior labor provided to parents by kids. In that sense its earned.
Should we care about the intent of donors?
Proviso: except that interspousal gifts shall be subject to ED.
Assume theyre quid pro quo; conditional on marriage not ending in divorce
However, in CA, all gifts are absolute
Rationales for property systems?
Marital property system (as opposed to title) best reflects intentions of parties.
Uniform Marital Property Act (only in WI) has adopted this.
Three different points:
1) During relationship, most Ams express strong community feelings; things are ours
2) During relationship, both parties dont necessarily have the same view
a) Could explain differences by GENDER or ECONOMICS
b) Women feel more community-oriented
c) Could argue Hs have more to protect, Ws want Hs wealth by being part of comm;
d) Likely socialized to have these viewpoints
States legit interest in disregarding popular preferences?
Consider parties intentions
Welfare Concerns
o Children concerns
o Welfare concerns (public purse)
o General welfare
Normative: Encourage partnership
Mythic: we like story of cooperative couples; choose laws reflecting what we like to think of us
Sexual Justice: Protection of weaker party (traditionally W).
Martial Justice: specialization occurs naturallydistro required (Becker)
Gender Justice: eco superior/inferior

Social Justice: marriage as social institution HW considered in socialized context

o Becker: Contractarian (K theory requires fault for breach)
Predictions arent coming truevalue is more descriptive
Spouse with greater earning capital will enhance human capital of self at expense of
other; thus, ever increasing gap in earning capital.
o OConnell: Social Feminist
Insists that parent who decides to devote herself to child rearing must not end up in a
worse position than a parent who devotes herself to the labor force.
Law shouldnt make cripple W who decides to stay at home. W shouldnt bear cost
upon dissolution. Child rearing role must be made less economically perilous.
Women are going to stay at home anyways, so their work should be valued.
Law does not have to encourage staying at home, but it should allow such decisions.
Normative: Look at what people actually do instead of what they should be doing.
o Herma Kay: eliminate spousal support for young women because it encourages dependency.
Split custody to flatten out disparity in std of living
Give spousal support only to aged home maker.
Believes that normative effects of law will encourage women to go out and work if
they know that they wont get spousal support.
Dont want to support women who make economically crippling decisions.
Both men and women should be responsible for taking care of children.
Not concerned about efficiency, only about equality.
In order to achieve equality, men and women need to make the same choices.
Kay: I can do it, so can you attitude.
Blumberg: Should look at particular individuals life.
o Prager: cooperative behavior is good for marriage
o Look at families as state-apptd support system; social partnership adjusts inequalities and
requires marital justice
Intact family is important bc it redistributes wealth from H/W to poor kids
o Blumberg: conservative
favors legal devices maintaining the distro
spousal support is more sensitive subject than redistro
ss has had neg connotations, not awarded well, nor paid
Redistro well-liked
W/kids generally come out badlyShe favors greater redistro
Our preferences are hardly ever value-free.

PV: Amount per annum divided by interest rate = Total Needed

Moral: Value of any asset is capacity to create future income.
Contracts:
Pre-mar: allowed bc encourages marriage (rich widower; kids from prev mar); also, we love Ks
Marital Agreement: usually to change char of SP
Separation Agreement:
TOT (Transmutation Over Time):
ALI follows CA distro. All SP over a TOT becomes CP (after a long marriage).
This would be compromise; notion that over long marriages, people tend to think of
things as ours
Dawley: unenforceable only if terms are promotive of divroce (not true here)

Marriage to avoid shame/loss of employment from having bastard son. Each waived CP rights.
Married for 9 yearsW claims unenforceable bc made in contemplation of short-term marriage.
Dicta: waiver of support DOES promote divorce
Could argue UI or changed circs
Noghery: promotive of divorce if terms leave one party better off due to divorce
In the event of divorce, W gets house and at least 500k. (she seemed like a gold-digger)
Problem of Noghrey/Dawley combo: together, favor richer spouse
Professor thinks they should drop Noghery rule
Borelli v. Brusseau: void if against public policy (cant K to will stuff if W nurses: pre-ex duty)
Court doesnt like this death-bed bargaining
Generally:
look to whether unconscionable when entered;
no consideration required for pre-mar bc marriage is consideration itself
Many states look to time of dissolution to determine if unconscionable
Pendleton: pre-mar waiving spousal support not per se unenforceable (against Dawley dicta)
Unlike in Dawley, both parties here were smart, self-sufficient, had access to counsel.
Sucks bc it implies well the right decision when the right case comes
Bonds: absence of counsel isnt dispositive of voluntariness (she knew what she was doing)
1612 seems to reject Nogbhery: pre-mar can include (but child support cant suffer):
1)
rights/obls of each party in prop of either/both whenever/wherever
located/acqd
2)
dispo of prop at dissolution/sep, death
3)
any other matter not violating public policy or imposing criminal penalty
1612 also allows 2nd look: void if unconscionable at time of enforcement
1615: presume not voluntary unless reppd by counsel OR expressly waived repthen need to
be fully informed of terms; be proficient in the language; declarationsAlso allows other
factors as relevant
SoF:
1611 : pre-mar shall be in writing; signed by both parties; no consideration reqd
Sof Avoidance:
Execution of Executory Oral Promise
o Freitas: making W policy benny executed oral K; so H is bound, cant use SoF
Man promises woman to make her ins benny if she marries; he changes
mind, makes kids bennies
Policy: fraud isnt a concern where the party already executed
Detrimental Reliance (raises estoppel)
o Sheldon: H estopped from SoF where W relied on promise to her detriment
Old age marriage; oral pre-mar that neither would share others estate
W relied on promise to make estate plan to provide for kids; dies

 Passive reliance: not changing her will was sufficient

o Note: marriage itself cant be the detriment: 1) otherwise doctrine would apply to
all pre-mars; 2) marriage is good
Transmutation: agreement to change char of property
Pre-1985: no formal reqs for property agreements made during marriage (historically liberal)
Dispo not considered important bc of feeling of unit; married ppl dont write Ks;
marriage is informal
After 1984; it becomes formal (Ls want this bc they see fraud/perjury especially at death)
Raphael (1949): explicit oral agreement immediately converts SP
Filing returns was not dispositive/necessary for transmutation, just evidence, though some
evidence would likely be necessary
Jafeman (1972): if no explt agr, need evid of intent to transmute; benefitors intent not probative
Referred to as our home (doesnt matter); no evid H showed intent
CA rule that mere prop in marital relationship doesnt effect transmutation
CP used to improve SP is considered a gift
Nelson: SP can be converted to CP by oral agreement proven by acts of parties
H referred to prop as mutual, expressed desire to provide for W; joint returns; W
managed prop
After 1947, joint filing doesnt provide evid of transmutation
Post-1984: transmutation through agreement or transfer of prop w/o consideration must comply
w/ formal reqs: writing/express declaration/accepted by party adversely affected
MacDonald (1990): literal interp express declaration; extrinsic evid ok if a word is ambig
Banks IRA accts (CP) wording wasnt quite sufficient
Here, it seems overly rigid since she was dying of cancer and acted in many ways
consistent with transmutation; but courts want to give effect to all words in sttt
Banks changed wording since the case
Should say: I relinquish all my SP interest in X to my W.
Scope: we cant take this literally, otherwise there would be no title: cant buy a car for
wife just by putting it in her name only

In CA, no distinction in strictness for SPCP/CPSP.

Transmutations are ineffective as to creditors
Meija: divorce-related prop transfer at dissolution is not transmutation; marital
settlements are subject to UFTA (conflict w/Gagan)
Cambell: 852 bars extrinsic evidence for estoppel

853: will statement regarding char of prop is not admissible evidence

Policy: Ts intent can change bf death & living intent should trump previously writing
In re Summers: source of funds not enough to overcome presumption that title reflect parties
intent; form of conveyance destroys presumption that prop is CP
HW JT title w/daughter for RP; used CP funds.

852 only applies to interspousal transfers.

Policy: theyre just using CP, not converting it;

Definitions:
CP:
only acqd during existent of marital ec comm.
760 weak presumption overcome by simple tracing; ALL PROP wherever situated,
acqd by married person during marriage while domiciled in state is CP
SP:
Owned by person bf marriage; acqd after marriage by gift/bequest; income from SP
Onerous: acqd by labor/valuable consideration
Lucractive: acqd by gift, will
Clark: even if acqd during marriage; if exchanged for SP, its SP
Majors son dies leaving little; marries W and contests sons willsettles, dies;
He got them by statutory right as heirso its SP even if son died AFTER M married
Look to the time of the origin of the right
Andrews: personal K during marriage to acquire propCP
Oral K to take care of father in exchange for will; Alaska; H wants Ws testimony of agr
Consideration was performed during marriagerecovery under K; thus, W would benefit
and is an interested partycant testify
Downer v. Bramet: gift for conveyance purposes not nec gift fr CP purposes
After divorce, H gets ranch from emp; it was a gift, but was earned by marital labor
No evidence of personal relationship bw emp/ee; looks more onerous
Tracing:
SP contributor traces funds to SP contribution to estab ownership interest
SP proponent can estab whole/partial SP interest if bought w/ a) pre-mar SP; b) income
from pre-mar SP; prop acqd by gift
4800.2/2640 (post 1983 transactions) applies reimbursement-only rule to joint title assets
Evidentiary Presumptions:
Fns of Legal Presumptions: 1) probabilities; 2) access to evidence; 3) public policy
strong public interest in providing for childrenirrebuttable presumption of being the
dad if W gives birth (but is it constl)
Presumptions come from caselaw
Three views of presumptions:
1) Thayer (ALI-adopted): prelim assumption disappears from case at intro of evid sufficient to sustain
2)
3)

finding of nonexistence of presumed fact; merely a determination that same fact exists so frequently when
prelim facts exist that proof of conclusionary fact unnec, unless contrary evid
Morgan/McCormick: policy reasons. If policy underlying presumption is of sufficient weight to req
finding of presumed fact when no contrary evid, should be of sufficient weight to req finding when mind of
trier is in equilibrium; should be of sufficient weight to req finding if trier doesnt believe contrary evid
Bohlen (Evidence Code): Thayer is correct for some presumptions, Morgan for others. Variety of
reasons for presumptions; no unified theoryrebuttable presumptions are classified as either 1) those
affecting Burden of producing evidence (Thayer); or 2) those affecting BoP (Morgan).

Lyman v. Vorwerk: prop possessed during marriage presumed to be CP acqd during marriage
HW joint bank acct; now nobody knows how much money acqd during marriage
Problem: justifies presumption only on probability (doesnt apply to short mars)
Mahoney: prop possessed during mar is not presumed to be acqd during marriage
Plane Accident Ins Policy; Short-term marriage; CP proponent must show acquisition
Court was saying: payments must be shown to have been acquired during marriage
Problem: $1 premium couldve come from anywhere; should look at WHEN acquired
General:
If long marriage, use Lyman; short use Mahoney (less likely acqd during marriage)
Possession at end of marriage normally conclusive of possession during marriage
UMPA draft would presume property owned during marriage is MP (SP proponent has
greater access to evidence
CP not awarded at divorce becomes TiC
Prof doesnt think presumption is weak/strong: only rebuttable or not bc still need 50%+
Prof thinks Mahoney is wrong: shouldnt be assigning burdens bc unlike civil cases, here
its a burden to everyone; point of burden is that only one party should have it; Lynam
solves this: burden NOT on CP proponent bc they dont necessarily control SP party
JT is disfavored bc of forfeiture
Meyer v. Kinzer & Wife (1859): presumption only overcome by c/certain proof owned by
claimant bf marriage or acqd under stttory exception
Sup Ct says heightened std doesnt apply; just preponderance
Where presumption weakfinding w/o substl support can be set aside
Form of Title:
Absent collateral agreement; form of title is evidence of gift (cant give CP to self)
If one sp buys with title in others name alone, transmutation inferred (but MacDonald)
JT: G to X&Y as JTs or G to X&Y as JTs w/RoS
TiC: G to X&Y (bf 1974) or G to X&Y as TiC
CP: G to X&Y as H&W or (after 1974) G to X&Y as CP
JT v. CP:
During marriage:
o Creditors can reach CP; only int of JT
At Death:
o Stepped-Up Basis for Income Tax:
CP: sps passes to survivor (unless will says not); when survivor sells
later, entire historical cost of prop is stepped up to FMVno tax gain
JT: sps passed via survivorship; only dead sps share is stepped up
No diff for estate tax purposes
At Divorce:
o Distributional Issue: bf 1970, under fault divorce if CPcourt reqd to give
bigger % to innocent sp
o Jurisdictional Issue: If JT, ct had no jurs to distribute (just 50/50).

o Today, ct can distro JT AND TiC if one party requests distro.

CP w/ RoS
o Passes to surviving sp auto at death (like JT)
o Problems: doesnt affect already existing title, only prospective purchases
o Step-up benefits are unclear
Escrow agents favoring JT is stupid since 1975: prop passed to sp doesnt need probate
Schindler: stated JT title remains if insufficient evid that both parties wanted CP. W
didnt understand difference, too bad for her.
Bowman: where W believed it to be CP and H said was only JT to avoid probate, no
evidence of intent against CPCP.

Married Womens Special Presumption: (pre-1975)

If RP/PP acqd bf 1975 by married woman in writing, presumptions (conclusive in favor of
person dealing in GF for valuable consider w/married women):
1) If in her name aloneSP
2) If in her name AND anothersW takes as TiC unless another intent in instrument
3) If 2 people described as H&Wpresume CP unless diff intent expressed in instrument
Perverse: if H&W take title together, not described as H&WH gets 25%; W gets 75%;
this is what happened in Dunn v. Mullan (1/2 TiC for her; of his CP)
Rationale for presuming Ws SP: bf 75, H was mgr of CPif in Ws name, assume H put
it in her name knowingly/voluntarily
How to rebut presumption:
Holmes: tracing to CP is insufficient to overcome MWSP; need evid H didnt intend gift
o H bought RP in her name only; only evid was that he paid from joint earnings

Louknitsky: no knowledge/control over CP while out of countryno way H intended gift

o W put all prop in her name; much of prop bought w/Hs earnings; H in China
MWSP repealed in 1975, but still valid for pre-75 transfers today
Gift intent presumption generally remains

SP Contributions to purchase price of jointly title property are presumed a gift:

Pre-1984 use Lucas: taken as joint/equal title (JT, CP, TiC), SP contributions presumed gift
Bought house/motorhome in 68, JT. W made SP DP, claimed pro rata interest.
2 types of presumptions:
o weak (property acqd during marriage is CPjust use tracing)
o strong (once property in JT title, need collateral agreement (written/oral))
If agreementAufmuth/Moore/Marsden
If no agreementno reimbursement
Anti-Lucas 1984-1986 Legislation (not retroactive per SCOTUS)
4800.1 (only at divorce, not death) JT presumed to be CP

4800.2 (only at divorce): if CP presumption NOT rebutted, SP reimburse to extent traced

unless waived (must not exceed property value at time of divisionif investment loses
value, you only get FMV
SP contributor always entitled to reimbursement (apportionment only if written agr)
Dont treat 4800.1-.2 as cumulative. If JTtreat as CP
Should be read as in division of CP you cant otherwise take as SP
Apply Lucas to every JT case bf 84, all CP pre-87
1987 Legislation:
Expands 4800.1 to all forms of joint/equal title (JT, TiC, TbE)
At death, Lucas still controls
Buol: no retro application if TC has already issued divorce
Lucas agreement to keep Ws earnings separate, house JT; H was drunken gambler;
Cant make someone show writing when they didnt know theyd need one
Fabian (1986): no retro reimbursement
Motel taken as CP; Hs SP improvements; no Lucas agreement, so tried to use 4800.2
Compelling state interest in removing confusion is not sufficient
Hilke (): retro app of 4800.1 ok for vested interests only (JT not vested); relate back to date of
divorce for bifurcated divorces where sp dies bf distro. If death bf divorce, no divorce
H died during dissolution; claim failed bc in 1983 when 4800 enacted, survivorship int
was subject to condition of surviving W): only apply to cases already pending in 1984.
Heikes (1995): gives us the history; no retroactivity
W died bw determination of marital status and prop distro; divorce action abates, JT kicks
in; Court says: Hilke: doesnt apply
To extent traced to sep source; prof says this is std mis-reading of statutethis is an
effective gift, but court logic says you cant make a gift
Walrath: tracing beyond initial asset (re-financing) ok
Establish equity in initial prop at time of refinance; SP contribution divided by equity
As refin. Funds applied to new acquisitionsSP credited w/proportional contribution
Generally:
Pre-1984 transactions, when effect of 4800.1/4800.2 would impair vested property right, they
shouldnt be applied. Use Lucas and other case-law.
1984-86: use 1st version of 4800.1, 4800.2. Use caselaw where not covered by sttt.
1987+: use 2nd version of 4800.1, 4800.2; cover by caselaw where not under sttt.
Improvements:
Improvement to freehold merge into char of freehold; not blindly applied in mar
Personalty is transformed to realty
PP is worth more when attached than sum of parts
Warren: when CP mgr uses CP to improve SP, dont presume gift by comm.
Otherwise, would be self-serving; comm. gets reimb cost of improvement OR value
added whichever is greaterdont want sep estate to benefit at expense of comm.

W used CP to improve her SP in construction; bldg worth 5k less than improvements;

court says CP need be reimbursed cost of improvements here
Jafeman: when CP improves Hs SP, reimb only if w/o Ws consent
W consented here to, no reimb.
Court is looking for literal consent, not knowing consent
Improvement Scenarios
CP used by H to improve Ws SP
CP used by H to improve Hs SP
(Warren scenario)
SP used by H to improve Ws SP
SP used by H to improve CP
(Lucas/4800.1/2581 + 2640 apply)

CP used by H to improve CP

Presumed gift, unless there agr where W consented to Hs sep

ownership (Jafeman). Why: b/c H voluntarily acquiesced to give
up CP int knowing improvement would merge into Ws SP.
Not presumed gift. Comm gets back greater of cost of improvement
or value added [PV of prop w/ improvmt - PV w/o improvement].
Presumed gift, unless agr where W consented to Hs sep ownership.
o
Pre-1984, presume gift & no
reimbursement.
o
1983+, sep estate reimb (or pro rata
ownership if written agr).
No problem.

Family Expenses:
1) Available CP funds presumed to have gone to family expenses. SP funds deemed to
have gone to family expenses only when comm. funds exhausted.
2) When SP funds used for family expenses, sep estate has no right to reimb unless
parties have agreed otherwise.
Classification of Property:
Commingling:
Ask the nature of the expenditure
a. if family expense (consumption)presume coming from CP
b. if community funds exhaustedSP funds are applied
c. If CP comes in later, no reimbursementyou have duty to support family thats
not limited to CP.
See: recapitulative accting prohibited in exhaustion analysisl. SP proponent needs adequate
records showing at time of acquisition FE exceeded comm. income
H had commingled accts; once commingled, burden is his to show tracing; must use
exhaustion here; guy bough/sold assets in security acct, transferredcomingling;
Recapitulation is comparing total CP & FE at divorceif FE greater, mustve used SP.
Tracing Methods:
Direct: show that at time of purchases:
1) sufficient SP funds; 2) intent to use SP funds to buy SP asset
Exhaustion: show at time of purchase, CP was exhausted by payment of family expenses;
mustve been bought w/SP
Partial Exhaustion: if cant show intent, must apply
Mix: direct tracing requires adequate records (which can be supplemented w/honesty)
Ws evidence was schedule of SP income and expenditure; her testimony in addition was
sufficient evid (court liked herLawyer v drunk musician)
Considered bad in that it allows biases (gender included) and sympathy to rule
Murphy: inadequate records and no evid of intent to use SP fundsdirect tracing fails

Legatees trying to show that prop he acqd during marriage was SP; cant use exhaustion
bc both SP/CP were available; no records left; dead so cant show intent
Frick: documentary evidence must be comprehensive/specific
H failed to keep really good records regarding encumbrance (debt on hotel to
TransAmerica) paid down during marriage
Note: if house burns down, no records, recap might be ok.
Business Profits:
Only recognized when comm. labor has enhanced business value
Note that both methods use recapitulative acting bc commingling is unavoidable
Pereira: value SP component, reside is CP; use when gain is attributable to skill/labor
o Annual % yield x years of marriage + principal = S/P Interest.
o CFMV - S/P Int = C/P Interest
FMV accounts for family expenses, so dont have to deduct them again
Van Camp: value of CP component, reside is SP; use when gain attributable to capital
o Reas salary x # of years of marriage - Family Expenses x # of years = C/P labor
o FMV - C/P labor = S/P interest.
Use Van Camp:
spouse has monopoly/patent
Use Pereira for:
easy-entry business that booms
Beam: lays out VC/PereiraH got inheritance bf marriage; wasnt employed during marriage,
but handled SP capital. Only money earned was from SP capital. W wants SP share bc value
enhanced at CP; but H did shitty job and didnt enhance capital
Gilmore: apply VC to car dealership after war bc it wasnt Hs labor, but the mkt
Tassi: apply VC bc meat business earnings where attributable to business, not svcs
Bad for small business owners bc they put in so much effort
Note: ALI only adopted Pereira.
Denney: W who doesnt keep good records of rebuilding business gets no CP return
H drank away donut business and W rebuilt it; court is lazy, says worth the same at
beginning as at end so no CP interest
Then again, what if there were just a couple of bad yearsdont want to penalize H
Reverse Van Camp/Pereira:
Accounting values post-sep comm. interest in business started during marriage that after
sep continues to be managed by managing spouses (SP) labor
Use Pereira when capital is ordinary, but post-sep SP labor is extraordinary
o For example, if neighborhood becomes gentrified at separation
o If great review came shortly after sepmore likely due to marital labor
o Value of CP at sep + [Reas Rate Ret * CP Capital value * # yrs bw sep/divorce]
o Subtract from FMVSP share
Use Van Camp where post-sep SP labor ordinary, CP capital responsible for income
o If H became great chef after sep
o FMV - [reas salary * # yrs bw sep/divorce] SP expenses = CP share

Credit Acquisitions:
Lenders look to: income (CP); personal credit (CP); collateral (SP or CP)
CA doesnt allocate loan proceeds; its unitaryall CP or all SP
Cant characterize if the loan item is the collateral also
Presumption of CP if acqd during marriage if reliance on SP cant be proven
Gudelj: loan proceeds same char as collateral relied on: Did lender primarily rely on SP?
H failed owning cleaner business; bought another w/SP and a loan
Char of prop acqd by sale upon credit determined by intent of lender to rely on SP.
Here we dont have evidence of intent by lender to rely on SP sold to cover
Problem w/test: lender relies on all factors together, not primarily on one so not realistic
Ford: intent of lender is determinative (but so are technicalities)
2 farms; 1 is SP (traceable to bf marriage); got loan to buy out brother/incidentals
Payments on loan made w/farm income
W shows that they lent on basis of CP assets; W signed note; our farm (worthless)
Court looks at technicality: Ws signature doesnt show banks knowledge/intent
Note that Hs arg that CA cts dont apply CP system to out-of-state CP-paid RP is wrong
Problems:
Why not put burden on H instead? Here, ct shifted burden to W (didnt use CP presump)
Why not ask whether bank primarily relied on SP (it couldntve been more than 50%)
She assumed liability by signing
Grinius: did lender solely rely on SP and did so?(this 7/9 factor test is not used)
Problem: even if they rely on SP, they rely on CP to foreclose
Apportionment of Ownership:
Vieux (1926): CP shares title in proportion as amt contributed to purchase price
If bought during marriage, before apportionment, use 760 CP presumption and see if
form of title is sufficient to overcome CP presumption and use tracing to SP
o If in purchasers name onlyallow tracing
o If in Joint formif not under Lucas or 2640 agreement (look to
dates)reimbursement only; no SP interest so its all proportional
o If in other spouses name only: presume gift. If no gift shown and can be
traced, allow apportionment
If bf marriage, initially SP, but use apportionment for CP int in marital appreciation (MA)
Moore: Pre-marital loan proceeds, not pre-mar appreciation
SP Share = SP Share of MA + SP DP
o SPs % = [SP DP + [SP Loan CP DR])/PP
o SP Share of MA = MA * SPs %
CP Share = CP Share of MA + CP DP
o CPs % = CP Debt Reduction / PP
o CP Share of MA = CPs % * MA
Totals add to FMV

Aufmuth: property and loan proceeds are CP

SP Share = SP DP + SP Share of MA
o SPs % = (SP DP)/PP
o SP Share of MA = MA * SP %
CP Share = CP Share of MA + CP Debt Reduction
o CPs % = (CP Loan Total (not debt reduction)/PP
o CP Share of MA= MA * CPs %
Dont forget that totals will add up to FMV less outstanding debt
Marsden: if pre-marital appreciation
SP = ((SP DP + Loan Debt + pre-mar Debt Reduction)/PP)*MA + pmDR + DP + pMA
CP = (DR/PP)*MA + DR
Moore/Aufmuth/Marsden are recapitulativedont reflect when appreciation actually happened.
Tort Recoveries/Ins Proceeds:
Character of property damages recovery depends on character of damaged property
Personal Injury:
Non-CA Replacement Approach (what is character of the element that damages replace?)
o Break up into elements: Bodily injurySP; Pain sufferingquestionable (usually
SP); Med Expensesdepends on which estate pays (usually CP); Lost
EarningsCP; Punitive Damagesquestionable
CA approach (not replacement)
o Depends on CoA arose
781: SP if CoA arose after informal separation (or legal/divorce).
Recovery against other spouse always SP
2603: if CoA during marriageComm Estate PI Damages
hybrid bc its neither lucrative nor onerous
Damages to injured party as if SP (unless commingledno
tracing allowed)
Exception where facts warrant otherwise (interests of justice;
length of marriage; (no court has used this exception))
Minimum of goes to injured party
At Death, look to 780CP only (creditors CAN reach)
Life Insurance:
1) Term: no $ value; right to reinsure has no value if insured is insurable.
2) Whole: value; when theres policy on living person w/cash value value is CP in
proportion to CP used to pay premiums
Logan: character of most recent premium is determinative of policys character

CP only for period beyond separation for which CP funds used to pay
premium

Dicta: Term policy isnt divisible asset bc policy is valueless

Dicta: if insured becomes uninsurable during term paid w/CPright to future

insurance has value (PV of value at date of expected death)

Bf Logan, courts said no CP after divorce in Term LI

Jurek: injury compensation is SP; lost waged/med expense from CP is CP

PI recovery 2 days after filed for divorce; lost arm after separation
Goodwill: (residual value)
Lukens (1976) goodwill is an asset
Professional and Business Good Will:
Property
Marriage
Permanent Separation
CP stock
CP
CP
CP goodwill
CP
CP
Labor
CP
SP
Capitalization of past excess earnings: Foster (1974)
Formula: (Earnings (FMV Labor + Capital Return))/Capitalization Rate
Av Net Income for x Years (FMV of Labor + Capital Return) = Excess Earnings
Take PV by dividing capitalization rate (contested, but often 25-50%; high in CA)
Notes:
PV of future income stream developed during marriage
Capitalization usually yields highest post-separation income/goodwill income
Note that capital is long term and its decreases over time
Capitalization rate depends on risk of non-realization, anticipated life of stream
Goodwill usually sticks to person.
Alt. Goodwill Measurement: average last 5 years of earnings.
Factors: amount of patronage; personality of parties; length of time estabd; habit of
customers in patronizing; BUT, dont look at post-marital efforts
Greater riskhigher expected rate of return.
Community good will generates CP, even after divorce, until its distributed.
Mkt sales valuation; what jr partner would pay to buy practice: Fortier (1973)
Formula: Mkt price value of physical assets
Problems: jr partner might take care of undesirable customersmight not be accurate;
doesnt say what its worth in earners hands
More reasonable to see what comparable businesses would sell for.
Expect that business continues.
Returns will be post-sep comm. income bc you take out separate spouses labor.
Professional Education:
Similar to goodwill:
o Both are discounted PV of future earnings portion
o Both require labor
o Often, neither has value except in earners hands
o Death or retirementvalueless
o Both legally un-transferable in many states
Opp Costs for Supporter: 1) Salary/benefits from better job; 2) Loss potential of
increasing human capital.

Opp Costs for Spouse attaining degree: 1) Salary and benefits from seniority; 2) Direct
costs for tuition, books, etc. 3) Incremental money spent as a student (money would not
have spent if not student)
Is there a connection between Value and Cost?
o Some degrees are NOT economically productive.
o But, if you pay for something you expect return. Human capital should be the
same as physical capital. Should you then get back True Cost or Opportunity
Costs? (i.e. Restitution or all costs incurred?)
Is a Professional Degree Property?
o Must look at CONTEXT!
For purposes of Due Process, a degree may be considered property.
o Does it resemble other property?
o Does it fit into the Marital Property system?
Graham: No recognition at all. (doesnt likely speculation of future earningstaken to its
extreme this could reject any idea of marital property)
Mahoney (NJ): Dont recognize license as prop, but reimburse spousal contribution
OBrien (NY): recognize license, value is the enhanced earning capacity
CA (stingier version of Mahoney: ed not CP, but reimburse CP used to fund it
Sullivan (1984): 2641 reimbursing community contributions to education or training:
o Other spouse gets half (since its CP reimbursement)
Watt (1989): 2641 only reimburses direct ed expenses
o Only out of pocket expenses for tuition/books reimbursable.
o Opp costs, living expenses not included
o Provision for loan re-payment.
2641 notes:
Loans for ed are not comm. liabilities, assigned directly to educated party
CP Payment of loans for pre-marital ed is reimbursable
If community substantially benefitsno reimbursement:
Rebuttable Presumptions:
o Comm. hasnt sub. benefited if contributions made <10 yrs bf proceeding
o Comm has sub. Benefited if contributions made >10 yrs bf proceeding
o Quid pro quooffest by training for other party
o If sending spouse to school reduces need for support, no double benefit
Pensions:
Notes:
Often most important asset
Vested: when right to receive is created
Maturity: right to receive immediately
Brown: pensions are a contingent interest even where not vested
Reverses French which said divisible only where vested
Court addresses problems of death/being firedtake it out of payments
Gilmore: court can force payout at divorce if mature pension
Court recognizes mutual economic interest; dont let H screw W by not retiring

 Problem: disincentive to continue working

ERISA (1984)
Notes:
Only applies to private pensions
QDRO (qualified domestic relations order)employer pays to ex spouse so worker
doesnt have to retire to get pension
Time Rule (CA): ONLY when benefits are based on years worked:
(Yrs Contributed During Marriage / Total years Contributed) * PV of pension
Problems: post-sep yrs represent largest salary; cntr: reason for big salary is time during marriage
Poppe (navy guy): time rule doesnt apply where benefits not substlly related to yrs of service
Right to Reinstate: some ees can take cash settlement and if they return reinstate
Lucero (81): reins right is earned during marriagemust pay other spouse Overturns Forrest
Terminable Interest Doctrine: non-EE int ends at death of 1) non-EE (Benson)& 2) EE (Waite)
Superceded by 2610: court shall make whatever orders necessary to ensure each party
receives full CP interest in retirement plan (public or private) even after death
Policy for 2610: half-earned like any other CP;
Policy against 2610: goal is for retirement, to protect living participants; non EE cant
give during life, so why at death?; more expensive per person to live alone
Feminist initiative which prof doesnt like bc pensions should be for plan bennies only.
Boggs: revives TID; fed law preempts state law
ERISA Spendthrift-Provision: cant assign/alienate retirement benefits
U.S. Savings Bonds; Homestead Rule; SS all pre-empted
ERISA doesnt require insurance providers to go beyond 4 corners of the policy
Federal Preemption: federal laws supreme.
1) Spot the issue: If the following applies, apply federal law:
i. asset created by federal law (ie ERISA regulated private retirement plans;
other private benefit plans
ii. Or asset regulated by federal law: SS or Vet benefits;
2) You can predict preemption depending on type of court (states follow state law)
Other ERISA/Federal Pre-Emption notes:
Ee can stick most stock earnings for IRAs in ERISA plan instead of regular savings
account to minimize CP
ERISA-regulated ee group LI policy: payment of proceeds must accord with designation
of bennies (preempts CA law that says LI proceeds are CP if last premium paid by CP)
Armed Forces LI policy/Fed life Policesfollow benny provision, not CP law
Railway Workersworkers gets 100% pension benefits, preempts CP
U.S. Savings Bonds: when either co-owner dies, survivor takes sole ownership.
Military Disability benefits are SP (preempts Stenquist)
Kimble: (disregarded by 9th cir) if ee puts down benny other than spouse on ee LI policy thats
CPspouse cant assert CP interest in policy bc federal law preempts.

Other Wage Replacement Benefits:

Jones: char of DP determined by char of earnings its intended to replace
leg lost in Nam, disability pay after marriage is SP bc replaces wages
but dont worry about pain/suffering
Nature of disability is that you get current benefit; nature of retirement is no current
benefit (hypo that nobody pays for 1 year retirement policy)
Stenquist: army benefits that are mixed retirement/disability should be separated for distro
Look to amt he wouldve gotten for retirement, subtract what he gets for disability
Use time-rule
This is now controlled buy Manzell (SCOTUS) as applied to Army benefits
Stenquist says rethink Jones; value unvested retirement pensionSP disability-value of
unvested pension
Saslow: when disability doesnt replace pension bc spouse retired bf maturity, look to whether
pay functions essentially as retirement pay; if so treat as CP to extent earned during marriage
H bought disability policies w/CP; injured bf eligible for pension
When disability pays after normal retirement age, look to its function
Problem: what about guys who work until they die?
Wright (1983): Severance pay is SP if replaces future post-sep lost wages: ask when earned
H laid off w/severance. W & her H said theyd ruin his life
Former boss said hed have trouble getting another job.
W wants severance as CP. TC said SP bc its a question of what it replaces (future $)
Health Insurance: cts dont make ex pay for others med needs. No CP in exs med coverage.
Policy-holder & kids stay on policy but other spouse is deleted
COBRA requires sponros of ERISA insurance plans offer ees divorced spouse up to 36
mo individ health (not employers with less than 20 ees: CA extended to these guys)
CA also allows cost of HI to be included in spousal support, but courts dont usually
CP Distro at Death:
Dargie v. Patterson (1917) treat un-consented CP gifts as testamentary gifts (get back )
Spouse can fully rescind other spouses IV CP gift; At death, only 1/2; Item Theory
each spouse owns 50% of every asset (reject aggregation)
Notes:

Proceeds of CP funded life insurance treated in CA as CP, subject to Dargie rule.

Problem: Dargie doesnt allow spouse to aggregate, even if they want to.

Problem: survivor can take both under will and CP law; gets all their share +
gifts
Prager: presume T knew/intended to will away only their int in CP unless terms are clear
H left all RP (CP) outside LA to relatives; SP w/in LA to W. W wants AND the will
No clear statement he meant to give away more than his W doesnt have to elect
Focus on owned by me which is CP
Wolfe: even mistaken attempt to will away CP, believing it was SP requires election
rules of construction; We dont know Prager was mistaken, but we do know Wolfe was

Contract with WA which never forces election due to mistake

Note that property passing from one spouse to another can skip probate (HOW??)

Choice of Law at Death:

Generally
CA wants CA law to apply to its people at death/divorce bc it has welfare interest in them
2660if divorce ct cant satisfy CP interests in out-of-state RP for spouses domiciled in
CA by dividing CP/QCP, ct my exercises in personam for conveyance. Or award party $
value it wouldve received if prop were conveyed
CA RP owned by married couples domiciled out of CA is under 120: will admind in CA,
survivor has rt to assert elective share of state domiciled (CA doesnt have strong welfare
interest in non-domiciliaries
Prop acqd by out-of-states couples later in CAunder CA law
CP includes 760 property AND all personalty wherever situated & prop situated in CA
considered CP in the state where acquiring spouse was domiciled
QCP (think SP during life subject to CP distro):
CFC 125: RP/PP acqd by either sp domiciled elsewhere which wouldve been CP here
CPC 66: all PP wherever situated + RP situated in CA which wouldve been
During Marriage: QCP mgmt/control (gifts too) retained by sp who owned bf coming
here; creditors CAN reach
At Divorce: treated SAME AS CP
At Death (CPC 101): QCP rts in non-owner only if they are survivor;
o CPC 102 (restoration): allows illusory transfer to be restored to decedents
estate (where owner kept string attached)
o Illusory: w/o consideration; not to spouse; and 1) at death retained enjoyment or
income from property; or 2) power to revoke; 3) held by D and another RoS at
time of death. Doesnt apply to LI, accident insurance, joint annuity, pension
o Addresses Thornton Ps/Is problem by mimicking the CL elective share
120 golden rule: If person dies not domiciled in CA, leaves will disposing RP in CA
which is not CP, surviving spouse has election right of state of dying spouse
Management/Control of CP:
RP:
Equal mgmt/control, but joinder reqd for sale, gift, encumbrance
Presumption in favor of purchaser
o Burden on non-consenting spouse to demonstrate no consent to transfer
o SOL: non-consenter has 1 yr from record filing to void transaction
o Equitable rule: spouse must repay buyer; problemother spouse already spent it
PP:
Either spouse has abs power
Exception for Bank Accts in one spouses namecontrolled exclusively by that spouse
o This was written for banks so they can avoid spousal disputes; problem that
spouse cuts off others sps access depriving of equal mgmt
o Creditors still have access

o Add-a-name remedy: no mismgmt required (add name or change title)

Problems: how does the other spouse pay the retainer?; leads to fights
Business Exception: spouse operating business/interest in business that is mostly CP has
primary mgmt/control of PP and may act alone; but must give written notice to other sp
of all/substantially all PP used in business (theres no ability to void so its toothless)
Spouse cant sell motor home, furnishings, clothes of kids/other sp w/o written consent
o Sale can be voided w/o paying purchaser (welfare concern)
Gifts require joinder unless for fair/reasonable consideration
Spreckels: ratification = written consent non-donor spouse subsequent will acking
gift was ratification (ct couldve said his estate meant Hs transfer of his interest)
Fields v. Michael: unconsenting sp can recover from donees (mistresses) OR estate
Harris: (gift consent rigor): action may be brought after non-consenters death; W
mentally ill; H her guardian, GC gifts w/o consent/ct permission. Son got back 1/2
Bray: cant put CP into JT for son w/o consideration
o (fedl bonds subject to preemption);
o court couldve found JT a bonus incentive and found sons work consideration
o compare Bramer: (onerous v. lucrative) with Bray: gift if consideration
o Every time a charity gets a giftget sp to cosign; UCLA sends thank-yous to
both spouses so its like implied consent; another approach is providing
consideration in the form of plaques, etc

Fiduciary Duty: Refrain from grossly negligent, reckless conduct; dont squander; difficult test
bc lifestyle differ (expenses for enjoyment); Beltran draws line at illegal behavior; prof doesnt
like FDthinks its a problem for commerce; what about risky behavior
Creditors Rights:
Creditors rights NOT: 1) ct order of satisfaction; 2) spousal rt of reimb; 3) which spouse
gets assigned debts at divorce
UCC liability: all of persons property is liable for debts undertaken
In Rem liability: 4 Questions:
1) Whats the char of property trying to be reached; 2) Who incurred debt; 3) When did
debt arise; 4) Unusual type of debt (necessaries, child support, tort damages)?
Debtor himself always liable
SP not liable for debts contracted by other during before or during marriage except:
o Necessaries which depend on station/lifestyle (because of duty to support)
CP liable for debt of either spouse contracted bf/during marriage up to separation except:
o Pre-mar debt held in uncommingled bank account (toothless: once sp buys
somethingcan be attached; other spouse can ask court to add name
Termination of Marriage:
Permanent separation (no req for legal enforcement); often one party disputes
Bargary: separation requires intent to permanently separate and physical separation
Eye doctor w/young GF; W does laundry, attends socials; sex life doesnt matter to courts

Notes:
To give effect to separation, send them a letter saying its over;
To avoid effect respond with letter asking for reconciliation and marriage counseling
Problem: this encourages people to leave as soon as possible and NOT reconcile
Marital Status:
Lawful: legal capacity and legal requirements met (license, witness, ceremony)
Vargas: putative wife is entitled to split estate with real wife
Putative spouse: one who believes in GF that its good marriage; belief ends with knowledge;
requires formalities being met; insurance and pensions often only go to real wives
Quasi-Marital Property: marital property from putative spouse
CL Marriage: not in CA, but CP law can apply to couple her were CL married in another state
Requirements: habit (live as H/W); reputation (hold out to community as H/W)
Non-marital cohab:
Cary: status approach: look/act like a family, treat like family look to actions not intent
(overruled by Marvin); couple even filed joint returns; court looks to family code; factors
(children, reputation);
o Cary removes incentive not to marriage (now people with money dont want to
marry), but people dont know about it so its dangerous
Marvin says dont treat them under CP but under K law (just not for sex);
o rubric hasnt been used so Ls dont take cases and people are screwed; but has
been embraced by other states;
o infer K from facts of case; Behavior that undergirded finding to share equally: she
was homemaker and he was worker, so they assumed complimentary roles.
o Cary is dead in water. Marvins contractual rubric has been great disappointment
Non-marital cohab after Marvin: not many cases have followed Marvin K logic for
non-married cohabs, so its still very confusing.
Property Distro at Death
Ct cant usually divide SP
Robinson: divorce ct cannot carve out life estate for W from Hs SP family home
2650: at request of either party, ct can divide SP int held jointly w/o partition
Notes:
At death, item distro; at divorce 2601 allows 50/50 aggregate division if ec circs warrant
Caselaw: whenever nature of asset/circs make it appropriatect can aggregate
Henn: dormant assets (matured pension not mentioned in pleading) awaits distro; no estoppel
Problems: hes remarried, has kids, is relying on that asset; equitable distro states would
say court has jurisdiction to divide only at divorce proceeding
Notes:
Since Equal Mgmt courts became less solicitous of womencases saying all managing
spouse had to do at divorce was tell them existence/location of comm. asset.
Cant be faulted for mis-repping value bc thats a matter of opinion.
Womens groups lobbied for set aside legislation2122 grounds:

o Actual Fraud; Perjury; Duress; Mental Incapacity; Stipulated/uncontested

judgments if by mistake (law or fact); failure to disclose
Need to Read More:
Alexander: inequitable division not enough after SoL (here 6 months)
21 yr marriage where W says she wants nothing (depression?);
nice H who used do-it-yourself book;
set aside unlikely by sttt bc only grounds close is mental incapacity (high threshold)
Brockman: duress is sufficient ground for set-aside
custody battle so W will do a deal; current std is best interests of child
Robinson (1947): divorce ct jurisdiction is reserved to CP
No property division unless specifically requested in proceeding
Parties may join together to request SP distro
Hebbring : destroying other sps SP TC can reimburse from CP share
dont make taxpayers bear burden of separate civil action; short marriage/no kids
Equal Division Requirement: except PI recoveriesall CP/QCP 50/50 of each asset;
In-Kind Division: court can aggregate certain assets if substantially ED and circs warrant
Williams: H must acct for CP held immediately prior to divorce but lost by proceeding
Duty to Wcant obtain unfair adv; like a partner
Rossi: lottery winnings concealed during dissolution go to the non-breacher; breach of fid duties
Wagner: putative sp doesnt need show ceremony (subjective GF enough) for death share
Need only show 1) ceremony; or 2) belief reasonable (obj) or GF (subj) (depending on jurs)
Leslie (1984): surv putative sp can succed to decs SP share;
married in TJ together 9 years;
other cases say putative spouse doesnt take as surviving spouse
Schultz (1980): deliberate misappropriation maybe awarded to other party (same goes for debts)
if gross mishandling of comm; but H not grossly irresponsible for misdirected trial notice or
failing to hire L against creditor
Moore (1980): booze is valuable consideration, not a gift/mishandling
Beltran (1986): H must compensate for forfeited military pension for fondling 14 year old
Dont make W pay for Hs criminal conduct.
Somps: using SP for investments during marriage doesnt necessarily entitle CP share
Grolemund liability of prop for debt is coextensive w/debtors legal power to manage/control
Its like in rem: look to debtors relations to particular asset; purpose of debt doesnt matter
Quintana