Community Property Essay Outline
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- Issues that Effect All Assets
- 1. transmutation 2. Divorce 3. Death 4. Creditors 5. Invalid Marriage
- Transmutation
- may effect assets, discuss at outset
- Divorce
- at divorce community assets will be equally divided unless osme special situation require deviation from the equal division requirement
- Death
- 1. at death descedent leave all of his separate property and 1/2 of community property 2. Spouse entitled to descedents 1/2 of CP and SP as long as no issue
- Things to Analyze for Invalid Marriage
- 1. Age 2. Capacity 3. License 4. Ceremony 5. No Common Law Marriages 6. Contract Issues
- Special Classification Rules
- 1. PI awards 2. Retirement Benefits 3. Disability pay and workers COmp 4. Business and Professional Goodwill 5. Education 6. Life INsurance
- Personal injury Awards
- SP
- Retirement Benefits
- 1. CP if earned during course of marriage 2
- Rules to Determine CP v. SP in retirement benefits
- 1. Time Rule 2. Wait and See Rule (preferred)
- Disability pay and workers compensation Benefits
- treated like CP to the extent they replace wages/ treated like retirement benefits if taken in lieau of retirement
- Business and Professional Good Will
- CP if earned during marriage
- Education and Training
- Not CP but supportin spouse may be entitled to maintenance award
- Life Insurance
- CP to the extent CP paid the premiums, use the proration rule 1. If suriving spouse if not named beneficiary then 1/2 of CP of award goes to spouse
- Issues for Proeprty Acquired with Community and Separate Funds
- 1. Pay Off 2. Improvements
- Pay Off
- when property is acquired with community and separate funds, the community and separate property interest are determined by apportioning their respective contributions USE MALMQUIST FORMULA
- Malmquist Formula
- when CP and SP are used to pay off a mortgage.... 1. Community is entitled to reimbursement 2. Plus Pro rata share in appreciation 3. Start by figuring out share of contribution
- Improvements between CP and SP
- when CP is used to improve the SP of a spouse or vice versa the CP is either entitled to 1. The appreciation in value due to the improvement OR 2. The amount of the improvement if value is hard to define
- 3 Actions by Spouses that Can Alter Character of the Property
- 1. Antenuptial Agreements 2. Transmutations 3. Property Held in Joint Tenancy
- Antenuptial Agreements
- enforceable but must be in writing
- Transmutations
- Agreement between spouse to change the character of the property, apply contract principles
- Community Labor enhancing the value of SP business
- when community labor is used to enhance the value of a SP business, community is entitled to share in the increase value of the SP business
- 2 Different Formulas to Calculate CP share in business
- 1. Pereira- use in most scenarios 2. Van Camp- use if someone has a special skill of some kind
- Pereira Formula
- 1. Rate of Return 2. Method of accounting when the increase in value of SP business is primary the result of community labor 3. Determine the value of the SP then give a fair rate of return (5%) calculated annualy. SP= initial value plus fair rate of return CP= everything else
- Van Camp Formula
- 1. Value of Community Service 2. Value of Business is primarily the result of the unique nature of the SP asset 3. Determine what a fair salary would be for the community labor and multiple that by years in marriage/ subtract any salary already receive and community expenses=CP share of business/ rest is SP
- Distribution at Divorce- Basic Rule
- divide each of the community assets in a reasonably equal manner
- Deviation from Equal Distribution Rule
- can be done in following circumstances 1. Misappropriation 2. Liabilities Exceed Assets 3. Education Debts get assigned to the spouse who receive the education 4. tort liabilities assigned to spouse who incured liability 5. Family Home can be given to person whom has custody
- Distribution at Death with Will
- Can dispose of their 1/2 of community property and all SP Unauthroized gifts of CP entitle spouse to get back 1/2 of that gift
- Distribution at Death without Will
- Suriving Spouse Gets Everything
- Management and Control of CP During Marriage
- 1. Spouses have equal management and control 2. Gifts of CP require the written consent of non-donor spouse 3. Exceptions: Real Property
- Preemption Generally
- Under the Supremecy Clause, Federal Law preempt inconsisten state laws. In some instances Federal law preempts Nevada from applying CP concepts to certain assets
- PReempted
- 1. Homestead Claims 2. Military Life Insurance Benefits 3. US Savings Bonds 4. Social Security Benefits
- Not Preempted
- 1. Railroad retirement benefits 2. Military Retirement Benefits 3. Copyrights