Community Property – Class Outline (Hickman)

I. Development of the California Community Property System

a. The Meaning of Marriage
i. Marriage is not like a regular contract. It is a social relation like that of parent
and child, the obligations of which arise not from the consent of concurring
minds, but are the creation of the law itself. It is subject to extensive
government regulation. For these reasons, the rights of the parties in a marriage
are not based on their contractual agreement but depend on the law of the state.
Maynard v. Hill (1888) – page 4.

b. Three Underlying Principles of the California Community Property System

i. The Tracing Principle
1. Community Property Defined – Family Code § 760
a. Except as otherwise provided by statute, all property, real or
personal, wherever situated, acquired by a married person
during the marriage while domiciled in this state is community
property.

2. Separate Property of Married Person - § 770

a. Separate property of a married person includes all of the
following:
i. All property owned by the person before marriage.
ii. All property acquired by the person after marriage by
gift, bequest, devise, or descent.
iii. The rents, issues, and profits of the property described
in this section.
iv. A married person may, without the consent of the
person’s spouse, convey the person’s separate property.

3. Earnings and Accumulations During Separation - § 771

a. The earnings and accumulations of a spouse and the minor
children living with, or in the custody of the spouse, while
living separate and apart from the other spouse, are the separate
property of the spouse.

4. Earnings or Accumulations After Entry of Judgment of Legal

Separation - § 772.
a. After entry of a judgment of legal separation of the parties, the
earnings or accumulations of each party are the separate
property of the party acquiring the earnings or accumulations.

5. The fruits of separate property are traced to the source and classified
accordingly. The creditor of the husband cannot subject the proceeds or
dividends of the separate property of the wife to his claim. George v.
Ransom (1860) – page 20.

ii. The Equality Principle

1. Community Property; interests of parties - § 751

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 a. The respective interests of the husband and wife in community
property during continuance of the marriage relation are
present, existing, and equal interests.

2. The legislature has not clearly stated any purpose to create a vested
interest in community property in the wife. The husband has
discretionary powers relating to matters affecting the community
property and the wife could only obtain such powers upon death of the
husband or divorce.
3. During the marriage, the wife’s interests are protected against fraud and
mismanagement. Stewart v. Stewart (1926) – page 24.

iii. The Principle of Contractual Modification

1. Premarital Agreements
a. The parties have the ability to determine how their property will
be classified. They may transmute separate property into
community property by agreement.

b. The Uniform Premarital Agreement Act - § 1600

i. Governs agreements between prospective spouses made
in contemplation of marriage and to be effective upon
marriage.
ii. It applies to any agreement executed on or after January
1, 1986.
iii. With certain limited exceptions, the

2. Policy Limitations on the Ability to Modify Around the Community

Property System.
a. Antinuptial agreements that encourage divorce are
unenforceable on the grounds that they are contrary to public
policy.
i. In Re Marriage of Noghrey (1985) – page 36.

b. Fiduciary Relationship - § 721

i. A husband and wife are subject to the general rules
governing fiduciary relationships which control the
actions of persons occupying confidential relations with
each other. This confidential relationship is a fiduciary
relationship subject to the same rights and duties of
nonmarital business partners, including the following:
1. Providing each spouse access at all times to any
books kept regarding a transaction for the
purposes of inspection and copying.
2. Rendering upon request, true and full
information of all things affecting any
transaction which concerns the community
property. Nothing in this section is intended to
impose a duty for either spouse to keep detailed
books and records of community property
transactions.

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 3. Accounting to the spouse, and holding as a
trustee, any benefit or profit derived from any
transaction by one spouse without the consent
of the other spouse which concerns the
community property.

c. No Fiduciary Duties Are Owed to One Another At the Time of

a Premarital Agreement. Premarital agreements, where the
less sophisticated party does not have independent counsel and
has not waived counsel, should not be subject to strict scrutiny
for voluntariness because the parties were not in a fiduciary
relationship to one another. Marriage of Bonds (2000) – page
41.

d. Unenforceable Agreements - § 1615 (Reaction to Bonds)

i. A premarital agreement is not enforceable if the party
against whom enforcement is sought proves either of
the following:
1. Involuntariness. That party did not execute the
agreement voluntarily.
2. Unconscionability. The agreement was
unconscionable when it was executed and,
before execution of the agreement, all of the
following applied to that party:
a. Was not provided a fair, reasonable,
and full disclosure of the property or
financial obligations of the other party.
b. Did not voluntarily and expressly
waive, in writing, any right to
disclosure of the above.
c. Did not have, or reasonably could not
have had, an adequate knowledge of
the property or financial obligations of
the other party.

ii. It shall be deemed that a premarital agreement was not

executed voluntarily unless the court finds in writing or
on the record all of the following:
1. The party against whom enforcement is
sought was represented by independent legal
counsel at the time of signing the agreement or,
after being advised to seek independent legal
counsel, expressly waived, in a separate
writing, representation by independent legal
counsel.
2. The party against whom enforcement is sought
had not less than seven calendar days between
the time that party was first presented with the
agreement and advised to seek independent

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 legal counsel and the time the agreement was
signed.
3. The party against whom enforcement is sought,
if unrepresented by legal counsel, was fully
informed of the terms and basic effect of the
agreement as well as the rights and obligations
he or she was giving up by signing the
agreement, and was proficient in the language
in which the explanation of the party's rights
was conducted and in which the agreement was
written. The explanation of the rights and
obligations relinquished shall be memorialized
in writing and delivered to the party prior to
signing the agreement. The unrepresented party
shall, on or before the signing of the premarital
agreement, execute a document declaring that
he or she received the information required by
this paragraph and indicating who provided that
information.
4. The agreement and the writings executed
pursuant to paragraphs (1) and (3) were not
executed under duress, fraud, or undue
influence, and the parties did not lack capacity
to enter into the agreement.
5. Any other factors the court deems relevant.

iv. Formalities
1. A writing effecting a transmutation of property must contain on its face
a clear and unambiguous expression of intent to transfer an interest in
the property, independent of extrinsic evidence. Estate of Bibb (2001) –
page 55.

2. The general rule is that a transmutation of property is not valid unless

made in writing by an express declaration made by the spouse whose
interest in the property is adversely affected. However, there is an
exception for jewelry that is not substantial in value. Marriage of
Steinberger (2001) – page 64.

a. § 852(c)  there is an exception for jewelry that is not

substantial in value

v. Hickman’s Transmutation Analysis – 4 steps.

1. Scrutinize Family Code § 852 (Validity of Transmutations)
a. A Type of Statute of Frauds. A transmutation of real or
personal property is not valid unless made in writing by an
express declaration that is made, joined in, consented to, or
accepted by the spouse whose interest in the property is
adversely affected.
b. This section does not apply to a gift between the spouses of
clothing, wearing apparel, jewelry, or other tangible articles of a

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 personal nature that is used solely or principally by the spouse
whom the gift is made and that is not substantial in value
taking into account the circumstances of the marriage.
c. This section does not apply to or affect transmutations made
before January 1, 1985.
2. No extrinsic evidence.
3. Use MacDonald Language
a. In addition to the language requirement of § 852, there must be
language that shows that the person knows that they are
changing the character of the property.
4. Did anyone gain an advantage from the transmutation?
a. Yes – then there is a presumption of undue influence per
Haines. This is difficult to overcome.
i. It must be shown that the transmutation was free and
voluntary, with full knowledge and that the person
completely understood its effect.

II. The Classification of Property as Community or Separate

a. Significance
b. Presumptions
i. The General Presumption. Property acquired during marriage is community
property.

ii. When Property is Acquired is a Question of Fact. When a litigant attempts to

rebut the presumption that property is community property, the burden of proof
is on the person asserting that the property is separate property.
iii. The burden of proof to overcome a presumption is a preponderance of the
evidence.
1. Wilson v. Wilson (1946) – page 71.

iv. Circumstantially, the Court May Conclude That the Property Must Have
Been Purchased with Community Funds. When there is no evidence of the
character of property, it may be presumed to be community property if in
possession of one of the spouses at the close of a long marriage. Estate of Jolly
(1925) – page 73.

v. Rebuttal of the General Presumption by Tracing

1. Rebuttal By “Clear and Satisfactory” Evidence. Although possession
of property by husband and wife is presumed to be community property,
this presumption can be overcome by showing evidence sufficient for a
reasonable person, considering all circumstances, to believe that the
property was separate in character.
a. Freese v. Hibernia Savings & Loan Society (1903) – page 77.

2. Separate property of married person - § 770

a. All property owned by the person before marriage.
b. All property acquired by the person after marriage by gift,
bequest, devise, or descent.
c. The fruit of separate property.

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 3. Earnings During Separation - § 771
a. The earnings and accumulations of a spouse and the minor
children living with, or in the custody of the spouse, while
living separate and apart from the other spouse, are the separate
property of the spouse.

vi. Property acquired by compromise is separate property if the right

compromised was separate property. Where a right to contest a will vests prior
to marriage, property received in compromise of that right is separate in
character.
1. Estate of Clark (1928) – page 82.

vii. Earnings of property attributable to or acquired as a result of labor, skill, and

effort of a spouse during marriage are community property. Although gifts
are generally construed as separate property, if the gift at issue is given as a
remuneratory recognition of skill and labor performed during marriage, then it is
community property.
1. Downer v. Bramet (1984) – page 85.

viii. Date of Separation. The date of separation occurs when either of the parties
does not intend to resume the marriage and his or her actions “bespeak the
finality of the marital relationship.” Legal separation requires intent by one of
the parties to end the marital relationship and conduct evincing such intent. All
factors bearing on a party’s intent should be considered by the courts. In Re
Marriage of Hardin (1995) – page 88.
1. There can only be one Date of Separation (DOS). Thus, the married
couple that technically separates for awhile, then gets back together, and
then separates for good… there is only one DOS.

c. Special Presumptions Based on the Form of Title

i. Acquisitions by a Married Woman
1. Property Acquired by a Married Woman Before January 1, 1975
a. Notwithstanding any other provision of this part, whenever any
real or personal property, or any interest therein or
encumbrance thereon, was acquired before January 1, 1975, by
a married woman by an instrument in writing, the following
presumptions apply, and are conclusive in favor of any person
dealing in good faith and for a valuable consideration with the
married woman or her legal representatives or successors in
interest, regardless of any change in her marital status after
acquisition of the property:
i. If acquired by the married woman, the presumption is
that the property is the married woman's separate
property.
ii. If acquired by the married woman and any other person,
the presumption is that the married woman takes the
part acquired by her as tenant in common, unless a
different intention is expressed in the instrument.
iii. If acquired by husband and wife by an instrument in
which they are described as husband and wife, the

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 presumption is that the property is the community
property of the husband and wife, unless a different
intention is expressed in the instrument.

2. Although § 803 creates a presumption that property transferred to a

married woman is separate in character, this is a presumption that can
be rebutted.
3. A spouse’s intent is critical in determining whether a transaction
changed the character of property from community to separate property.
It is prejudicial error to exclude such evidence. Horsman v. Maden
(1941) – page 96.

ii. The Separate Property Presumption. Property acquired by a married woman

by written instrument prior to 1975 is presumed to be her separate property.
However, this presumption may be rebutted by the husband on a showing of
clear and convincing evidence.
1. In Re Marriage of Ashodian (1979) – page 99.

d. Concurrent Estates
i. Methods of Holding Property - § 750
1. A husband and wife may hold property as joint tenants or tenants in
common, or as community property, or as community property with a
right of survivorship.

ii. Owner of Legal Title is Owner of Beneficial Title – Evidence Code § 662.
1. The owner of the legal title to property is presumed to be the owner of
the full beneficial title. This presumption may be rebutted only by clear
and convincing proof.

iii. The Presumption According to Deed. There is a presumption that property is

held as described in the deed, but this may be overcome by showing that an
agreement was made to the contrary. However, it isn’t enough to show the
hidden intent of one spouse, undisclosed to the other spouse at the time of
conveyance.
iv. The § 803 presumption only relates to dissolutions and legal separations, not
deaths. Estate of Levine (1981) – page 108.

v. When Spouses Take Title In Joint and Equal Form But Contribute
Disproportionately to the Purchase Price
1. The Lucas Gift Presumption. Because the act of taking title in joint
and equal form is inconsistent with the claim that a separate interest is
preserved, the court will presume that a gift has been made to the
community unless there is an agreement or understanding between the
parties that the contributing spouse would maintain a separate property
interest. The presumption cannot be rebutted by mere tracing.
a. In Re Marriage of Lucas (1980) – page 112.

2. At Divorce of Legal Separation, Property Held in Joint Form is

Presumed to be Community Property - § 2581

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 a. The presumption may be rebutted by either of the following:
i. A clear statement in the deed or other documentary
evidence of title by which the property is acquired that
the property is separate property and not community
property.
ii. Proof that the parties have made a written agreement
that the property is separate property.

b. The Lucas Gift Presumption still controls when the marriage

ends in death.

3. Separate Property Contributions to Property Acquisition - § 2640

(overturns Lucas)
a. Contributions to the acquisition of the property are reimbursed
to the separate property contributor without interest or
appreciation.
i. Applies to Improvements. This applies when separate
property is used to improve community property.
b. In the division of the community estate under this division,
unless a party has made a written waiver of the right to
reimbursement or has signed a writing that has the effect of a
waiver, the party shall be reimbursed for the party's
contributions to the acquisition of property of the community
property estate to the extent the party traces the contributions
to a separate property source.
c. Important NOTE: Even if a person performs a transmutation
removing her name from ownership of the property (changing
the property from her separate property to his separate
property), § 2640 still allows her to get her contribution back
i. Thus, even in a valid transmutation, separate property
interests remain inside the property under § 2640

III. Limitations on the Classification Process

a. Types of Property Within the System
i. The Value of An Education is Not Within the System. Education is an
intangible property right that cannot be classified as community property, even
if purchased with community funds. However, the value of a law practice at the
time of dissolution, which was established as a result of such education, is
community property.
1. Todd v. Todd (1969) – page 122.

2. Community Contributions to Education or Training - § 2641

(Reaction to Todd)
a. Reimbursement
i. Upon dissolution the community shall be reimbursed
for community contributions to education or training

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 of a party that substantially enhances the earning
capacity of the party.

b. Loan Assignment.
i. A loan incurred during marriage for the education or
training of a party shall not be included among the
liabilities of the community for the purpose of division
pursuant to this division but shall be assigned for
payment by the party that received the education or
training.
1. There is a rebuttable presumption that the
community has substantially benefited from
community contributions to the education or
training made more than 10 years before the
commencement of the proceeding.
ii. The education or training received by the party is offset
by the education or training received by the other party
for which community contributions have been made.
iii. The education or training enables the party receiving
the education or training to engage in gainful
employment that substantially reduces the need of the
party for support that would otherwise be required.

c. Reimbursement for community contributions and assignment

of loans pursuant to this section is the exclusive remedy of the
community or a party for the education or training and any
resulting enhancement of the earning capacity of a party.
However, nothing in this subdivision limits consideration of the
effect of the education, training, or enhancement, or the amount
reimbursed pursuant to this section, on the circumstances of the
parties for the purpose of an order for support pursuant to
Section 4320.

d. This section is subject to an express written agreement of the

parties to the contrary.

ii. Spousal Support

1. The Fourteen Factors to Consider in Determining Spousal Support - §
4320.
a. The extent to which the earning capacity of each party is
sufficient to maintain the standard of living established during
the marriage, taking into account all of the following:
i. The marketable skills of the supported party; the job
market for those skills; the time and expenses required
for the supported party to acquire the appropriate
education or training to develop those skills; and the
possible need for retraining or education to acquire
other, more marketable skills or employment.
ii. The extent to which the supported party's present or
future earning capacity is impaired by periods of

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 unemployment that were incurred during the marriage
to permit the supported party to devote time to domestic
duties.
b. The extent to which the supported party contributed to the
attainment of an education, training, a career position, or a
license by the supporting party.
c. The ability of the supporting party to pay spousal support,
taking into account the supporting party's earning capacity,
earned and unearned income, assets, and standard of living.
d. The needs of each party based on the standard of living
established during the marriage.
e. The obligations and assets, including the separate property, of
each party.
f. The duration of the marriage.
g. The ability of the supported party to engage in gainful
employment without unduly interfering with the interests of
dependent children in the custody of the party.
h. The age and health of the parties.
i. Documented evidence of any history of domestic violence, as
defined in Section 6211, between the parties, including, but not
limited to, consideration of emotional distress resulting from
domestic violence perpetrated against the supported party by
the supporting party, and consideration of any history of
violence against the supporting party by the supported party.
j. The immediate and specific tax consequences to each party.
k. The balance of the hardships to each party.
l. The goal that the supported party shall be self-supporting within
a reasonable period of time. Except in the case of a marriage of
long duration as described in Section 4336, a "reasonable period
of time" for purposes of this section generally shall be one-half
the length of the marriage. However, nothing in this section is
intended to limit the court's discretion to order support for a
greater or lesser length of time, based on any of the other
factors listed in this section, Section 4336, and the
circumstances of the parties.
m. The criminal conviction of an abusive spouse shall be
considered in making a reduction or elimination of a spousal
support award in accordance with Section 4325.
n. Any other factors the court determines are just and equitable.

2. When awarding spousal support, a court must consider the totality of

one spouse’s contribution to the other spouse’s attainment of a degree,
including contributions for ordinary living expenses. In Re Marriage of
Watt (1989) – page 130.

iii. Goodwill May Be Deemed A Community Asset. When a business started

before marriage builds value during the marriage, the value of the business at
the time of dissolution is community property. In determining whether or not
goodwill exists, the expectancy of future earnings is a mere factor to consider.
1. The Excess Earnings Approach.

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 a. In Re Marriage of Lopez (1974) – page 137.
i. There is no real definition for Goodwill: “It has been
aptly stated: ‘Accountants, writers on accounting,
economists, engineers, and courts, have all tried their
hands at defining goodwill, at discussing its nature, and
at proposing means of valuing it. The most striking
characteristic of this immense amount of writing is the
number and variety of disagreements reached.’” ~ In re
Marriage of Lopez
2. Personal Goodwill is too inaccurate to determine to consider a
community property asset.
a. Ex. A director becomes a star director from a small film, then
gets divorced. His future earnings would be huge, but you
cannot determine what his personal goodwill will be
determined.

iv. An employment-related term life insurance policy is not a community property

asset after expiration of the term acquired with community funds/efforts.
Further, the right to renew the policy without proof of medical eligibility is not a
property right because it is a mere expectancy, something that is not enforceable
as a right. In Re Marriage of Spengler (1992) – page 146.

b. The Valid Marriage Requirement

i. Same Sex Unions
1. There are no same sex marriages in California.
.
2. The Domestic Partnership Act – Family Code § 297
a. They are treated as spouses for practical purposes.
b. Requirements
i. Share a common residence
ii. Both agree to be jointly responsible for each other’s
basic living expenses incurred during the domestic
partnership.
iii. Neither person is married or a member of another
domestic partnership.
iv. The two persons are not related by blood in a way that
would prevent them from being married to each other in
this state.
v. Both persons are at least 18 years of age.
vi. Either
1. Both persons are members of the same sex.
2. One or both of the persons meet the eligibility
criteria under Title II of the Social Security Act
for old age benefits.
vii. Both are capable of consenting to the domestic
partnership.

ii. Putative Marriages

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1. A putative spouse is not legally married but has a good faith belief that
she is lawfully married. Once she learns that her marriage is invalid,
she is no longer a putative spouse.
2. A putative spouse has almost the same property rights as the lawful
spouse. All property that would have been community property or
quasi-community property if the marriage had been lawful is treated
as “quasi-marital property”.

3. The putative spouse has the same rights in quasi-marital property that
she would have in community property or quasi-community property.
§ 2251.

4. There is no such thing as a common law marriage in California.

5. Order for Support of Putative Spouse - § 2254

a. The court may, during the pendency of a proceeding for nullity
of marriage or upon judgment of nullity of marriage, order a
party to pay for the support of the other party in the same
manner as if the marriage had not been void or voidable if the
party for whose benefit the order is made is found to be a
putative spouse.

6. The Equitable Community Doctrine. Although there is no community

property where there is no valid marriage, if a spouse believed in good
faith that the marriage was valid, the courts may divide property
according to equitable principles.
7. Putative Spouse Gets Half of QMP At Annulment. Upon annulment,
property, even though it is no longer community, should be divided as
community property would have been upon a dissolution of the
marriage by divorce or death.
a. Coats v. Coats (1911) – page 161.

b. 6 Causes for Annulment - § 2210

i. A marriage is voidable and may be adjudged a nullity
if any of the following conditions existed at the time of
the marriage:
1. The party who commences the proceeding or
on whose behalf the proceeding is commenced
was without the capability of consenting to the
marriage as provided in Section 301 or 302,
unless, after attaining the age of consent, the
party for any time freely cohabited with the
other as husband and wife.
2. The husband or wife of either party was living
but either missing for 5 years or generally
believed to be dead.
3. Either party was of unsound mind.
4. The consent of either party was obtained by
fraud.

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 5. The consent of either party was obtained by
force.
6. Either party was, at the time of marriage,
physically incapable of entering into the
marriage state, and that incapacity continues,
and appears to be incurable.

8. Upon Death of Spouse, Surviving Putative Spouse Has Same Intestate

Rights in Quasi-Marital Property As She Would in Community
Property. Denying a putative spouse the status of a surviving spouse
for the purposes of succeeding to a share of the decedent’s separate
property would lead to anomalous and unjust results.
a. Estate of Leslie (1984) – page 165.

9. Equity Controls Division As Between Putative Spouse and Lawful

Spouse. In the case of a void or voidable marriage, as between a
putative spouse and the legal spouse, or as between the putative spouse
and the heirs of his or her decedent spouse other than the legal spouse,
the putative spouse is entitled to share in the property accumulated by
the partners during their void marriage. It shall be divided equally
between the parties.
a. Estate of Hafner (1986) – page 172.

iii. Unmarried Cohabitants

1. Unmarried cohabitants are people who live together in a marriage-like
relationship, but who are not lawful spouses or putative spouses.

2. The Community Property System Does Not Apply To Unmarried

Cohabitants. Where a live-in girlfriend has no good faith belief that she
is part of a valid marriage, she is not entitled to inherit an interest in
property merely as a result of her cohabitation. Vallera v. Vallera
(1943) – page 187.

3. Contracts Between Nonmarital Partners Are Enforceable Unless

Founded on the Consideration of Meretricious Sexual Services. In the
absence of an express contract, the courts should inquire into the
conduct of the parties to determine whether that conduct demonstrates
an implied contract or tacit understanding between the parties. Marvin
v. Marvin (1976) – page 189.

c. The Domicile Requirement

i. Marital property rights are controlled by the law of the domicile of the
married persons at the time of the acquisition of wealth. Property acquired
while domiciled in California as the result of a spouse’s work, efforts, ability,
and skills is community property. Rozan v. Rozan (1957) – page 207.

ii. The general rule is that questions relating to interests in real property are
determined by the law where the property is located. However, this rule doesn’t
apply where the funds used to purchase the property were acquired by spouses

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 while domiciled in another state. Grappo v. Coventry Financial Corp. (1991) –
page 210.

iii. Quasi-Community Property

1. Quasi-community property is property acquired by either spouse that
would have been community property had the spouse been domiciled in
California at the time of acquisition.
2. At divorce, quasi-community property is treated exactly as though it
were community property.

d. Constitutional Limitations
i. Due Process and Privileges and Immunities Clauses
1. Quasi Community Property – § 125
a. Property acquired by either spouse while domiciled elsewhere
which would have been community property if the spouse who
acquired the property had been domiciled in this state at the
time of its acquisition.
b. Property acquired in exchange for real or personal property,
wherever situated, which would have been community property
if the spouse who acquired the property so exchanged had been
domiciled in this state at the time of its acquisition.

2. Quasi Community Property – Probate Code § 101

a. Upon the death of a married person domiciled in this state, one-
half of the decedent’s quasi-community property belongs to the
surviving spouse and the other half belongs to the decedent.

3. Quasi community property legislation does not violate the due process
clause or the privileges and immunities clauses. The concept of quasi-
community property, which is applicable only if a divorce or separate
maintenance action is filed after the parties have become domiciled in
California, does not abridge privileges and immunities of national
citizenship because valid independent reasons bearing a close relation to
the resultant discrimination exist in its support. Addison v. Addison
(1965) – page 215.

4. Addison held that the quasi-community property statute could be

applied without violating the constitution to cases if two criteria were
satisfied. First, both parties have changed their domicile to California.
Second, subsequent to the change of domicile the spouses sought in a
California court legal alteration of their marital status.
a. In Re Marriage of Roesch (1978) – page 221.

ii. Retroactivity Problems

1. Vested Property Rights May Be Impaired By Retroactive Legislation.
Although there is a general presumption that statutes are not to be
applied retroactively, this presumption can be rebutted by evidence of
legislative intent.
a. In Re Marriage of Bouquet (1976) – page 224.

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 2. Reimbursing a husband for a separate property contribution made in
1976 to property divided as community property in 1992 would violate
the wife’s due process rights. In Re Marriage of Heikes (1995) – page
229.

iii. The Supremacy Clause and Federal Preemption.

1. An Act of Congress that permits an insured to designate the beneficiary
of an insurance policy preempts any claim that the proceeds of such a
policy are community funds. Wissner v. Wissner (1950) – page 241.

2. ERISA pre-empts state law where it interferes with the right of a

surviving spouse to receive benefits of her deceased spouse’s annuity.
a. Boggs v. Boggs (1997) – page 248.

IV. Selected Problems in Classification

a. Commingled Funds
i. Property acquired by purchase during a marriage is presumed to be community
property. The spouse asserting that it is his separate property may overcome
this presumption by showing evidence that community expenses exceeded
community income at the time of acquisition. See v. See (1966) – page 261.

ii. There are two methods of tracing:

1. Direct Tracing.
a. The separate property proponent must show that separate
property funds were in the account and that he intended to use
those funds to acquire the property in question.
i. Duty to Keep Adequate Financial Records. The
proponent must show that the funds were used to
acquire the property…not merely that adequate funds
existed.
1. Marriage of Frick
.

2. Indirect Tracing.
a. If at the time of acquisition, all community property income
was exhausted by family expenses, then the property must have
been purchased with separate property funds.

iii. If funds used for acquisitions during marriage cannot otherwise be traced to
their source and the husband who has commingled property is unable to
establish that there was a deficit in the community accounts when the assets
were purchased, the presumption controls that property acquired by purchase
during marriage is community property.
1. In re Marriage of Mix (1975) – page 265.
a. In this case, Esther sufficiently traced and identified the source
and funds of her separate property.

iv. Where funds are paid from a commingled account, the presumption is that
the funds are community funds. The exact amount of money allocable to
separate property and the exact amount of money allocable to community

15
 property must be ascertained before it can be said the money allocable to
separate property is not so commingled that all funds in the account are
community property.
v. The Credibility Test (fn. 5).
1. In re Marriage of Frick (1986) – page 268.
a. In this case, Jerome failed to sufficiently trace the payments to
his separate property. He failed the credibility test.

b. When Community Funds or Labor Increase the Value of Separate Property:

Apportioning Business Profits
i. The Pereira Test (favors community property)
1. This is used when the spouse’s management was the primary cause of
the growth of the business.

2. The separate property portion of the business is equal to the initial

separate property capital contribution plus a reasonable rate of
return. The remainder is community property. Pereira v. Pereira
(1909) – page 273.

3. Example:
a. A separate capital contribution of $100,000 and a 10% rate of
return for 10 years. The separate property portion of the
business is $200,000 and the remainder is community property.

ii. The Van Camp Test (favors separate property).

1. This is used when the manager’s labor was ordinary and the character of
the separate business is responsible for its growth.

2. The community portion of the business is equal to the value of the

manager’s services at market salary rate subtracted by the amount of
family expenses that were paid from such earnings. The rest of the
business is separate property.

3. Example:
a. H owns business before marriage worth $100,000 with a salary
of $30,000. He divorces 10 years later and the business is
worth $400,000. There are $20,000 of family expenses. The
community portion is $100,000 ($300,000 - $200,000) and the
remainder (of growth and value at marriage) is separate
property.

iii. The mere incorporation of a business does not change its character. § 2640
does not apply to separate property businesses and is inherently not applicable
to businesses.
1. Marriage of Koester (1999) – page 275.

iv. The Court is Free to Choose Either Approach In Order To Achieve

Substantial Justice Between the Parties. Two approaches are available to a
court for the allocation of earnings from a separate property business between
separate and community property:

16
 1. Compute interest on the capital investment in such business and allocate
that amount to separate property (Pereira) or
2. Compute the reasonable value of the spouse’s services to his separate
property and allocate that amount to community property, and the court
is free to choose whichever formula will achieve substantial justice
between the parties.
a. Tassi v. Tassi (1958) – page 281.

v. Reverse Pereira/Van Camp

1. If a community business increases in value after the date of separation,
the courts use the reverse Pereira/Van Camp test. If the increase is
attributed to the spouse’s efforts during separation, then the increase in
value is separate property. If the increase is attributed to other factors,
then the increase in value is considered community property.
a. In re Marriage of Imperato (1975) – page 285.

c. When Community Funds or Labor Increase the Value of Separate Property:

Community Payments that Pay Off Purchase Price of Separate Property
i. Where community contributions are made to separate property, the community
establishes a proportional ownership interest to the extent that the mortgage
payments reduce the principal debt. Thus, the numerator is the amount of
principal debt reduction and the denominator is the purchase price of the home.
1. Payments for taxes and insurance are excluded.
2. In Re Marriage of Moore (1980) – page 306.
a. Cf. Marsden.

ii. The community and separate property’s respective interest should be based on
the ratio of capital contribution to purchase price of property acquired before
and during marriage. In Re Marriage of Frick (1986) – page 310.

iii. A Party May Trace Their Separate Property Through Successive Purchases.
A party’s entitlement to a separate property contribution reimbursement is not
limited to the original community property to which the contribution was made
and, when that original property is refinanced and the proceeds used in part to
purchase or pay down the indebtedness on the original and other assets, the
contributing spouse can trace the contribution to, and be reimbursed from, those
assets. Marriage of Walrath (1998) – page 314.

d. Acquisitions in Installment Transactions

i. Where a spouse purchases property before marriage with separate funds, but
then pays the balance with community funds, it is deemed to be community
property in the proportion that the purchase price is contributed by the
community. Vieux v. Vieux (1926) – page 291.

e. Credit Acquisitions
i. Property Acquired on Credit During Marriage is Presumed to Be Community
Property. There is a rebuttable presumption that property acquired on credit
during marriage is community property. To overcome this presumption, it is
necessary to use the intent of the lender test, and adduce evidence that the sale

17
 or loan was granted solely on the basis of the spouse’s separate property and
credit.
1. Gudelj v. Gudelj (1953) – page 295.

ii. Loan proceeds acquired during marriage are presumptively community

property; however, this presumption may be overcome by showing the lender
intended to rely solely on a spouse’s separate property and did in fact do so.
1. In Re Marriage of Grinus (1985) – page 299.

f. Improvements
i. Separate Property to Improve Other Spouse’s Separate Property – Gift
Presumption
1. When one spouse uses separate property funds to improve the other
spouse’s separate property, that contribution is presumed to be a gift.

ii. Community Property to Improve Own Separate Property – No Gift

1. When one spouse uses community assets to improve his own separate
property, the other spouse is entitled to a reimbursement unless she
consented to the improvement.

iii. Community Property to Improve Other Spouse’s Separate Property – Gift

Presumption
1. When one spouse uses community assets to improve the other spouse’s
separate property, the contribution is presumed to be a gift unless there
is an agreement to reimburse. However, more recently cases such as
Marriage of Wolfe indicate that the community is entitled to a
reimbursement under these circumstances.

g. Personal Injury Causes of Action/Damage Awards

i. Community Property If Action Arose During Marriage - § 780

ii. Separate Property If Action Arises After Separation - § 781

iii. At Divorce, Award Assigned to Injured Spouse - § 2603

1. At divorce, community personal injury damages shall be assigned to
the party who suffered the injuries unless the court determines that
the interests of justice require another disposition.
a. At least one-half of the damages shall be assigned to the party
who suffered the injuries.
2. In Re Marriage of Devlin (1982) – page 346.

iv. Personal injury recovery against the other spouse is always the separate property
of the injured spouse.

h. Employment Related Benefits

i. Generally. If the benefit represents deferred compensation for services rendered
during marriage by the employee spouse, it is probably community property.
On the other hand, if the benefit represents compensation for post-separation

18
 services rendered by the employee, it is probably the employee’s separate
property.

ii. Retirement Benefits

1. Terminology
a. Defined Contribution Plan
i. The employer and employee contributions are allocated
to an account on behalf of each individual participating
employee. The participant’s account is increased each
year with his or her allocable share contributions and
earnings.
ii. Easy to trace because there is a specific account for
each employee.

b. Defined Benefit Plan

i. Doesn’t having an individual account. It promises the
employee that upon a stated retirement age, the plan
will have sufficient funds to pay the employee a
specified monthly pension for life.

c. Vested Pension Rights

i. The pension right will survive the discharge or
voluntary termination of the employee.

d. Matured Pension Rights

i. All conditions precedent have taken place or are within
the control of the employee.

iii. Retirement benefits are treated as community property to the extent that the
right to benefits was earned during marriage. That the benefits are actually
received after separation is immaterial.

iv. French v. French is overruled. A non-vested pension right is a contractual right

and a property right. It is more than a mere expectancy. A spouse should be
granted a contingent interest in a non-vested pension which, if vested, would be
deemed community property.
v. The argument that any unfairness in depriving a spouse of a community interest
can be remedied by awarding alimony has no merit. A spouse should not
depend on the trial court for exercising discretion when her request is hers as a
matter of absolute right.

vi. The Time Rule Method of Apportionment is Used When The Benefit is
Community and Separate
1. Multiply the Value of the Benefit by a Fraction Representing the
Community Interest
a. Numerator – number of years/months of employment while
married.
b. Denominator – number of years/months of total employment.
i. In Re Marriage of Brown (1976) – page 355.

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 vii. The Qualified Domestic Relations Order (“QDRO”)
1. A separate document, made part of the court’s judgment, that tells the
plan administrator how to divide up the benefit.
2. You have to join the plan administrator to ensure that the court has
jurisdiction.

viii. Trial Court Has Broad Discretion to Divide Community Property. Upon
dissolution of a marriage, the trial court has broad discretion in the division of
the community property interest in a spouse’s pension rights and can exercise its
discretion in that division as it sees fit.
1. Division in Kind – The community interest is divided between the
parties, and the plan, when benefits become payable, usually makes
separate payment to each according to their proportionate interest.
2. Cash Out Method – The entire community interest at its present value
is awarded to the employee spouse with offsetting assets awarded to the
employee spouse to accomplish an equal division.
a. Determining present value is difficult and often puts the
recipient at a disadvantage because they might die earlier.

ix. No Indefinite Jurisdiction. The Court does not have the power to retain
jurisdiction over the division of a community asset indefinitely. In Re Marriage
of Bergman (1985) – page 363.

x. Retirement benefits earned by a spouse during marriage are community

property, subject to equal division upon the dissolution of the marriage.
xi. A unilateral choice to postpone retirement cannot be manipulated so as to
impair a spouse’s interest in those retirement benefits. If a non-employee
spouse demands her share of a retirement benefit that is both vested and
matured, she may obtain it. The employee spouse is free to continue working (it
won’t force him into retirement), but he must reimburse his spouse for the share
of the community that she loses as a result of that decision. In Re Marriage of
Gillmore (1981) – page 377.

xii. Enhanced Benefits Are Community Assets. A nonemployee spouse who owns
a community property interest in an employee spouse’s retirement benefits
under a defined benefit retirement plan owns a community property interest in
the retirement benefits as enhanced.
xiii. Characterization Turns on Employer Intent. In determining how to
characterize an employment benefit, the courts will often look to the employer’s
intent in providing it.
1. Marriage of Lehman (1998) – page 388.

xiv. Characterization Turns on Employer Intent. No single characterization can be

given to employee stock options, and whether they can be characterized as
compensation for future services, for past services, or for both depends upon the
circumstances involved in the grant of the employee stock option. In
determining the community and separate interests in stock options, the
employer’s intent governs (is the benefit a bonus for work already performed, or
for future services?).
1. In Re Marriage of Hug (1984) – page 404.

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 i. Disability Benefits
i. Disability benefits are characterized according to what the disability benefits
replace. If they are intended to replace marital earnings, the disability pay is
community property. If they are intended to replace separate earnings, it is
separate property.

ii. If the insured spouse does not become disabled during the last policy term
before the parties’ separation, the community will have no interest in benefits
produced by renewals of the policy for subsequent terms because the renewal
premium will not have been paid during the marriage with community funds
and with the intent of providing community retirement income. Marriage of
Elfmont (1995) – page 413.

j. Termination and Other Employment Related Benefits

i. If an early retirement benefit is a form of deferred compensation for services
rendered, then it is a community asset. If it is a present compensation for
present loss of earnings, then it is the earning spouse’s separate property.
Marriage of Gram (1994) – page 431.

V. Spousal Management and Creditors’ Rights

a. Spousal Management
i. Separate Property. Each spouse has the exclusive management and control of
his separate property.
ii. Community Property. Each spouse has equal management and control of
community property. This means that either spouse may buy or sell community
property, or contract debt without the other spouse’s consent. However, the
spouses are still bound by their fiduciary relationship (§ 721) and the various
subduties that it comprises.

1. Community Personal Property; Management and Control - § 1100

a. No Gifts Without Written Consent. A spouse may not make a
gift of community personal property, or dispose of community
personal property for less than fair and reasonable value,
without the written consent of the other spouse.

2. Exceptions (Unequal management and control permissible):

a. The Business Exception
i. A spouse who is operating or managing a business that
is all or substantially all community personal property
has the primary management and control of the
business. This means that the managing spouse may
act alone in all transactions but shall give prior written
notice to the other spouse of any sale, lease,
exchange, encumbrance, or other disposition of all or
substantially all of the personal property used in the
operation of the business, whether or not title to that
property is held in the name of only one spouse.
ii. The § 721 Fiduciary Relationship Section may arise in
these circumstances.

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 b. The Personal Belongings Exception
c. Conveyances of Community Property Real Property
Exception
d. Family Law Attorney Lien Exception - § 2033
i. Either party may encumber his or her interest in
community real property to pay reasonable attorney's
fees in order to retain or maintain legal counsel in a
proceeding for dissolution of marriage, for nullity of
marriage, or for legal separation of the parties.

iii. If an insurance contract provides that the insured husband has the right to
change the beneficiary without the wife’s consent when she is named as such,
any such change of beneficiary without her consent and without valuable
consideration other than substitution of beneficiaries is voidable, and after the
death of the husband the wife may maintain an action for her community share
in the proceeds of the policy.
iv. Election. When the husband attempts to dispose of his wife’s share of the
community property as well as his own, naming her as one of the takers, she
must elect between her community rights and her husband’s gift. Tyre v. Aetna
Life Insurance Co (1960) – page 445.

b. Mismanagement of Community Assets By Tortfeasor Spouse. The tortfeasor spouse

and not the community, is solely responsible for paying attorneys’ fees incurred by the
spouse who committed the tort/crime. Marriage of Stitt (1983) – page 450.

i. The innocent spouse has a right of reimbursement against the tortfeasor spouse
if community assets were used to pay a debt arising from the acts of the tortious
spouse. Marriage of Beltran (1986) – page 453.

c. Mismanagement by Failing to Provide Info Upon Request. A managing spouse

breaches his fiduciary duty of full disclosure if the other spouse requests information
about the investments and the managing spouse failed or refused to provide such
information.
d. Spouses Not Bound By the Prudent Investor Rule. There is no duty of care in the
fiduciary duty owed by a spouse in managing community assets. Marriage of Duffy
(2001) – page 456. However, the spouses may breach their fiduciary duties of good
faith by withholding information.
i. D. Case - (updated law!): Marriage of Walker and the new § 721 adds the Duty
of Care, Duty of Loyalty, and the Duty of Good Faith & Fair Dealing

e. A Spouse’s Management Rights Are Violated When The Other Spouse Hides
Community Assets. Wilcox v. Wilcox (1971) – page 469.

f. Recapture and Reimbursement Proceedings

i. Under Family Code §§ 1100 and 1102, either spouse has the right to manage
and control community assets, but neither may make a gift of community
property without the consent of the other.

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 ii. During the marriage, the injured spouse can set aside the transfer and bring
the property back into the community estate.
1. During Marriage Wife May Revoke Husband’s Gratuitous Transfer.
The Section 172 right of a husband to gratuitously transfer community
property at any time is subject to the right of the wife to revoke such
transfers within the statutory period. But the right of revocation of the
gift does not prevent their immediate vesting in the donee.
2. Non-Transferring Spouse May Ratify. Later acts of ratification by the
non-transferring spouse may constitute consent to such a transfer and
bar the non-transferring spouse from recovering half of the property.
a. Spreckles v. Spreckles (1916) – page 473.

iii. After the termination of the marriage, the injured spouse can recapture only
one half of the property, on the theory that the injured spouse can trace his or
her half interest into the hands of the third person and recapture it as
separate property.
1. If a spouse after the death of the decedent proves a lack of consent to a
gift, it will be avoided to the extent of the non-consenting spouse’s one-
half interest in community property transferred. When evaluating the
community property, each spouse has a half interest in each community
asset rather than the community as a whole. Estate of Wilson (1986) –
page 480.

iv. No Encumbrance of Real Property For Atty Fee Without Both Spouses
Signature. Both spouses, either personally or by duly authorized agent, must
join in executing any instrument by which community real property or any
interest therein is sold, conveyed, or encumbered.
1. BAD LAW - Droeger v. Friedman, Sloan & Ross (1991) – page 484.
a. Encumbrance Now Okay. § 2033 of the Family Code now
permits either spouse to encumber real property in order to pay
for a family law attorney.

v. A creditor who previously forfeited a security interest in community real

property under § 5127 is placed in the position of any other unsecured creditor
entitled to seek a judgment against a debtor spouse and to enforce its money
judgment against the community property estate.
1. Lezine v. Security Pacific Financial Services, Inc. (1996) – page 500.

g. Creditors’ Rights
i. A creditor may reach any property over which the debtor has the legal right of
management and control.
1. Necessities. When one spouse incurs debt for necessities during
marriage, the other spouse is personally liable for the debt, and after
separation personal liabilities for necessities remain.

2. Torts. A spouse is not liable for the other spouse’s torts except where
she would have been liable if the marriage did not exist. Community
property is subject to tort liability of either spouse.
a. Tort For Benefit of Community – liability will be satisfied
from community property first, then from separate property.

23
 b. Tort Not For Benefit of Community – liability will be satisfied
from separate property first, then from community property.

ii. All community property, whenever acquired, is liable for the satisfaction of the
husband’s debts including a judgment against the husband for his tort. Because
the husband has the power of management and control of the community, he
also may subject the community to liability for his tort. Grolemund v. Cafferata
(1941) – page 518.

iii. A debt is characterized based on when it was incurred or made.

iv. The burden of proving intentional conduct of the spouse not benefiting the
community falls on the aggrieved spouse. Marriage of Feldner (1995) – page
522.

v. After the execution of a valid marital settlement agreement, negotiated at arm’s

length and providing a community business is transferred to the spouse who had
been exclusively operating it as his separate property, all obligations of the
business incurred thereafter are the sole obligation of the recipient spouse, even
though incurred before entry of an interlocutory judgment of dissolution of the
marriage incorporating the marital settlement agreement. American Olean Tile
Co. v. Schultze (1985) – page 528.

vi. Property received by a nondebtor spouse in a marital dissolution is not liable for
a debt incurred by the persons’ spouse before or during marriage, and the person
is not personally liable for the debt unless the debt was assigned for payment by
the person in the division of property. In Re Marriage of Braendle (1996) –
page 532.

VI. Division of Community Property at Dissolution

a. We have a no-fault system of divorce in California. But fault is still considered by the
courts to some extent (in custody, attorneys’ fees, or spousal support for instance).

b. Under Family Code § 2310, there are two grounds for dissolution:
i. Incurable insanity.
ii. Irreconcilable differences.

c. Division by Property Settlement Agreement

i. Scope and Validity
ii. Enforcement and Modification
1. Modification. There is a general policy favoring the ability of the
parties and the court to modify a property settlement agreement in the
event of changed circumstances such as inability to pay. Although
agreeing that the settlement agreement is nonmodifiable is not void
against public policy, the parties must use specific language to show
their intent.
a. In Re Marriage of Hufford (1984) – page 548.

d. Division by Court Order

i. Jurisdiction to Divide Property

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 1. Bifurcation. Only slight evidence is necessary to obtain birfucation and
resolution of marital status, while a spouse opposing bifurcation must
present compelling reasons for denial. Gionis v. Superior Court (1988)
– page 565.

2. No Jurisdiction to Dispose Separate Property. The power of the court

in disposing of the property of the parties in a divorce action is limited
to their community property. It cannot dispose of one party’s separate
property.
a. Robinson v. Robinson (1944) – page 567.

3. Jurisdiction Over the Parties/Property. In general, jurisdiction to

adjudicate matters in a marital case involves three requirements:
a. Subject matter jurisdiction.
b. In rem jurisdiction.
c. Personal jurisdiction.
4. When determining whether the court has personal jurisdiction over an
individual who is domiciled in another state, the court looks at the
individual’s contacts with the forum state at the time of the proceeding,
not at past contacts, and at whether it would be reasonable to exercise
jurisdiction.
a. Muckle v. Superior Court (2002) – page 568.

5. Default Judgments and Due Process. Due process is satisfied and

sufficient notice is given for section 580 purposes in marital dissolution
actions by the petitioner’s act of checking the boxes and inserting the
information called for on the standard form dissolution petition which
correspond or relate to the allegations made and the relief sought by the
petitioner.
a. In Re Marriage of Andresen (1994) – page 576.

ii. The Equal Division Requirement

1. With limited exceptions (sums deliberately misappropriated, the small
community property estate, and personal injury damage awards), the
court is required to divide the community and quasi-community
property of the parties equally.

2. Court Has Broad Discretion to Award Family Home. The trial court
has broad discretion to determine which party should be able to reside
in the family home, however, the court must also consider relevant
evidence in determining the duration of the award. Facts for the court
to consider include economic impact on the noncustodial parent,
emotional and social impacts on the minor, and tax impacts. In Re
Marriage of Stallworth (1987) – page 583.

a. A Duke Order: The Court allows the parent and child to remain
in the home, and defers the sale of the family home until a
stated condition occurs.

25
 3. Offset Required Where Major Undivisible Asset Awarded. Where a
major item of community not reasonably subject to division is awarded
to one party, the other shall be compensated in some manner so as to
maintain the required equal division of community property. In Re
Marriage of Tammen (1976) – page 590.

4. Debts Are Not Divided Equally, They Are Divided As the Court Sees
Fit. If there are no assets to divide, only debts, or after the equal
division of the assets there remain debts to be disposed of, the court has
the discretion to order the payment of such debts in a manner that is just
and equitable, depending on the respective earning capacities of the
spouse and other relevant factors. In Re Marriage of Eastis (1975) –
page 593.

iii. Valuation
1. Assets and liabilities must be valued as near as practicable to the time of
trial, unless one party shows good cause why a different date for
valuation should be used. § 2552.

2. Complex Valuation Questions. To divide community property equally,

the court must make specific findings concerning the nature and value
of all community assets of the parties unless property is divided in kind.
3. The trial court’s determination of the value of a particular asset is a
factual one which will be upheld on appeal if supported by substantial
evidence.
4. A court faced with a valuation problem must consider each factor which
might have a bearing on the value of the property.
a. In Re Marriage of Micalizio (1988) – page 595.

iv. Tax Consequences of Division

1. Capital Gains. Each party alone is liable for his or her capital gains
taxes after division of the community property.
2. Once having divided the community property equally, the court is not
required to speculate concerning what either party may do with his or
her share, thereby incurring recognition of tax liability because the
possibility of tax deferral depends on a variety of factors unrelated to
the division of the parties’ community property. In Re Marriage of
Harrington (1992) – page 602.

e. Post Dissolution Remedies

i. There are 5 grounds for setting aside a judgment under Family Code § 2122:
1. Actual (extrinsic) fraud within one year.
2. Perjury within one year.
3. Duress within 2 years.
a. Any wrongful act or threat which overcomes the free will of a
party constitutes duress.
4. Mental incapacity within 2 years.
5. Mistake within 1 year.

ii. The Family Code § 2121 Hurdle

26
 1. There shall be no set aside unless the court find that the facts alleged as
grounds for relief materially affected the original outcome and the
moving party would materially benefit from the granting of relief.
a. This means that even if a party shows duress or one of the other
grounds for relief, that party may still not get the judgment set
aside if he fails this test.

iii. Failure to Disclose Existence or Value of Community Asset Constitutes a

“Mistake”. A judgment of dissolution based on a stipulation of the parties
dividing the community property, will be set aside when one party fails to
disclose to the other party the extent or the value of the community property at
the time that party signed the stipulation.
iv. The failure of a spouse to disclose the existence or the value of a community
asset constitutes a basis for setting aside a judgment on the grounds of mistake
under § 2122.
v. Extrinsic Fraud (a valid ground for setting aside a judgment)
1. The party is deprived of an opportunity to present his claim or defense
to the court.
vi. Intrinsic Fraud (not a valid ground for setting aside a judgment)
1. The party has been given notice of the action and has had an
opportunity to present his case.
a. Marriage of Varner (1997) – page 608.

vii. Concealment of Community Property Assets

1. If a spouse conceals assets from the other spouse in a marital dissolution
action in breach of fiduciary duty, then the innocent spouse may be
awarded 100% of the concealed asset. Marriage of Rossi (2001) – page
621.

viii. Assets that are Omitted in the Pleadings are Subject to Future Litigation.
1. Property which is not mentioned in the pleadings as community
property is left unadjudicated by decree of divorce, and is subject to
future litigation, the parties being tenants in common meanwhile. Henn
v. Henn (1980) – page 628.

2. An Attorney that Fails to Claim a Community Property Interest in an

Asset May Be Liable For Legal Malpractice. An attorney assumes an
obligation to his client to undertake reasonable research in an effort to
ascertain relevant legal principles and to make an informed decision as
to a course of conduct based upon intelligent assessment of the problem.
Aloy v. Mash (1985) – page 634.

27