San Joaquin College of Law

COMMUNITY PROPERTY--INTERIM EXAM Oct'08 /Cartier

TIME: 1 hour 30 minutes.

All of the following events took place in the State of California.

Hank and Winnie married in 1972. Sometime during the first five years of their marriage, Winnie inherited a mountain cabin in the Shaver Lake area and took title in her name alone. The parties lived in a house in Fresno that Hank owned before marriage which was titled in his name alone. During the marriage, payments on the Fresno property were made from the parties' earnings deposited in a joint checking account. After vacationing at the cabin at various times for about ten years, the parties decided to renovate the cabin and to make it their primary residence. In order obtain financing to complete the project, the lender insisted that title to the Shaver property be placed in the names of “Hank and Winnie, as joint tenants." After the parties moved to Shaver, the Fresno house was continuously rented. The rents were deposited in the parties' joint checking account. Payments on the loans on both properties continued to be made from the joint checking account until 1992, when Hank sold the Fresno property for $100,000. He paid the balance owing on the Fresno property and the balance owing on the loan on the Shaver property. The balance of the proceeds from the sale of the Fresno property was used to fund a self-managed stock portfolio in Hank’s name. In 1998, Hank was permanently disabled at work. He began receiving disability pay which will continue until 2015, when he becomes eligible for a longevity retirement based on turning age 65 with 30 years of continuous employment. Hank continues to manage the stock portfolio.

What community and/or separate property interests, if any, exist in regard to each of the following assets:

1.         The mountain cabin in Shaver ? DISCUSS.

2.         The stock portfolio which has increase significantly in value? DISCUSS.

3.          Hank’s disability and retirement benefits? DISCUSS.

Answer according to California law.

San Joaquin College of Law

Community Property – Interim Exam 1008 /Cartier

Mountain Cabin

 inherited by W (1972-77) = sp 

 *Married W by a writing if pre 1975 

Title in Joint tenancy  + acquisition during marriage 

 presumed community property 

            absent a writing 

 BUT tracing right to reimbursement for sp contribution 

            W – equity value on date of title change 

                        UNLESS pre- 84 – Lucas gift 

                        retroactive application of 2640 is unconstitutional 

            H – pay off loan with proceeds of Fresno property

                        Originally his sp 

                        Payments made with cp during marriage – Moore 

                                    Pro rata ownership 

                                    Formula 

                        If sp used to pay cp – reimbursement 

                        If cp used to pay cp – no big deal                                           

Portfolio

 acquired during marriage – GCP 

 rebutted by tracing to SP source 

            Hicks / Mix / See 

 sp enhaced in value w/ cp labor – Pereira / VanCamp 

Disability / Pension

 disability is cp during marriage – wage replacement 

 sp post separation  

 disability in lieu = cp to extent it replaces pension 

            time rule 

 excess including tax savings = sp