Community Prop Essay Outline – Flashcards
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Basic Presumptions Governing Community Property
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Nevada is a community property state. 1. All property acquired during the marriage is presumed to be community property 2. All property acquired before marriage or after permanent separation is deemed to be SP 3. Any property acquired by gift, devise, or bequest is presumed to be SP
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Source of Funds/Character of Asset
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4. In order to determine the character of any asset Nevada court's will trace it back to the source of funds used to acquire the asset. 5. A change in the mere form of an asset does not necessarily change its characterization.
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Issues that Effect All Assets
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1. transmutation 2. Divorce 3. Death 4. Creditors 5. Invalid Marriage
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Transmutation
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An agreement during a marriage created for the purpose of changing the character or an asset or a series of assets Generally, should be 1) in writing 2) signed both parties and 3) acknowledged before rotary public
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Divorce
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At divorce the basic rule is to divide the community assets in a reasonably equal manner unless some special situation requires deviation.
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Death
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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
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Things to Analyze for Invalid Marriage
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1. Age 2. Capacity 3. License 4. Ceremony 5. No Common Law Marriages 6. Contract Issues
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Special Classification Rules
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1. PI awards 2. Retirement Benefits 3. Disability pay and workers COmp 4. Business and Professional Goodwill 5. Education 6. Life INsurance
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Personal injury Awards
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SP
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Retirement Benefits
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1. CP if earned during course of marriage 2
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Rules to Determine CP v. SP in retirement benefits
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1. Time Rule 2. Wait and See Rule (preferred)
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Disability pay and workers compensation Benefits
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treated like CP to the extent they replace wages/ treated like retirement benefits if taken in lieau of retirement
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Business and Professional Good Will
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CP if earned during marriage
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Education and Training
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Not CP but supportin spouse may be entitled to maintenance award
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Life Insurance
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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
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Issues for Proeprty Acquired with Community and Separate Funds
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1. Pay Off 2. Improvements
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Pay Off
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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
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Malmquist Formula
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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
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Improvements between CP and SP
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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
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3 Actions by Spouses that Can Alter Character of the Property
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1. Antenuptial Agreements 2. Transmutations 3. Property Held in Joint Tenancy
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Antenuptial Agreements
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enforceable but must be in writing
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Transmutations
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Agreement between spouse to change the character of the property, apply contract principles
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Community Labor enhancing the value of SP business
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Model Answer "When one spouse owns a business before the marriage and the business increases in value during the course of the marriage, Nevada courts apportion the value of sp/cp shares by applying either one of two approaches known as the Pereira or Van camp approach.
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Van Camp Approach
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The Van Camp is used when the increase in the value of the business is primarily because of the unique nature of the business as well as market factors such as capital investment and natural growth.
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Van Camp Formula
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Based on value of community services 1. Determine what a fair salary would be for the community labor and 2. multiple that by years in marriage/ subtract any salary already received and community expenses=CP share of business/ rest is SP
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Pereira Approach
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Nevada prefers the Pereira approach. The Pereira approach favors the community estate, and is applied when the increase in value of the business is primarily the result of labor and personal skills.
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Pereira Formula
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1. Determine the value of the SP value of the business at the start 2.then give a fair rate of return (5%) calculated annualy. SP= initial value plus fair rate of return CP= everything else
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Distribution at Divorce- Basic Rule
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divide each of the community assets in a reasonably equal manner
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Deviation from Equal Distribution Rule
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can be done in following circumstances 1. Misappropriation (unauthorized gifts) 2. Liabilities Exceed Assets 3. Education Debts get assigned to the spouse who receive the education 4. tort liabilities assigned to spouse who incurred liability (look if tort occured while helping comm going bowling-SP or drop kid off at school-CP) 5. Family Home can be given to person whom has custody
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Distribution at Death with Will
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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
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Distribution at Death without Will
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Suriving Spouse Gets Everything
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Management and Control of CP During Marriage
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1. Spouses have equal management and control 2. Gifts of CP require the written consent of non-donor spouse 3. Exceptions: Real Property
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Preemption Generally
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Under the Supremecy Clause, Federal Law preempt inconsisten state laws. In some instances Federal law preempts Nevada from applying CP concepts to certain assets
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Preempted
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1. Homestead Claims 2. Military Life Insurance Benefits 3. US Savings Bonds 4. Social Security Benefits
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Not Preempted
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1. Railroad retirement benefits 2. Military Retirement Benefits 3. Copyrights
