What Is Community Property On The California Bar Exam?

What Is Community Property On The California Bar Exam?

Unlike many other bar exam administrations, the California Bar Exam frequently tests examinees on community property. Check out a full list of highly tested California Bar Exam subjects here. This is one of the few subjects that you may not have taken during law school but is regularly tested. Many examinees panic at the thought of having to learn an entirely new subject for the exam. While community property will be a new subject for some, it is generally straightforward in concept. With that being said, let’s get into what the basics of community property on the California Bar Exam are and how the subject is tested.

What Is Community Property On The California Bar Exam?

What is Community Property?

By now you already know that California is a community property state and that the subject is highly tested. So, for those of you that didn’t take community property in law school – what does the term mean? Community property means that all property acquired during marriage by either spouse is presumed to be owned equally. Upon divorce and absent a prenuptial or postnuptial agreement, there should be a 50/50 split of community assets and debts. As with any legal concept, there are exceptions to the rule, and this is only meant as a general overview. Want some actual examples of community property? Ask and you shall receive!

Examples of Community Property

In a community property state like California, community property can come in many variations of all shapes and sizes. Here are some of the most common examples of community property:

• Income earned by either spouse during the marriage;

• Property purchased during the marriage with community funds;

• Income earned through investments of community funds; and

• Debts acquired during the marriage with community funds.

In short, when a couple is married, any property accumulated during the marriage belongs to both spouses as a community. Each spouse has a right to it, regardless of which spouse uses it or bought it.

Separate Property

Anything that is not considered community property is considered separate property. Super helpful definition, right? Let’s expand that a bit.  In California, separate property falls into three major categories.

• The first category is comprised of assets owned prior to the date of marriage.
• The second category is made up of property acquired after the date of separation.
• The final category is property acquired after the date of marriage by way of inheritance or gift.

Similar to community property, any income, rents, and/or dividends generated by separate property remains separate property.

Examples of Separate Property

Separate property can sometimes be tricky to identify. Here are the most common examples of situations involving separate property:

• A parent passes away and provides an inheritance to their married son or daughter. The child’s inheritance is separate property and belongs to him or her individually and apart from the marriage.
• The husband or wife owns a stock portfolio acquired prior to the marriage. The stock portfolio and any income derived from it remain the separate property of the husband or wife.
• Any property purchased during a marriage but with separate property funds remain the separate property of the purchasing party.

How is Community Property Tested?

Community property on the California Bar Exam is generally tested under a number of different circumstances. For more information, check out our California Bar Exam Essay Guide! The challenging part is that many community property essay questions will mix different aspects of the subject. Here’s what you should look out for:

Identifying the end of the marital community.

The marital community ends at either death or divorce. In addition, the community ends when there is a permanent physical separation and intent not to resume the marriage. The concepts of physical separation and intent not to resume the marriage are frequently tested. Be on the lookout for fact patterns that include this!

Drawing the line between separate and community property.

A community property essay will almost always test this concept. Examinees should be able to distinguish separate from community property, even when the facts get complex and muddled. One concept that you should get familiar with is transmutation – A transmutation is an agreement made during the marriage to alter the character of an asset. Look out for situations involving a potential change from separate to community property!

Quasi-community property is often tested by the examiners and you should be aware of facts patterns that include this concept.

Quasi-community property is property acquired by a married couple that lived outside of California when the property was acquired. Had the married couple been living in California when the property was acquired, it would have been considered community property. This type of property is treated as community property in California. Test-takers should be on the lookout for these types of facts.

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