MBE Rules · Community Property
Credit Acquisitions
Marriage of Grinius (lender intent)
The rule
Property bought on credit during marriage is presumptively community; the presumption is overcome only by showing the lender relied primarily on separate property for repayment (lender-intent test).
In plain English
When a couple buys property on credit during their marriage, that property is generally considered community property. However, if it can be shown that the lender primarily relied on the borrower's separate property for repayment, this presumption can be challenged.
Worked example
During their marriage, John and Sarah purchased a car using a loan. The lender based the loan approval primarily on John's substantial separate savings account. In this case, the car would likely be classified as separate property rather than community property.
Memory hook
Credit purchases during marriage? Community property unless the lender looked at separate assets!
The trap
Exams often present scenarios where students must determine the source of repayment without clear evidence, leading to confusion about the presumption of community property.
How examiners test it
Questions typically involve a fact pattern where property is acquired on credit, requiring students to analyze the lender's reliance on separate versus community property.
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More Community Property rules
- Interspousal Fiduciary Duty · Cal. Fam. Code § 721; § 1100(e)
- Management and Control of CP · Cal. Fam. Code § 1100(a)-(d)
- Equal Division at Dissolution · Cal. Fam. Code § 2550
- Putative Spouse Doctrine · Cal. Fam. Code § 2251
- Business Goodwill · Marriage of Foster (goodwill)
- Severance Pay · Severance pay (Cal.)