Blog

H and W married in 2010 and live in California. Prior to the…

H and W married in 2010 and live in California. Prior to the marriage, W was a successful entrepreneur with own skincare company, “GlowUp, Inc”, and had accumulated substantial wealth. After marriage, W continued to run GlowUp, Inc, and made substantial profits, which she deposited into an investment account titled solely in her business name. She did not discuss this with H. H, a screenwriter, experienced several years of sporadic employment. Without informing W, he borrowed $50,000 using a joint credit card to finance the production of his short film, which he posted on YouTube.  The film was a failure.  When the card statements arrived, W was furious and paid it off using funds from her GlowUp investment account. Around the same time, W secretly transferred $200,000 from her secret investment account to her sister, calling it a “business loan” but never demanding repayment. She did not tell H about the transfer. In 2023, W purchased a Tesla for herself, paying $80,000 from the GlowUp account. She took title in her name only and told H, “This is mine. You never paid for any of this.” In 2024, GlowUp was sued for product liability. W’s separate bank account was levied to satisfy a $250,000 judgment. H immediately filed for divorce. Analyze the rights and obligations of H, W, and creditors under California community property law with respect to the following: The GlowUp investment account and related transactions. The credit card debt incurred by H. The Tesla purchase. The product liability judgment and creditors’ rights. Any potential fiduciary duties and breaches.

Husband and Wife married in 2015.  Husband is an artist. Bef…

Husband and Wife married in 2015.  Husband is an artist. Before marrying Wife, he operated a small sole proprietorship, “H Artworks.” At the time of marriage, the business had minimal physical assets (just a rented studio and art supplies), limited income, and no employees. H handled every aspect of the business himself—painting, marketing, and selling. During the marriage, H worked 60–70 hours per week on the business. His talent and reputation grew, and the business became highly profitable. He never hired employees or made major capital improvements. H did not pay himself a salary; instead, business income was either reinvested or used for household expenses. His success was driven entirely by his labor and creative vision. During marriage, Wife worked as an attorney at a personal injury law firm. She paid most of the household bills from her earnings. In 2020, W’s grandmother passed away, leaving her an inheritance of $250,000.  W used the full amount as the down payment on a home in Beverly Hills that she and H purchased during the marriage. Title to the home was taken as “H and W, husband and wife, as joint tenants.” In 2021, H sold one of his pre-marital original paintings for $1 million. The check was deposited into their joint checking account held at Chase bank.  Shortly after, W used $100,000 from that account to buy a Tesla, which she titled in her name alone. In 2022, for her birthday, H gave W one of his early paintings as a birthday gift.  The painting was entitled, “Billable Hours”, and was a clock with wings, illustrating the fleeting billable hours against eternity. H said to W, “I gift this to you, sweetheart. Remember your time is worth more than just billable hours.  Please cherish the time you have here on earth – this painting is yours now.”  He did not sign any writing or transfer documents.  The painting hung in W’s home office where she looked at it every day.  The painting had sentimental value and had appreciated significantly – it is now worth 10 million dollars.  H Artworks is now valued at 50 million dollars.  The Chase joint checking account had $5 million remaining at their date of separation. The parties are now divorcing.  Discuss how the following assets should be characterized and divided under California community property law: The Beverly Hills home The business (H Artworks), including its appreciation Billable Hours painting Tesla Joint Checking account held at Chase.