3. There are two (2) one hour essay questions worth 50 points each and one (1) short answer bonus
question worth 5 points. The time for each question is suggested only; you may allocate your time as you wish.

4. This exam consists of 4 pages.

5. Please return your exam with your exam books.

6. Be sure to analyze the facts according to California law.

7. All events take place in California unless otherwise stated.

Question One (50 points) - One Hour

In 1980, on wanda's 25th birthday, she received $100,000 from her trust fund which she used as a down payment on $200,000 condo in San Francisco. Wanda and her boyfriend Bob move into the condo and all mortgage payments are made from Wanda's trust fund. in 1983, Wanda finds Bob in bed with a gerbil and throws him out of the condo.

To escape her woes, Wanda takes a vacation in Jamaica and falls in love with Hank. They marry in Montego Bay and move back to San Francisco. Wanda sells the condo and uses the $200,000 sale proceeds on a $400,000 Victorian house. Title to the house is taken as: "Wanda and Hank, joint tenants with right of survivorship." Wanda tells Hank, "Don't forget that the down payment is still my money." Hank says, "Not to worry." Hank pays for all of the mortgage payments with royalties from his 1980 bestseller, "A Cowboy in Jamaica."

In 1986, Hank sues Playgirl magazine for publishing unauthorized excerpts from his book with a photo of Hank frolicking on the beach with several topless women. Playgirl magazine and Hank settle the lawsuit for $100,000. Hank uses $50,000 from the settlement to buy Microsoft stock in Wanda's name. Hank uses the $50,000 balance from the settlement to buy a racehorse in his name.

In 1990, Hank's second book, "A Cowboy in the City" is published to instant acclaim. Hank deposits all of his royalties in a bank account in his name only. He continues to pay for the mortgage payments with the book royalties.

In 1992, candy sues Hank for allegedly transmitting chlamydia. Candy prevails and obtains a judgment against Hank for $25,000. Wanda is furious and petitions the court for dissolution. Wanda then discovers that their Jamaican marriage was not properly recorded and is not legal.

What are the respective rights of Wanda and Hank in the following property:

1. The San Franciscan Victorian house now worth $500,000;
2. The book royalties;
3. The Microsoft stock; and,
4. The racehorse.

Question Two(50 points) - One Hour

Harry had grand plans for himself and Winnifred. The year was 19'72; they were both smart, ambitious and about to graduate with honors from Stanford University. Before graduation, Harry takes out a term life insurance policy for $1 million, naming his mother Matilda as the sole beneficiary. After graduation, Harry and Winnifred marry and move into a townhouse paid for by Winnifred's parents. Title to the townhouse was taken as: "Winnifred, a married woman." Harry did not know that the title was in Winnifred's name only.
Harry and Winnifred proceed on to medical school. Winnifred's parents continue to pay for her tuition and school expenses. Harry obtains a $20,000 school loan. When Winnifred becomes unexpectedly pregnant, she decides to leave school and focus on motherhood. Winnifred frequently helps Harry with his doctoral thesis on genetics. Harry's thesis is ultimately published in The New England Journal of Medicine.

After obtaining his PhD, Harry obtains a $50,000 grant to further his research in genetics. He uses the grant to incorporate a company called, "DNA Technologies,Inc." For a price, parents can preselect the sex, hair color and eye color of their baby. Harry owns all of the stock in DNA Technologies and pays himself an annual salary of $100,000.

In 1980, Harry and Winnifred buy an estate in Hillsborough for $1 million. Title to the house is taken as: Harry and Winnifred, husband and wife" Winnifred collects rents from the townhouse and deposits the monies into a joint bank account with Harry.

In 1984, Winnifred withdraws $20,000 from the joint account to buy a sailboat in her name only. Winnifred pays for the insurance premiums on the sailboat with monies from the joint account. The sailboat is later destroyed in a a dock fire. Winnifred uses the $20,000 insurance proceeds to buy a cabin in Lake Tahoe. Title to the cabin is taken in Winnifred's name only.

In 19$6, Harry undertakes a risky research project involving the radiation of DNA molecules. Harry quickly develops cancer and dies interstate.

How should Harry's estate be distributed?

When is quasi-community property treated differently from community property?