What is Community Property?

California is a community property state, meaning that most property acquired during a marriage by either or both spouses will be equally shared property. Understanding community property becomes an important matter when a marriage ends in divorce. When the marital union ends, there must be a division of property. Under California law, the division of assets must be conducted as equally as possible. Absent any prior agreement (like a prenuptial agreement), the family law court will seek as close to a 50/50 split of the community property as possible.

Community property is any asset that belongs to each spouse equally. In California, community property can be anything you earned during your marriage, anything you purchased while you were married, and any debts you take on during marriage. While it is helpful to comprehend community property for a pending divorce, community property also comes up in other matters, like when spouses decide to file their taxes separately.

Not all assets acquired during a marriage are considered marital property. For example, a personal gift you received during your marriage may not be considered shared property if the gift was given only to one spouse. Similarly, if you inherited assets and were the sole beneficiary of that asset, then the inheritance is not shared with your spouse as community property.

For a better understanding of community property and the division of assets, it is highly recommended that you work with an experienced asset protection lawyer. Contact our law firm to discuss your unique case, and we can help provide legal advice about how to proceed.

What Are Your Assets?

Examples of potential community property include the following:

  • Debt accrued during marriage.
  • Expensive jewelry.
  • Financial interests in personal businesses.
  • Household items like TVs, large appliances, etc.
  • Income earned during the time of your marriage.
  • Personal property acquired during the marriage.
  • Pets adopted or bought during a marriage.
  • Real estate purchased, sold, or mortgaged during a marriage.
  • Retirement accounts and pensions.
  • Shared bank accounts and investments.
  • Valuable art.
  • Vehicles like cars, boats, and RVs purchased during the marriage.

Are There Any Exceptions to the Community Property Rules?

There are several exceptions to the community property rule. These exceptions include assets considered separate property, property acquired during a legal separation, and property subject to a prenuptial or postnuptial agreement.

Separate property can include any property received through an inheritance, via a will or trust, or as a gift. Additionally, separate property may be an asset either spouse acquired before the marriage; thus, it does not become part of the marital estate. For example, if both spouses owned their cars before marriage, those motor vehicles typically do not become community property.

A legal separation allows both spouses to live separately before beginning divorce proceedings. During this time, they may work to reconcile, but all the while, their finances are kept separate. If one spouse makes a costly purchase during a separation, that purchase is not considered community property.

Most other assets are to be considered community property unless, of course, a previously established agreement has been signed by both parties. Public opinion and popular culture have demonized prenups, but these agreements can be valuable for asset protection if a marriage ends in divorce.

What is Quasi-Community Property and Commingled Property?

Property division is a complex matter; sometimes things cannot be divided 50/50. Quasi-community property might include purchases and other acquisitions made during a marriage when one or both spouses lived out of state before arriving in a community property state like California. Quasi-community property will be treated as community property if the divorce proceedings occur in California, as the property would be considered shared if they’d been acquired if they’d been in California at the time.

There is also such a thing as mixed or commingled community property. For example, if one party owned a piece of real estate before the marriage, but then during the marriage, that property was sold to put a down payment on a new home, that would be considered commingling between separate and community property. So, how is this resolved in a divorce? Such situations often include a lot of math, paperwork, and the necessity for an experienced legal team. For a free case review, please contact our law offices today.

What Are the Steps of Property Division in California Divorce Proceedings?

Family law attorneys will get involved and help assess your assets’ worth, often working with expert appraisers when necessary.

The most critical and expensive community property will likely be shared real estate. If the home is shared 50/50 in a clean split, the spouses usually determine the property’s value, sell it, and then divide the proceeds. However, sometimes one party wishes to remain in the home. In such cases, the value will be determined, and the ex-spouse who wishes to live in the house will need to buy out the other ex-partner of their share of the property.

This method applies to almost all examples of property ownership, including expensive valuables and shared automobiles. Some properties, like debts, will be split 50/50 without needing a buyout.

Schedule a Free Case Evaluation with Experienced Asset Protection Attorneys Today

The Law Office of Patrick O’Kennedy has extensive experience helping clients protect their assets and get through divorce proceedings without the extra drama. We would be proud to represent you and help you through this difficult time.

To speak with our highly skilled legal team, please contact our California law offices at any time to schedule your free consultation. 714-701-6356.