Community vs Separate Property in California

Everything You Need to Know About Community vs Separate Property in California

California is a community property state. Here’s everything you need to know about community vs separate property in California.

In California, community property law binds two spouses into one legal community. In the case of a divorce, community property (unlike separate property) will typically be split evenly between both partners.

The Differences Between Community and Separate Property in California

Community Property

California is a community property state. Thus, according to California Family Code Section 760, all property that spouses acquire during the course of their marriage is considered community property. In the case of a divorce, community property must be divided equally between spouses. However, exceptions to this rule do exist. For example, certain prenuptial agreements will state specific procedures for dividing assets in the case of a divorce, and as such will need to be implemented if a couple decides to legally separate.

In California, laws do not follow “in-kind” division procedures, therefore each physical object does not need to be divided. Generally, each spouse will receive exactly half of the net community estate. Judges will decide on the net community estate by subtracting debts, and will then proceed to decide specifics about what each spouse is entitled to. An example of how community property could be divided would be one spouse being awarded a family business while the other is awarded the family home. The goal of community property division (unless otherwise stated) is to ensure each spouse receives the same amount of assets in terms of value.

Separate Property

Separate property, unlike community property, is not divided in California divorces. This sort of property refers to what each spouse owns individually. That being said, separate property that is mixed with community property can become community property. For example, if a wedding ring is upgraded using marital funds during the course of a marriage, the ring can change from being separate property to community property. Separate property can include:

Any property owned by a spouse prior to getting married
Any property owned by a spouse after the date of separation
Any property a spouse received during a marriage as a gift or through inheritance
Rents, issues, and profits made from property received during a marriage as a gift or through inheritance
Any finances or property acquired or belonging to minor children while living separately from the other spouse with the minor children

Quasi-Community Property in California

Quasi-community property refers to property that one or both spouses acquired in another state that is treated as community property in a California divorce. This sort of property comes into play when a spouse or couple resides outside of California while married, and acquires property (earnings, real estate, etc) prior to getting a divorce. For example, if a married couple moves to Texas and buys a home, that home will be considered community property if the couple proceeds to get divorced in the State of California. When divorcing in California, any quasi-community property will always be considered community property.

FAQs About Community vs Separate Property in California

How do California’s community property laws affect which spouse receives the house post-divorce?

Every divorce case differs in which spouse receives the house in California. Some cases include one spouse being granted the marital residence while the other receives a larger share of the marital estate. Other cases include judges ordering the party to sell the home and split the proceeds in half. However, if children are involved, most often the primary custodial parent will be granted the right to reside in the home with the children – at least until the divorce is settled. Typically, this means the custodial parent living in the home will be solely responsible for completing payments related to the house. However, if the spouse that does not remain in the home has a significantly higher income than the custodial parent remaining in the home, the custodial parent may be entitled to financial help from the other parent.

Is debt acquired during a marriage considered community property?

As a community property state, California law makes two individuals into one legal community once married. Property acquired during a marriage is considered community property. Further, any debt acquired during a marriage is considered “community debt”. Thus, debt acquired during a marriage is considered community property and both spouses may be responsible for it even after a divorce.

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