What You Need to Know About Community Property Laws in California
Spouses must keep divide marital property in a divorce. Here’s what you need to know about community property laws in California.
Under California law, divorcing spouses divide community property equally and keep their separate property. Essentially, community property is assets or debts acquired during a marriage. Separate property is acquired before a marriage.
Is California a Community Property State?
California is a community property state, meaning that each spouse owns 50% of all assets and debts acquired during the marriage. Community property, also called marital property, is divided equally between spouses in a divorce.
What Is Community Property in California?
Community property, also called marital property, is any assets or debts acquired during a marriage. Under California law, community property should be divided equally between spouses in a divorce.
What is considered community property in California?
Under California Family Code 760, the community property may include:
- Income earned by spouses during the marriage (marital earnings)
- Property purchased with marital earnings
- The marital home (including mortgages)
Basically, any assets earned during the marriage or bought with marital earnings are considered community property and are divided equally in a divorce.
What Is Separate Property in California?
Separate property, also called nonmarital property, is any assets or debts acquired before marriage, or exempt from California’s community property laws. Each spouse keeps their separate property in a divorce; it’s not divided.
What is considered separate property in California?
Under California Family Code 770, separate property may include:
- Property acquired before the marriage
- Gifts or inheritance received before or during the marriage
- Income earned from separate property
- Assets or debts conveyed as a spouse’s separate property by the other spouse
Specific examples of assets or debts that may be considered as separate property include:
- Separate bank accounts
- Inheritances or gifts
- Gifts between spouses
- Money damages from tort claims
When does separate property become community property in California?
Separate property can become community property through commingling or transmutation. For example, separate property can become separate property if it’s placed in a joint bank account. Spouses can agree to legally transmute separate property as community property, or vice versa.
In a divorce, spouses may attempt to claim the separate property as their own. Distinguishing community from separate property can become difficult without proving rights of ownership. It’s important to trace your property through financial and property documents like deeds, bank statements, etc..
California Community Property with Right of Survivorship
Community property with the right of survivorship prevents spouses from passing community property in their will. Under the right of survivorship, the deceased spouse’s share of community property is passed to the surviving spouse. Surviving spouses are protected from losing their community property through probate.
Community vs. Separate Property in California
Community property is assets or debts acquired during a marriage, excluding inheritance or gifts. Separate property includes assets or debts acquired before marriage or exempt from California’s community property laws. The main difference between community and separate property is whether the assets were acquired before or during the marriage.
Community Property Agreement California
In California, spouses can agree to community property division terms. The community property agreement can be submitted to a California judge for approval. Spouses can also establish property rights in the event of a divorce by a prenuptial or postnuptial agreement.
Related: How to Divide Property in a California Divorce
FAQs About Community Property Laws in California
Are separate bank accounts marital property in California?
Depending on where the funds came from, separate bank accounts can be marital property. If the funds in the separate bank accounts are considered community property, then the account will be considered marital property as well. If the account’s funds are separate property, then the account will not be divided in a divorce.
Is inheritance community property in California?
Regardless of whether it was acquired before or during the marriage, a spouse’s inheritance is separate property. However, inheritance can be considered community property if you assigned ownership of the property to your spouse, or if you commingled inheritance in a joint bank account.
Is my wife a shareholder community property in California?
A corporation started during a marriage, or using marital earnings, is considered community property in California. Each spouse is considered a shareholder in a business that started during a marriage.
Is unemployment community property in California?
Unemployment benefits are community property in California.
Is social security community property in California?
Under federal law, social security benefits are separate property. However, social security income can become community property if it’s held in a joint bank account.
Is income from separate property community property in California?
Income earned from separate property is considered separate property and should not be divided in a divorce.
Is my 401k considered community property in California?
Retirement benefits, like 401k or pension plans, are community property and divided between spouses in a California divorce.
What is quasi-community property in California?
Quasi-community property is assets acquired in another state during the marriage that would be considered community property is acquired in California. Quasi-community property will be considered community property and divided upon divorce.
Free Consultation With a Property Division Attorney in California
If you need more help understanding community property laws in California, contact us. We’ll get you in touch with the most qualified attorney for your unique legal situation. Get your free consultation with one of our Property Division Attorneys in California today!