Community Property and Separate Property in California
Division of property and assets is a major concern in most divorces, and it does not help that the applicable laws can often be complicated and confusing. It is important to understand whether your property is considered “community’ or “separate” property, and how each will be treated in the eyes of the law.
Generally, “property” can be understood as anything that can be bought or sold, such as real estate, cars, furniture, clothing, and pets for example. Property can also refer to anything of monetary value, including bank accounts, debt, investment holdings, businesses, patents, and even security deposits on rental property.
Community Property
The California legislature defines community property as “all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state.”
California is a community property state, meaning that a marriage or registration of domestic partnership makes two people one legal “community.” Any property or debt acquired by one person during the marriage or partnership is seen as belonging to the community, and not the individual that accrued. This means that the manner in which title is held is not what characterizes an item as separate or community property.
Each spouse is also equally liable for debts. In most cases, this includes unpaid balances on credit cards, home mortgages and car loan balances. At the end of a divorce, community property is commonly split 50/50 unless the parties agree to another manner of division.
Separate Property
The California legislature defines separate property is property acquired before the marriage, after the date of separation, or during the marriage through inheritance, gift, bequest, or devise. This may also include settlement money from a personal injury judgment, for example.
Separate property can also include anything that one spouse gives up to the other spouse in writing, through an agreement. Any property that is bought with separate property is also separate property, even if it is bought during the marriage.
For example, if you purchase a car after your marriage with money you made before the marriage, that car can still be separate property. Rent or income earned from separate property continues to be separate if it is not mixed with community assets. All debts incurred before marriage are separate debts. For example, educational loans or job training loans incurred before marriage would be separate debts.
If you are interested in a consultation to discuss the division of debt or property for your dissolution, please contact us as soon as possible.
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