Most married people know California is a community property state but rarely know what it means.
If you’re engaged, married or in a domestic partnership domiciled in California, you want to know what it means to live in a community property state.
This is a simplified introduction to California’s community property laws.
1. Generally speaking, California’s community property laws are California Family Code sections 750, 760 and 770.
2. A married person or domestic partner’s property rights are governed by California’s community property laws while domiciled in California, unless otherwise agreed in writing. A person’s domicile is the place, whether state or country, a person considers to be their permanent residence – their true home base.
3. There is a rebuttable presumption that property acquired during a marriage or domestic partnership while domiciled in California is community property.
4. There’s also a rebuttable presumption that out-of-state property acquired during a marriage while domiciled in California is quasi-community property.
5. If title is acquired in joint form (e.g., as community property, joint tenants, tenants in common, etc.), real property must be characterized as community property, unless the title or a written agreement between the spouses specifies a separate property interest.
6. The presumptions that property acquired during marriage are community or quasi-community property may be overcome by proving one of the following three facts:
- The property was acquired from a third person by gift, bequest or inheritance for the exclusive benefit of one spouse
- The source of the property was separate property
- The couple transmuted (legally transformed) the property from community to separate property
7. The spouse making separate property claims has the burden of proving the property is separate.
8. If separate property is used to acquire a community property asset, there is a “tracing right of reimbursement” for separate property contributions to principal, equity or improvements, unless the reimbursement right has been waived in writing. (See California Family Code section 2640)
9. If property is community or quasi-community property, judges are required to equally divide the property between spouses.
If you want to know whether an asset, debt, income or expenses is separate property, community or quasi community property, the initial questions you may ask and answer are:
- Was the property acquired before or during marriage?
- Was the property a gift or inheritance given for your exclusive benefit or your spouse’s exclusive benefit?
- Was the source of the property separate, community or quasi community property?
- Did you or your spouse sign documents expressly stating you and/or your spouse were changing the character of property from community to separate and/or vice versa?
Evidence commonly used to overcome the community and quasi-community property presumption includes:
- Property deeds
- Car titles
- Financial records
- Estate planning and probate documents
- Written agreements between spouses
That is California community property explained in a nutshell. Simple enough on paper but complicated by the facts of life.
*This is a simplified introduction to California’s community property laws and is not exhaustive.