California community property explained

Community property explained

You and/or your spouse own a house, cars, life insurance policy, retirement accounts, pensions, furniture, and other assets. You also have income, debts, and expenses, and want to know if they’re separate or community property. Legally speaking, you want to characterize the property, but let’s start at the beginning.

Absent valid agreement between the spouses or domestic partners, the property rights of California domiciliaries, those who reside in California and intend to remain here indefinitely, are governed by California’s community property law. Generally, this includes California Family Code Sections 750, 760, and 770.

California community property law controls the characterization of a domicile’s real or personal property where ever located.

If a couple is domiciled in California and acquires an out-of-state asset, California community property law controls.

If a couple acquires an asset while domiciled in California then moves to a common-law state, the community property interest stops accruing on the date the couple changes their domicile. If they subsequently separate legally or divorce in the common law state, it’s laws will control, which could make this rule of law irrelevant.

If a couple acquires property in a common law state then moves to California, the property retains its common law character and doesn’t necessarily become community property. If, however, the couple legally separates or gets divorced in California, the property is deemed quasi-community property and treated exactly as community property if it would have been community property if it was acquired while the parties were domiciled in California. (California Family Code Section 125)

Except as otherwise provided by law or valid agreement, all property acquired during marriage, while domiciled in California, is community property. (California Family Code Section 760) The statutory exceptions are:

  • Separate property acquired during marriage (California Family Code Section 770(a))
  • Earnings and other property acquired while “living separate and apart” or after a comprehensive Judgment for Legal Separation is entered (California Family Code Sections 771(a) & 772)
  • Community property transmuted to separate property. (California Family Code Section 850 et seq.) Property is transmuted if “the spouse whose interest in the property is adversely affected expressly declares, joins in, consents to, or accepts the change of character in a signed writing”. (California Family Code section 852(a))
  • Some personal injury awards (California Family Code Section 781)

Use this community property worksheet to gather facts necessary to determine if the house is community property in California.

If you’d like my help characterizing assets, debts, income or expenses as separate or community property, call Laura at 415-968-3028 or complete the form below and schedule a consulting-coaching session.

 

 

 

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