Is California a Community Property State?

Depending on the state they live in, the property acquired by a husband or wife once they are married is considered to be community property. This rule applies unless both spouses have agreed to otherwise. Here is a look at how this works in community property states and how California state law can impact your home.

What Is Community Property?

Community property is that acquired during the marriage. By law, it is presumed to be owned equally by each spouse. As such, the property/community estate must be divided equally at the time of separation. The court must ensure a 50/50 division of community assets and debts in case of divorce or death.

Per the community property definition, expenses are chargeable upon the property of both or either the husband or wife. These expenses can include the education of children and stepchildren. Under the doctrine of community property, spouses may be sued jointly or separately for not meeting their obligations.

In theory, the concept reflects a sharing of property and duties in a marriage. However, community property law has no bearing on personal rights and liabilities of spouses. Marital property is that which both spouses have devoted their resources for mutual benefit; acquisitions and benefits using community-derived labor and resources are shared equally among the community.

Is California A Community Property State?

While most states follow equitable distribution principles, California is a community property state. A couple’s property should be divided equally, according to the law, unless there is a written agreement requiring division of property in a particular manner. A prenuptial agreement is an example.

In California, community property law requires a simple 50/50 split of the net value of assets, rather than dividing up each physical object. The assets must be equivalent in value. For example, one spouse may be awarded the primary residence, and another may receive an investment property or the family business.

How Is Community Property Divided?

A married couple’s joint property includes income either spouse earns during their marriage, any debts acquired during that time, and real or personal property acquired with income, such as homes, vehicles, appliances, or furniture. High-value luxury items are included in this category as well.

Separate property under community property law is that which is owned by a spouse prior to marriage, obtained by a spouse after legal separation, or any property received as a gift or inheritance from a third party. A joint banking account is one example. Pre-marriage debts are considered separate property as well.

Under certain circumstances, separate property can become community property. One or both spouses can accomplish this voluntarily by adding the other spouse’s name to a deed. They can also do so involuntarily by investing community property resources in maintaining or improving a home that one spouse owns separately. A commingling of assets can initiate such a transformation.

A common misunderstanding is that community property means each spouse is liable for the other’s debts. In fact, it is the community property that is liable. When the community, or marriage, ends, each spouse is liable only for their own debts. Any share of community property received becomes that person’s separate property. This is not liable for debts incurred by the other spouse, whether the property is separate and brought into the marriage or becomes so with divorce.

Each community property state has different laws with different perspectives on the matter. Therefore, it is important to have the advice and service of a legal professional familiar with them.

Contact OakTree Law

OakTree Law is knowledgeable in California’s complex real estate market and helping clients deal with community property matters. Clients also rely on our foreclosure, loan modification, business and civil litigation, and bankruptcy lawyers for a variety of different services. For more information, call us at 888-348-2609 or reach out online for a free evaluation.