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Articles on Divorce: Legal

Facts About Community Property
by Dean M. Schreyer

Definitions: What Is "Community"? What Is "Property"? What Is "Community Property"? The concept of community property often escapes the understanding of lawyers as well as non-lawyers. Here is a humorous but effective way to begin to explain it in a way that most people might understand:

What is a "Community?"

Once upon a time there was an imaginary fairyland called California Family Law. Here in this land of myth and magic, when two people get married, POOF! They suddenly cease to exist and a new entirely imaginary animal comes into being called the "Marriage." This "Marriage" animal is also called the "Community.

"What is "Property?"

As we travel further into this imaginary fairyland called California Family Law, we discover that some words have new or twisted meanings. For example, "property" refers not only to assets, but also to debts. Fortunately, the words "assets" and "debts" still appear to retain the meaning they have in our world. Assets still include such things as: Money; real estate, personal items and just about any other right, option or thing that has value. Debts still include such things as: Outstanding loans, duties to perform under a contract and any other obligation.

What is "Community Property?"

If one of the spouses acquires an asset, well, that would be impossible, of course, because the "spouse" no longer exists. Only the Community exists. Therefore, if either spouse acquires an asset, it is really acquired only by the Community.

The same rule applies to debts or obligations acquired by a spouse. Since the spouse no longer exists, the Community, not the spouse, acquires the debt or obligation.

Community Property in California: How Long Does It Last? What Happens After It Ends?

The Community begins at the instant the spouses are legally married. The Community never begins before that even if the parties were living together. Unfortunately, all good things eventually come to an end and Community animals are no exception.

The Community ends either when, one of the spouses dies;

or, the spouses begin living separate and apart forever, in anticipation of divorce, whether or not the divorce has become final. The day divorcing spouses begin living separate and apart forever is called the "date of separation." This is not the same thing as a "legal separation."

What Happens to the Community Property after the Community Ends?
When divorcing spouses begin living separate and apart forever, the Community no longer exists. Therefore, any asset or debt acquired thereafter by one of the spouses belongs exclusively to the acquiring spouse. As to the assets and debts still "owned" by the Community, California usually requires the divorcing spouses to distribute this community property evenly between them.

Community Property in California: Major Exceptions to the Rules

Some of the major exceptions to these community property rules are as follows:

Assets and debts acquired by one of the spouses are the separate property of that acquiring spouse,

if, the asset or debt is acquired before the spouses were legally married;

or, the asset or debt is acquired after the spouses begin living separate and apart forever, in anticipation of divorce, whether or not the divorce has become final;

or, the asset is acquired during the marriage from someone other than one of the spouses but the asset is a gift or inheritance to the acquiring spouse individually rather than to both spouses;

or, one of the spouses gives a gift to the other spouse, which is of a "personal" nature and which has a relatively small value, such as jewelry or clothing;

or, one of the spouses signs a document which clearly reflects that spouse's intent to convert that spouse's share of an item of community property into the separate property of the other spouse.

Separate property assets are assumed to be community property, and the spouse arguing for separate property status has the burden of proving otherwise,

if, the separate property assets are commingled with community property assets, such as inherited funds which are placed in the same bank account as are community funds;

or, title to a separate property asset is changed to any form of joint title in the name of both spouses, such as title to a house acquired before the marriage that is placed in the name of both spouses in order to get refinancing.

Property Acquired by Spouses While Living Outside of California in a Non-Community Property State

What happens if the divorcing spouses previously lived outside of California and acquired assets and debts while they lived in a non-community property state?

If, the divorcing spouses previously lived outside of California;

and, they acquired property during that time;

and, that property would have been community property had the spouses acquired it while living in California;

then, that property is called "quasi-community" property and that property is distributed as if it were community property.

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