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Community Property vs Separate Property

Community property is defined as all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in California except as otherwise provided by statute.

This includes debts acquired during the marriage.

Community Estate

  • Property acquired during marriage.
  • Debt acquired before or during the marriage. Family Code §§ 910 & 902.

COMMUNITY PROPERTY IS SUBJECT TO EQUAL DIVISION BETWEEN THE SPOUSES ON DISSOLUTION OF MARRIAGE OR LEGAL SEPARATION. Family Code § 2550.

Separate Property

Separate property is defined as all property owned by a spouse that is not community property. Specifically, the following property is separate property:

  • All property owned by the person before marriage;
  • All property acquired by the person during marriage by:
    • Gift
    • Bequest
    • Devise or
    • Descent
  • All rents, issues, and profits of the foregoing property.
  • All earnings and property acquired after separation is separate property.

SEPARATE PROPERTY IS NOT SUBJECT TO EQUAL DIVISION BETWEEN SPOUSES. UPON DIVORCE, SEPARATE PROPERTY IS AWARDED WHOLLY TO THE SPOUSE.

Date of Separation

Parties are deemed to be separated when they are living “separate and apart.” This is a term of art which means that the parties physical separation is the result of a breakdown in the martial relationship. Living separate and apart does not refer to a case where spouses live separately for economic or social reasons, but only when the spouses have come to a parting of ways with no present intention of resuming relations…a complete and final break in the martial relationship.

Separation requires two elements which must be present simultaneously:

  • One spouse must have the intent to end the marriage; and
  • There must be objective evidence of conduct furthering that intent (ie moving out)

Date of Acquiring An Asset

In it’s most basic form, property acquired before marriage is separate property.

Property acquired during marriage is community property and subject to equal division among the parties.

Title of Asset

The form of title of how an asset is held is a factor in determining if an asset is community or separate property.

For example, a house title may be held both parties, as husband and wife (community property presumption) or it may be held solely by one party, as their separate property (separate property presumption).

Commingling of Separate and Community Property

The mixing of separate and community property (ie into a bank account) into one does not destroy the character (ie separate or community) of the property as long as the separate property and community property can be ascertained. This is known as tracing.

However, if the property is so commingled that the separate and community components cannot be identified and traced, there is a presumption that the property is community property.

Thus, it is important to keep separate accounts separate and not mix them with community accounts.

Reimbursement Issues

A party may be required to reimburse another party in the following situations:

  • Reimbursement for one spouse’s unauthorized use of community property to improve separate property
  • Reimbursement for payment of certain separate debts
  • Reimbursement for contributions to the education and training of a party that substantially enhances the earning capacity of that party
  • Reimbursement for a spouse’s exclusive use of a community asset between the date of the parties’ separation and trial
  • Reimbursement for qualifying post separation payments on preexisting community debts (Epstein Reimbursement)
  • Reimbursement for qualifying post separation improvements to community property
  • Reimbursement for amounts used to satisfy other spouse’s pre-separation debt for necessaries of life or post-separation debt for common necessaries of life when nonexempt community property or the other spouse’s separate property was available
  • Reimbursement to separate or community property depending on the nature of the activity being performed for property used to satisfy a liability arising out of tortious activity by a spouse
  • Reimbursement to a spouse who makes contribution from community property to the acquisition of property in the other spouse’s separate estate.

Pension and Retirement Benefits

Pension or retirement benefits attributable to service during the marriage and before separation are community property.

Pension or retirement benefits attributable to service before marriage or after separation are separate property.

A QDRO, Qualified Domestic Relations Order, is required to transfer or divide a pension or retirement account.

Debts

Generally speaking, the same rules above apply to debts.

Debts acquired during marriage are community debts and subject to equal division among the parties.

Debts acquired after separation or before marriage are separate debts and the sole responsibility of the spouse who acquired the debt.

All information on this website is for information purposes only. This website and the information herein should not be construed as legal advice and should be relied on without first consulting with counsel.

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