There are a lot of misconceptions about community property laws like those that often come into play in California divorces. First off, even among the relatively few community property states, no two are exactly alike.
In California, community property refers to “marital property.” Most property acquired by either or both spouses during the marriage is considered marital property and subject to a 50/50 division under the law. This includes things like:
- All income earned by either spouse during the marriage (including wages, interest, dividends and capital gains)
- Assets in retirement accounts
- Property acquired during the marriage and paid for with income earned during the marriage
The same 50/50 division is used for debt acquired during the marriage.
Note that it generally doesn’t matter whether an asset was paid for primarily using one spouse’s income or assets. It’s still marital property. Even if only one spouse’s name is on a title (like the title to a home), if it was paid for using marital assets, it’s marital property.
You and your spouse can work out your own property division
It’s important to clarify that spouses can work out a different property division agreement without asking a judge to decide it. Further, if you have a prenuptial or postnuptial agreement that addresses property division, that will override the community property mandates as long as the agreement is considered valid. For example, it can’t give one spouse everything and the other nothing. The same is true for any property division agreement you negotiate.
What is considered separate property?
Separate property isn’t subject to the 50/50 division rule. This includes assets owned by one spouse before the marriage and gifts and inheritances given to one spouse.
Note that if this separate property has been commingled with marital property or the other spouse’s separate property, it becomes subject to the 50/50 division. For example, if you inherited money and then deposited that inheritance into your joint bank account, it’s no longer separate property.
It’s a lot to think about. All divorce-related laws can be complicated, but California’s community property laws can be particularly confusing. Having experienced legal guidance can help you protect your rights and interests throughout the divorce process.