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California is a community property state. What does that mean?

On Behalf of | Jul 5, 2022 | Divorce

When you came into your marriage you likely had some property of your own, such as a car, electronics or even a house. And you likely had some debts, such as credit card debt or a car loan. Then, during your marriage, you continued to buy more things, earned an income and took on further debts. What happens to all these assets and debts, then, if you divorce?

Separate property versus community property

Under California law, separate property and debts are anything you bought, earned or obtained prior to marrying. They belong to you and unless you agreed otherwise in a prenuptial agreement, they will remain yours if you divorce. They will not be included in the marital estate.

Community property and debts are anything you bought, earned or obtained while you were married. It does not matter who bought the property, who earned the money, whose name is on the title or who took out the debt.

With some exceptions for inheritances and gifts and in the absence of a prenuptial agreement stating otherwise, both you and your spouse have an equal ownership interest in community property and an equal obligation to fulfill community debts.

Community property laws

California is a community property state for property division purposes in a divorce. This means that all marital property and marital debts will be divided as evenly as possible between you and your spouse in a divorce. Separate property and debts belong to the person who brought them into the marriage, unless a prenup says otherwise.

Sometimes, separate property “commingles” with community property. This simply means that the separate property mixed together so much with the community property that it is no longer possible to trace back its roots to its separate nature. For example, you may use separate money in a bank account to put a down payment on a home, but you then use a joint bank account to pay the mortgage and improve the home.

Property division can be a sensitive topic in a divorce. People get attached to certain pieces of property and no one wants to take on an unfair amount of debt. California’s community property division laws are designed to address these concerns and split assets and debts relatively evenly when you divorce.