California Community Property Law

California Lawyers Manage Community Property Disputes

NEWPORT BEACH ATTORNEYS PROTECT YOUR PROPERTY RIGHTS DURING DIVORCE

California is known as a “community property” state. When you divorce or legally separate from your spouse or domestic partner, the law directs that the marital estate, which consists of virtually all property and debts acquired during the marriage, should be divided equally between the two parties. Parties seeking to hold onto certain assets, or distance themselves from certain debt, must prove that those assets or liabilities are not part of the marital estate. O’Leary & Shenasan Law in Newport Beach, California is well-versed in community property law. Our experienced and knowledgeable team can provide the legal guidance you need in your property settlement or litigation.

UNDERSTANDING COMMUNITY PROPERTY IN CALIFORNIA

Property comprises tangible assets, such as houses, cars, boats, and clothing, as well as intangible assets, such as copyrights, patents, and trademarks. Financial instruments, such as contracts, stocks, and life insurance, are property, as are a couple’s liabilities: mortgages, credit card balances, and car loans. There is a presumption that all property acquired during the marriage, as well as separate property held jointly and used by both spouses, is community property subject to a 50-50 division upon divorce.

However, there are legal exceptions that allow a party to assert that property does not belong in the marital estate and is not subject to division. These exceptions include:

• Assets acquired before the marriage: Community property law does not apply to property acquired before the marriage and kept separate during the marriage — for example, personal savings you kept in a separate bank account throughout the duration of the marriage.
• Inheritances and gifts made specifically to one spouse: The law provides that this type of separate property acquired during the marriage remains separate unless the receiving spouse allows it to be placed in the marital estate.
• Items covered by prenuptial agreements: Couples with prenuptial agreements can avoid community property law by setting forth their own terms in writing before marrying or entering into a domestic partnership.

On the other hand, property that is separate when acquired can become community property under California law:

• Quasi-community property: When a spouse takes up residence in another state and acquires property outside of California, that property might be separate. But, when that spouse returns to California to file for divorce or separation, California property laws apply. The California court may find these assets are “quasi-community” property and divide them equally.
• Commingled separate and community property: When a spouse takes separate property, especially a fungible asset like cash, and places it in a pool of marital assets, the court may decide it is no longer possible to separate the pool into two categories of assets, and assign the entire pool of assets to the marital estate.
• Pension plans: A pension plan or retirement account started before the marriage does not remain entirely separate, if contributions continued to be made throughout the marriage. Contributions made before marriage may be considered separate property while those contributions made during the marriage are almost certainly community property. The court can issue a QDRO (Qualified Domestic Relations Order) to divide the pension plan appropriately.

Any mistakes in the designation of assets as separate or community property can be costly, so it is important to obtain knowledgeable legal advice to ensure division is handled fairly for all.

For better or worse, California law makes married couples “one community” for purposes of property division. Our experienced attorneys are determined to protect your property rights and secure your financial future.

Contact An Axperienced California Community Property Attorney

Your property settlement is one of the most important factors affecting your financial future. O’Leary & Shenasan Law protects your property rights throughout the divorce process. Call us at (949) 825-5224 or contact us online to schedule a consultation.