Community Property Rights' Attorney for the Desert Cities

Community Property

California is a “community property” state. All property and assets acquired and debt incurred before physical separation is presumed under the law to be subject to an equal division as between spouses or domestic partners if either decides to end the relationship.

There are significant exceptions and qualifications to this rule. For instance, property owned prior to marriage, or acquired by gift or inheritance during marriage, is usually the separate property of the recipient. 

However, separate property rarely maintains it original form, particularly in longer marriages. It is not uncommon for people to commingle (mix up) their separate property with that of the community or vice versa, or to inadvertently transmute (change the character of, typically by a change of record title) property from separate into community - typically where what was acquired separately now becomes joint by operation of law or the execution of some title transfer document. This commonly occurs with home refinances, where a one party is added to the deed often only because a lender required it or perhaps a party with poor credit is asked to sign off. Even when property is commingled or transmuted, important reimbursement rights under Family Code section 2640 remain available.

Where parties commingle monies, which may be used to acquire and improve existing or new assets, or build up equity with mortgage payments, complicated "tracings" must take place to separate community from separate property, particularly when one party wishes to assert their separate interest, or to be reimbursed for a separate property contribution to the acquisition of a community asset. If a spouse or partner is unable to provide these tracings because necessary documents cannot be found, he or she may lose valuable property rights since the burden of producing evidence usually lies with the "separatizer".

Community property usually, but not always, is divided equally between spouses although obviously some assets are not divisible (i.e., land). California law requires that the net value of assets received by each spouse be substantially equal as long as their has been no breach of fiduciary duty, fraud, or misappropriation by either party. Courts have wide discretion over how to accomplish this, and can award different assets to different parties so long as the marital balance sheet reflects and even overall division. The law also requires that separate property be confirmed to the appropriate party.

People rarely consider the possibility of divorce or legal separation when they marry. They don't seek legal advice about how the character of their separate property might be affected by actions taken during the marriage, and they don't have accurate understandings of the divorce related legal consequences of most financial transactions. This creates costly problems - and a one reason why a knowledgeable lawyer is later required - if the marriage fails, since forensic accountants must often be employed to undertake complicated accountings and the legal issues are labor intensive for lawyers.

Over 50% of first marriages and 65% of second marriages do end by way of divorce. If you are not yet married or a registered domestic partner but intend to be, we urge you consider a prenuptial agreement. This allows you to have some conscious control over your interests and property rights in the event the marriage or domestic partnership unravels. As a practical matter, premarital agreements are usually the only example of intentional as opposed to accidental decisions made with regard to characterization of property that divorce attorneys encounter. If you or your partner are resistant to such an agreement, at a minimum a thorough and paid legal consultation with an experienced attorney will provide pointers that how to jointly undertake marital decison-making.

Contact Palm Springs marital property specialist Thurman W. Arnold
for a consult regarding property issues that may affect your future financial security