In California, the division of property made upon a divorce is based on community property laws. The community property law system is based on the principle that the efforts of each spouse contribute equal to the accumulation of wealth during marriage. Thus, unless there is an agreement between the spouses that states otherwise, all property acquired during marriage by the labor of either spouse is community property that is owned equally by both spouses. The California community property system also applies to California registered domestic partners as codified in Cal. Fam. Code sections 297-299.6.
To understand this more clearly, all property acquired by married persons while domiciled in California falls either into the community property or separate property category. To determine whether property falls into either the community property or separate property category, it must be properly characterized. Characterization is the process of determining whether a particular asset is community property or separate property. Generally, to determine the characterization of an asset, the court addresses the following issues:
- When the asset was acquired;
- How the asset was acquired (what is the source?)
- Is there a legal presumption that may affect the character of the asset?
- Did either or both spouses change the asset’s character?
As to the first prong, community property may be acquired only during the existence of the marital economic community. Thus, property owned before marriage is separate property unless one or both spouses have transformed it into community property. See Cal. Family Code section 770. Additionally, all property, whether real property or personal property, acquired during marriage while domiciled in California is considered community property even if it is not in the state of California. Cal. Fam. Code section 760. This means that any property acquired by the couple at the time they lived in California, regardless of location, will generally be considered community property.
As to the second prong, the following sources are generally not considered community property:
- Property received by gift, bequest, devise, or descent. Cal. Fam. Code section 770;
- The rents, issues, and profits of separate property. Cal. Fam. Code. Section 770; and
- Property acquired in exchange for separate property.
However, proof that an asset was acquired during marriage only raises a presumption that the asset is community. The separate property proponent may overcome the presumption by (i) showing that the property was acquired by gift or is the fruit of separate property, or (ii) tracing the acquisition back to a separate property source.
If you are going through a divorce and need help from a divorce attorney then contact a family law attorney at Rodriguez Lopez, APC. Rafael Rodriguez worked as a family law staff attorney in Fayette County Circuit Court for the Hon. Lucinda Masterton, Chief of the family law division in Fayette County. Schedule an Appointment today.
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