Knowledgeable Family Law Representation

Just what does community property mean for a California divorce?

On Behalf of | Jun 13, 2024 | Divorce |

If you’re considering divorce or your spouse has announced their intention to divorce, you likely already know that California is one of a relatively small number of “community property” states – each with its own laws around divorce and property division. 

Most people think “community property” means that a divorcing couple has to divide everything “50-50” because they share all of their property. That’s not necessarily true. It’s more nuanced than that. Further, if you have a prenuptial or postnuptial agreement where you’ve already designated how assets and/or debts will be split in a divorce, that supersedes the state community property law – assuming the agreement is valid.

What assets are community property in California?

Community property refers to marital property. That’s the property acquired by either or both spouses during the marriage (with a few exceptions like individual inheritances and gifts). 

It includes income earned by either spouse during the marriage (wages and bonuses as well as interest, capital gains, dividends and retirement account and pension earnings). It also includes any assets purchased during the marriage by one or both spouses with income earned during the marriage. That’s the case even if only one spouse’s name is on the title – for example, with a home.

The role of “commingling”

Commingling can be a big factor in determining whether something is community property. For example, if one spouse received an inheritance from their parents and deposited it in a joint bank account or used it to renovate a jointly owned home, those funds have been commingled and can be considered community property for purposes of division. 

Commingling can also occur when marital assets are used to maintain or upgrade a property that one spouse owned prior to the marriage. An example would be if a person kept their old condo when they got married, but they paid homeowners’ dues out of their joint account and shared in the rental income it brought in.

Even if a couple doesn’t have a prenup or postnup, they can work out their own property division agreement when they divorce that doesn’t have to follow the law. However, a judge will still have to approve it, so it needs to be fair, or at least agreeable, to both spouses.

It’s a lot to consider. It’s crucial to protect your rights and understand the law. Getting experienced legal guidance as early as possible can help you do both.