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Understanding How Property Rights Are Determined in California Divorces

Property rights are among the most fundamental parts of U.S. law. Your right to keep your legal private belongings and decide how they are used is the foundation for the national economy.

However, some legal proceedings can alter your rights to your belongings. For example, marriage and divorce can seriously affect your rights over your assets. Without appropriate care, you could accidentally lose control over your hard-earned assets should your marriage end. 

Understanding how California’s property rights laws account for marriages is the best way to avoid this. We’ve summarized the basics of how these laws work in California so you can prepare your assets for whatever the future may bring. 

The Basics: California Is a Community Property State

When two people get married, their property rights as a couple are determined by the laws of the state in which they reside. For California residents, that means they are subject to community property laws. 

In community property states, all assets a couple accrues after they get married are considered joint possessions, with very few exceptions. The state treats marriage as a legal commitment to share your time, skill, and effort with your spouse, making these things part of the community estate. 

As such, anything you earn or any debts you accrue during your marriage are automatically communal assets. So is anything you buy with funds acquired during your marriage. Even intellectual property you create and businesses you start while married are part of the marital estate.

Of course, this is also true of your spouse. You receive joint ownership of their marital income, assets, and debts, and vice versa. Normally, this has little effect on your life. However, determining what counts as communal possessions becomes extremely important if you file for divorce.

Types of Property Ownership in California Divorces

Community property laws do not require you to split literally everything you own with your spouse when divorcing. However, they do require you to divide all communal property equally. But how is that any different?

Not all of your belongings will be communal, even if you were married young. Four total types of ownership may come into play in your split:

  • Community: The majority of assets and debts you and your spouse acquired during your marriage.
  • Separate: Assets you acquired or earned before your date of marriage or after your date of separation and those that fall under exceptions in community property laws.
  • Commingled: Assets that were once separate have been blended with marital assets, such as a retirement account begun before marriage with marital funds deposited into it.
  • Quasi-community: Assets or debts acquired in another state or through an exchange that would have been considered communal if they had been acquired in California.

Most divorces involve community and separate assets, and many involve commingled ones as well. Couples who moved to California from another state may also have quasi-community property. Everything except for separate assets must be considered and divided during your divorce. 

Reasons Property May Be Separate After Marriage

The only items untouched by divorce are your separate assets. They include everything that is not part of the marital estate. There are multiple reasons why an item may be considered separate, even if it was acquired while you were married. Some of the most common causes include:

  • You received it before you got married. If you purchased a house before you got married, for example, it is your separate property until you add your spouse to the title or use marital funds to maintain it. Furthermore, any capital gains, rents, or other income you receive based on your separate belongings remain separate as long as it is not blended with marital assets. For example, if you rent out the house, the rent you receive is considered separate as long as it is kept in an independent account and the funds are not used to support your family. 
  • You received it as a gift or inheritance: Gifts and inheritances given to a specific person remain their separate property, even if they are married. So is the income generated by gifts or inheritances. As with pre-existing separate property, it remains yours alone until and unless you blend it somehow.
  • You had a marital agreement stating it was separate: Prenuptial and post-nuptial agreements can be used to declare certain assets to be separate, even if they would normally have been considered joint. The specific items covered will depend on your particular agreement.
  • You acquired it before your divorce was final but after your date of separation: Community property stops accruing when a couple officially separates, not when their divorce becomes final. For example, if you choose to end your relationship on June 1st, 2023, but your divorce isn’t finalized until April 2024, assets earned after June 1st will still be considered separate.

Learn About Your Property Rights During Divorce

Property rights can be confusing at the best of times. If you have any questions or concerns about how your right to your own belongings may be affected if you get divorced, you should seek legal counsel. Consult with the skilled lawyers at Kaspar & Lugay, LLP, to get detailed answers to your financial questions. Our firm specializes in high-net-worth divorces, so we understand California’s community property laws inside and out. We can help determine if an asset is separate, communal, or commingled. We can also advise you on the best strategies to protect your assets during your split. Learn more about how we can assist you by calling our Marin County family law firm at (858) 295-3146 or sending us a message online now.