Is California a Community Property State?

Is California a community property state? Yes, California is one of nine community property states in the U.S. This means if a married couple divorces in California, community property state law says they must equally split assets acquired during their marriage.

If you're considering marriage or divorce in this state, it's important to understand California community property laws and how they could impact the division of your marital property.

We'll explore this law in depth and discuss the differences between community property, separate property, and quasi-community property in this state.

What is community property in California?

According to California's community property laws, community property is all assets and debts acquired during the course of a marriage. Therefore, both parties have equal ownership of the accumulated marital property, regardless of whether one spouse contributed more or less to it.

Community property refers to anything you earned or bought during the marriage, including income, bank accounts (including separate bank accounts), retirement accounts, pension plans, and stocks, along with real estate, vehicles, furniture, valuables, and even businesses formed during the marriage. Debt accumulated during the marriage, like a student loan, is also considered community property, even if the debt is in your partner's name.

If you and your spouse divorce, community property law says you must split those marital assets 50/50. The same community property rules apply if one of you dies, as half of the community property generally goes to the surviving spouse, regardless of what's stated in the will.

Now, there are some exceptions to community property in California. Inheritance and gifts received during the marriage do not get divided equally. For instance, if your late mother left money to you in her will or if your sister gave you a diamond bracelet for your birthday last year, your spouse wouldn't be entitled to either because inheritance and gifts are considered separate property.

What is separate property in California?

Everything you own is not necessarily equally divided between you and your spouse. Some of your assets may be sole and separate property.

A spouse's separate property refers to the assets and debts they acquired before their marriage or after their legal separation. As previously mentioned, separate property also includes gifts and inheritance, regardless of when you received them.

During a divorce, separate property generally does not get divided. For instance, if you took out a car loan before you met your spouse, that debt would remain with you. The same goes for the money in your savings account that you earned before you entered your marriage---you would not have to divide up that money.

Now, if you or your spouse dies, separate property remains separate even after death. This means the surviving spouse is not necessarily entitled to their spouse's separate property unless otherwise stated in the decedent's will. Therefore, if the decedent's separate property was bequeathed to other people, then the surviving spouse doesn't have any rights to it.

Quasi-community property in California

With a better understanding of community property vs. separate property, let's discuss quasi-community property. Quasi-community property refers to assets or debts you and your spouse acquired during your marriage while living in another state before relocating to California. For example, maybe you purchased a car together while living in Virginia.

Under California law, that property, known as quasi-community property, is usually treated as community property, even though it's property acquired out of state. Therefore, it is usually divided equally between the couple during a California divorce, meaning the car you purchased in Virginia would be evenly split under California's community property laws.

How a prenuptial agreement can help

While no one wants to think about divorce before they've even gotten married, it's important to consider the implications of California community property laws and how they could impact your assets if you and your partner split up. If you're concerned about what it might mean for your own property, you may want to get a prenuptial or postnuptial agreement.

These agreements let you override community property laws and predetermine how you and your spouse want to divide your assets and debts in the case of death or divorce. However, your agreement must be valid and compliant with California laws to ensure that it's enforceable.

With our prenuptial services, you can work with an attorney who will guide you through the process and help you draft a legally sound contract. Enjoy peace of mind knowing your assets are protected no matter what happens in your marriage.

FAQs

Follow along to find out more about community property rules.

Do you have to follow community property law in California?

No, you and your spouse do not need to follow California community property laws if you can both agree on how to divide the property acquired during the marriage. You can settle outside of court and create your own separation agreement.

You can also bypass community property rules if you and your spouse create a valid prenuptial or postnuptial agreement. Having one of these agreements lets you override community property laws and divide your community assets however you decided in the contract.

That said, if you and your spouse can't agree on how to divide your property and do not have a prenuptial or postnuptial agreement in place, then community property rules apply.

Does community property automatically transfer to a spouse after death?

Generally, a surviving spouse is entitled to 50% of the community property, just as they would be if the couple were to divorce. Even if the decedent's will says otherwise, California property law decides half of the community property must go to the surviving spouse.

However, the surviving spouse is not necessarily entitled to the decedent's separate property. The decedent's will usually determine what happens to their separate property.

Do unmarried partners have community property rights in CA?

It depends. While some states recognize common law marriage and extend community property laws rules to unmarried cohabitating partners, California is not one of them. That said, unmarried couples can make contracts deciding how to divide the property acquired during their relationship and file a civil lawsuit, called a Marvin claim, to uphold those agreements in court.

What is a community property state?

A community property state is a state that has laws governing how marital assets are split during a divorce. These laws differentiate between separate and community property and determine how they are divided.

So, is California a community property state? Yes, California is a community property state. Other community property states include Arizona, Idaho, Louisiana, Nevada, New Mexico, Washington, and Wisconsin.

What is the main difference between separate and community property?

Separate property refers to any property or debts incurred before your marriage or after your legal separation. You and your spouse's separate property does not get split up during the divorce. In contrast, community property is marital property acquired during the marriage. Under the California community property law, these shared marital assets must be divided evenly in the divorce.

How is community property divided?

According to California's community property law, community property is split 50/50 between the two parties in a divorce, unless the couple established a pre- or postnuptial contract or separation agreement.