What does it mean when it is said that “California is a community property state”?

Nakos and Nakos, Attorneys at Law

California is a community property state. What this means for those who are married or who are registered partners is that generally any asset acquired during marriage or any debt incurred during marriage by either spouse belongs to both spouses. There are some exceptions, such as gifts, inheritance, things excluded by a prenuptial agreement, things that were transmuted to one spouse by another spouse, etc. Furthermore, in California both spouses contract toward each other obligations of mutual respect, fidelity, and support and each spouse is subject to the general rules governing fiduciary relationships that imposes a duty of the highest good faith and fair dealing on each spouse.

During a divorce or legal separation, the Court is obligated to equally divide the community assets and the community debts between the spouses.

 

Divorce / Legal Separation and Date of Separation

No one gets married expecting to then get divorced or legally separated. Yet, divorce does happen.

If you happen to live in the State of California and are getting a divorce the first thing you must know is that California is a Community Property State. Meaning, that a marriage or the registration of a domestic partnership makes two people one legal “community.” So property that the couple acquires during marriage/partnership is “community property.” And debt that the couple acquires during the marriage/partnership also belongs to the “community debt.”

Property includes, but is not limited to, a house, a car, furniture, clothing, jewelry, bank accounts and cash, security deposits on apartments, pension plans, 401(k) plans, stocks, life insurance policies, a business, or a patent.

Debt includes, but is not limited to, mortgages, student loans, car loans, credit card debts, and signature loans.

Pursuant to California Statute (Family Code Section 2550), which provides that “Except upon the written agreement of the parties, or on oral stipulation of the parties in open court, or as otherwise provided in this division, in a proceeding for dissolution of marriage or for legal separation of the parties, the court shall, either in its judgment of dissolution of the marriage, in its judgment of legal separation of the parties, or at a later time if it expressly reserves jurisdiction to make such a property division, divide the community estate of the parties equally.”, if a couple is divorcing or is seeking a legal separation the court must equally divide the community property and community debt between the parties. This is obviously a very important statute. Therefore, knowing what the “community” is becomes critical and can mean the difference between receiving or losing a large sum of assets or being liable for a large amount of debt.

A key factor in determining  the scope of the “community” is knowing when the community started and ended. This can be achieved by knowing and proving the date of the marriage or the date the domestic partnership started and the date of separation. Knowing the date of marriage or the date the domestic partnership started is easy because this was a big event in your life and as such is easily to remember. Plus, you have a piece of paper telling you when you got married or when the domestic partnership started. Knowing the date of separation is not so easy.

Pursuant to California case law, “[B]ecause rifts between spouses may be followed by long periods of reconciliation, and the intentions of the parties may change from one day to the next … legal separation requires not only a parting of the ways with no present intention of resuming marital relations, but also, more importantly, conduct evidencing a complete and final break in the marital relationship.” In re Marriage of von der Nuell, (1994) 23 Cal.App.4th 730, 736. As such, the courts have held that “Drawing from the relevant judicial decisions, two factors emerge as prerequisites to separation. First, at least one spouse must entertain the subjective intent to end the marriage; second, there must be objective evidence of conduct furthering that intent.” In re Marriage of Norviel, (2002) 102 Cal. App. 4th 1152, 1158. Therefore, in determining the date of separation the parties must proffer evidence to the court supporting a harboring of one party’s subjective intent to end their marriage and, more importantly, objective evidence of their conduct that evidences and is in furtherance of their intent to end their marriage.

From the analysis of what the “community is” the parties, and if necessary the courts, can begin to know what assets and debts need to be equally divided.

On a related note, the date of separation or the end of the community does not mean that a couple is legally separated. Legally separated only occurs when the court issues a judgment saying that the couple is legally separated. Thus, just be cause you have a date of separation or the community has ended does not mean that you are legally separated.