Property Division Laws in California

What Is Separate Property?

Separate property is not subject to division by the court upon dissolution of marriage or legal separation. In California, separate property is defined by the family code as:

1. All property owned by the person before marriage.
2. All property acquired by the person after marriage by bequest, devise, or decent.
3. The rents, issues, and profits of the property described in this section.
4. The earnings and accumulations of a spouse and the minor children living with, or in the custody of the spouse, while living separate and apart from the other spouse.

Can Separate Property Become Community Property?

There are instances where separate property can become community property or vice versa:

• Commingling: Separate property can become community property if it gets mixed or commingled with community property to the extent that it's no longer possible to separate the original separate property from the community property. For example, if funds from a separate bank account are regularly used to pay household expenses or joint debts, those funds may become community property.
• Transmutation: This occurs when spouses intentionally change the character of property from separate to community or vice versa. For example, if one spouse transfers ownership of their separate property to both spouses jointly or if they use separate property to purchase property titled in both spouses' names, it may be considered transmuted to community property.
• Gifts or Inheritance: While gifts and inheritances received by one spouse during marriage are typically considered separate property, they can become community property if they are commingled with community property or if both spouses use them for the benefit of the community.
• Improvements and Appreciation: If separate property increases in value during the marriage due to the efforts or contributions of both spouses, the increase in value may be considered community property. Similarly, if one spouse uses separate property to make improvements to community property, the value of those improvements may become community property.
• Agreements: Spouses can also agree to change the character of property through written agreements, such as prenuptial or postnuptial agreements. These agreements can specify how property will be treated in the event of divorce and may override the default community property rules.

California Property Division Laws

While California is a community property state, this doesn't necessarily mean a 50/50 split of assets. Instead, the court aims for a fair and equitable distribution based on factors like the length of the marriage, each spouse’s earning capacity, their contributions to the marriage, and their overall financial situation.

Debts acquired during the marriage are generally considered community debts and are subject to division, similar to assets. However, like with assets, there can be exceptions and complexities.

Couples can also draft prenuptial or postnuptial agreements to specify how assets and debts will be divided in the event of divorce. These agreements can override some aspects of community property laws as long as they're deemed fair and legally enforceable.

Ideally, couples should try to reach a mutual agreement on property division through negotiation or mediation. If they can’t agree, the court will intervene and make the final decision.

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