“What’s mine is yours” is a common phrase people use when referring to marital property. You might have said it yourself. Depending on your specific point of view in a divorce, the phrase can be either comforting or a bit frightening.
California is a “Community Property” state, which means the principle applies, but it is not absolute. Let’s take a look at some of the basics of the community property theory.
What is property?
You might think of property in terms of real estate, such as your house, or physical items that can be bought or sold, such as the car, furniture or clothing, but it is more than this as well.
Anything that has monetary value is considered property, such as pension plans, 401k accounts, security deposits, businesses, patents, stocks, and cash value life insurance policies. It can even include season tickets to sporting events or vacation time-shares.
Community vs. separate property
When deciding what is community property and what isn’t, you need to ask three questions:
- Who bought the property?
- When did they buy it?
- Where did they get the money?
Generally, anything that either person in a married couple earns or debt they acquire from the day they are wed to the day of their separation is considered community property or community debt.
Anything that either or both spouses buy with their post-marriage earnings is also considered community property. This means the new throw pillows you bought for the couch that came out of your paycheck belong to you both, or the “community” that was created when you were married. The same thing goes for household vehicles or the house itself, if it was purchased entirely with money earned since you said “I do.” The actual name on the deed or mortgage is not determinative.
Separate property is that which one spouse acquired outside of the marriage and was not paid for with “community” earnings. This means if you used the birthday money your mother gave you to buy the throw pillows for the couch, they could be considered your separate property, as can anything you bought before you were married, or debt you acquired.
Separate debt is treated in much the same way as separate property. If you acquired debt after the marriage began, even if it was only in one person’s name, it becomes a shared responsibility under community property laws.
Co-mingling property and drawing the line
Like many laws, there are exceptions, and sometimes the line between what is considered community property and what is separate property can get a little fuzzy.
Let’s say you owned your own home prior to your marriage and sold it during the marriage. You then used some of the money you received from the sale on a down payment to purchase a new home together after you were married. The equity in the home is considered a mix of community and separate property.
Many accounts can become co-mingled as well. If you had started saving in your 401K for several years before tying the knot, those early contributions would be separate property, but any added value to the account since the marriage would be considered community property.
In many cases, a couple’s separation comes on gradually. Some find it hard to define their date of separation, but it is important that you do this. Even though you and your spouse are still married until your divorce is final, you are only bound to the restrictions of community property laws until your date of separation.
After this point you and your spouse are entitled to all of your income, minus any spousal or child support you are providing. You are also responsible for any debts you acquire after that date. This protects both spouses from having to pay for the other spouse’s “new life” after the split.
At the Law Offices of Ashley Philpot Mattos in Tulare, California we work hard to help both our clients from across the state with a variety of legal issues involving family law, civil litigation, and criminal law.
Depending on the client’s needs, we can take on a full case or help with a single aspect of the case, such a property division. A free consultation is often the first step in determining the best way to proceed.