Rizio and Nelson California Law Blog

California is a state that applies “community property”, sometimes called “marital property”, laws. This means that any property acquired during the marriage belongs to both spouses. It does not matter if one spouse worked and one did not. The state divides the property equally between both parties if the marriage ends in divorce because it is assumed that they both contribute to the marriage equally, even though how they contribute may be different. Johnny Carson’s third divorce, for example, awarded Joanna Holland 20 million dollars even though Carson earned nearly all of the couple’s income.

In the event that one spouse dies, the community property law still applies in that one half of it goes to the living spouse and the rest goes to the estate of the spouse who died. In this case, it is very important to have an estate planned so that the judge can make an informed decision when he or she decides the case.

Sometimes this law can be confusing. If a title to property is in the name of only one spouse, it can still be considered community property and the value of it is still divided. The reason for this is that the wages that were used for payments toward the property are community property. For example, a couple purchases a boat together, but they choose to put the title in only the husband’s name. Upon their divorce, the judge still has the power to grant half the value of the boat to the wife because it was purchased during the marriage and the funds used to pay for it came from both their wages.

Community property laws apply to debts as well as to earnings and property. Couples are considered to be equally responsible for debts. Another celebrity example is Debbie Reynolds, who, after divorcing her second husband, Harry Karl, found herself responsible for half of his gambling and bad investment debts.

Any property acquired both before the marriage and during legal separation is not included in the community property and is awarded to the person who purchased them. The only exception to property acquired during the marriage is property that was given as a gift or as an inheritance to one spouse only.

California also has a law that governs quasi-community property:
“all real or personal property, wherever situated, acquired before or after the operative date of this code in any of the following ways: (a) By either spouse while domiciled elsewhere which would have been community property if the spouse who acquired the property had been domiciled in this state at the time of its acquisition. (b) In exchange for real or personal property, wherever situated, which would have been community property if the spouse who acquired the property so exchanged had been domiciled in this state at the time of its acquisition.”
This means that if the couple lived in an equitable distribution state before they lived in California, all the property acquired during that period of time is also considered to be community property. Also, if one spouse moved out and the couple was not yet legally separated, that property is also considered to be community property.

These laws can be very confusing. Contact the experienced lawyers at Rizio and Nelson so that you don’t have to go through the process of dividing property alone.