California Family Code 760; Community Property

California Community Property Laws Explained

Most couples who enter wedlock in California understand that it is a community property state. However, they do not know exactly how that affects them should they ever divorce. California community property law states that when two people decide to get married, they essentially become one legal community, and any property acquired during their marriage is commonly known as community property.

In case of the dissolution of marriage, marital property will be divided equally, unless there was a prenuptial agreement. All the assets, inclusive of stocks and real estate that were acquired during the marriage are presumed to be community property under California law.

It is essential to understand the difference between separate property and community property. Separate property includes any property that was owned by either spouse before they were married, property that was acquired by one spouse by gift or bequest, and property that was acquired with separate funds. A couple cannot share separate property in case of a divorce.

Some property may become commingled during marriage. For instance, if a spouse had their own home before they married, but sold it and used the proceeds toward the marital home that is separate property. If there is a mortgage on the house, the resulting equity in the home is community property.

California community property discussions tend to focus on divorce. However, the laws also come into play when one spouse dies. Assuming that the spouse left a will, they can only transfer half of the marital community property to other parties. The surviving spouse will still own the remaining half. In case the spouse dies without a will, or intestate, that is where problems can arise. California laws of intestate succession, or who is entitled to the property of someone dying without a will, grant the late spouse’s property entirely to the surviving spouse only if there are no surviving children, grandchildren, or other members of the immediate family.

While community property is the law in the golden state, there are ways for married couples to avoid it. Couples who have not yet wed can use California prenuptial agreement, also known as a premarital agreement, as an answer. Couples who are already married may enter into an antenuptial agreement, also known as a marital agreement, and these agreements spell out what belongs to each member of the couple. 

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