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California's Community Property Laws

In the U.S., the states follow the equitable distribution or community property systems in regards to the method of dividing a couple’s marital property.

California is one of nine states, including our close neighbors Nevada, Arizona, and Washington that has adopted the “community property” method of dividing property in a divorce. The rest of the states are equitable distribution states, though Alaskan residents have the option.

The theory behind the community property system is that each spouse has made contributions to the marriage. These contributions don’t have to be financial, they can include raising the couple’s children, and taking care of the home they share.

Under California law, both spouses are automatically entitled to 50% of the community assets in the event of a divorce, regardless of whose name is on the account or title, or who earned the income.

California’s community property laws also pertain to debts. Just as each spouse is entitled to half of the community property, both spouses are responsible for the community debts.

So, if a spouse agrees to take on a marital debt, and he or she fails to pay it during or after the divorce, the creditors can go after the other spouse regardless of what the divorce decree says.

What is separate property?

While community property is subject to division in a divorce, that is not the case with “separate property.” In California, spouses are entitled to keep their separate property, which includes:

  • Property acquired before the marriage,
  • Property acquired during the marriage by gift,
  • An inheritance received during the marriage,
  • A personal injury award acquired by one spouse during the marriage, and
  • Property acquired by one spouse after the termination of the community property estate.

Seven of the community property estates terminate the community estate upon legal separation, change of domicile or death. But, in California and Washington the community estate is terminated upon physical separation, and when both spouses intend to divorce.

The couple’s mutual intent to end their marriage must be established through the spouses’ conduct in order for the court to agree that the community property estate has terminated.

Do you have to follow the state’s community property laws? Not necessarily.

Couples are entitled to reach their own divorce settlement that departs from the 50/50 split theory. However, if the couple cannot reach a settlement, a judge will have to decide on a division for them and in accordance with the state’s community property laws.

Learn more about California’s community property laws, contact a Board Certified Encino divorce attorney from Cutter & Lax.

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