Whether you are getting ready to file for divorce, or already have, you probably have seen or heard the words “community property” and “separate property” many times. These are common family law terms that parties will need to understand throughout their proceeding for dissolution. Pursuant to Family Code section 760, “Except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property.” This statute is followed by Family Code section 770, which states, “Separate property of a married person includes all of the following: (1) all property owned by the person before marriage, (2) all property acquired by the person after marriage by gift, bequest, devise, or descent, and (3) the rents, issues, and profits of the property described in this section.”
Put another way, in California all assets purchased during marriage are presumptive community property unless they can be traced to a separate property source, such as inheritance. If a person acquires property before marriage, or after the date of separation, that is also considered the separate property of that party. It is important to understand the difference in community and separate property. Sounds simple enough, right? Not so fast. Sometimes it is difficult to prove whether assets are community or separate.
For example, say one party receives a large inheritance during the marriage. Since the property was received during the marriage it is presumptive community property. Therefore, it is the burden of the spouse who received the inheritance to prove that the property acquired was his or her separate property. In the best case scenario, when the party received the inheritance he or she would have deposited it into a separate account in his or her name alone. This is the best way to track the inheritance funds and ensure that they remain the separate property of the receiving party. It gets tricky, and much more difficult, to prove that the funds received were separate property inheritance if the receiving party co-mingled (or mixed) those funds with community dollars (such as depositing the inheritance into a joint account.) Tracing these comingled funds can be extremely expensive and sometimes impossible.
It is important to understand the difference between community property and separate property. Discussing the facts of your case with an experienced family law attorney will help you determine which assets are community and which are separate.
If you have any questions, please call 858-793-8884