Community Property

California is a community property state. Simply put that means all assets acquired durring the life of the marriage are presumed community property. All assets acquired before marriage or after permanent physical separation are presumed separate property. In addition, all assets acquired by gift, bequest (inheritance) or devise, are separate property. In addtion, all assets acquied while domiciled in another state that would be classified as community property in California will be presumed quasi-community property in California, and the same California community property rules apply. In order to determine the character f the property we trace back to the source of the property to determine if the property is community property or separate property. A change in the form of the asset does not change the characterization of the property. With these principals in mind we begin to assess the the character of the property which is in issue in the community property disputes. The problems usually arise when there is a commingling of assets. Below please find some common analysis regarding the commingling of different types of property.

Business owned before marriage:

a. Van Camp/Pereira Accounting

i. Van Camp applies if the character of the Separate Property business was the major cause of the increased value of the business.

ii. Pereira applies if the Community Property labor was the cause for the increased value of the business.

Separate Income in a Community Account:

Tracing

i. Direct-if it is possible to trace the exact money directly in the account (e.g. if it was deposited just prior).

ii. Family expenses-when funds have been withdrawn from the commingled account it is presumed the Community Property was used first to pay family expenses.

1. Cannot use recapitulative accounting.

Disability, Retirement, Severance Pay

a. Community Property to the extent earned during marriage and designed to replace earnings during marriage, Separate Property to the extent designed to replace place post-separation earnings (must be permanent separation with the intent not to return or divorce)

Real property taken in jointly where one party contributed Seperate Property interest:

a. Pre-1994

i. Separate Property portion-gift to Community Property presumed (no reimbursement).

b. 1994-1996

i. Community Property presumed (difference here is presumption applies to joint title).

c. 1996 to date

i. Community Property can be rebutted only by a statement in documentary evidence of title that it is Seperate Property and not Community Property (difference here is that presumption applies to all property taken jointly). 1. Seperate Property portion is reimbursed without interest.

Tort Recovery:

a. Separate Property if one spouse recovered for a tort from the other spouse.

b. Otherwise Community Property during marriage-Saperate Property upon divorce/permanent separation.

Separate Property Home that was improved with community funds:

a. Apportion Separate Property interest. Spouse may be entitled to reimbursement for downpayments, improvements, and principal.

Community Property home improved with Seperate Property funds:

a. Gift of presumed when the Seperate Property spouse uses his/her Seperate Property to improve.

b. No gift presumed if uses the other spouse’s Seperate Property without permission.

Education loans:

a. Separate property of the debtor-spouse and must reimburse the community for any loans paid by the community.

i. Exceptions:

1. Other spouse received a community-funded education.

2. It has been at least 10 years.