The two classifications of property laws that govern marital property in the U.S. are tenancy by the entirety, or “common law,” and community property.
California is a community property state, along with Louisiana, Arizona, Texas, Washington, Idaho, Nevada, New Mexico, and Wisconsin. Marital property in this state is categorized as 1) separate property, 2) community property, or 3) quasi-community property.
Community property is property acquired during marriage while the couple is domiciled in California, regardless of where the property is physically located.
Separate property is property owned by one spouse before the marriage occurred, and property acquired after marriage by way of gift, inheritance, devise, bequest, descent, or rents, issues, and profits.
Quasi-community property is property acquired by either spouse in a non-community property state that would have qualified as community property had the married couple been domiciled in a community property state.
The domicile of a married couple is key in determining which state laws their property will be subject to. Domicile is a person’s legal permanent address. For example, since California is a community property state, if a married couple were to be domiciled in Los Angeles and acquired a second home in Virginia during their marriage, such property would fall under California community property laws.
What should I know about community property?
1) Property acquired with earnings made during the marriage of a couple domiciled in California is almost always community property (CP), meaning that whether your spouse’s name is on the title of the specific asset or not, he or she likely has a CP interest in it.
2) Property received by gift or inheritance is separate property (SP), even if you are married when you receive it.
3) Property owned prior to marriage is SP unless you have improved it with CP, in which case your spouse may have a reimbursable community property interest in the event of divorce.
How do I protect my separate assets in a community property state?
Creating a trust before marriage is one way to distinguish your separate property from your community property, but a prenuptial agreement is the best option.
Happy Planning!
B.B.
The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship. Brittany Britton is licensed to practice law in the state of California only.
