What is Community Property?

Often clients are surprised to learn how Community Property rules work in California. I understand the surprise, because some of the rules can be counter intuitive. This post explores some of the basics of Community Property. It is best to consult with a Family Law Attorney if any of these examples sounds familiar because you may have more interest in financial or real property that you first suspect. 

Here are some examples of situations where the result may not be obvious.
First, unless there is a specific contract that states otherwise such as a pre-marital agreement, all income earned by either party during the marriage is Community Property. This means that even if you have a separate bank account for your salary or a 401k with your company, these accounts are community property and should be divided equally upon dissolution.

Second, any real or personal property owned by one spouse “Amy” before the date of the marriage is Amy’s separate property.  However, any funds that are used to enhance the Amy’s property may be considered Community Property at dissolution.  So if Bob and Amy contribute 1 million dollars during marriage to remodel their home, the increase in appraisal value may be community property. 

Third, any property received by one party “Bob” after the date of marriage as a gift, bequest, or inheritance whether from Amy or another person is Bob’s separate property. This means the money given from your great Aunt is not part of the Community. 

Fourth, if Amy has a successful architecture business prior to marriage, the underlying value of that business remains separate.  However,  all increase in value and profits that are attributable to Amy’s efforts are community property.  

If any of these scenarios sound familiar, you should speak to a family lawyer about your case. You can contact me at Amanda@gordonfamilylaw.com for more information.