Community Property FAQ: Answers to Common Community Property Questions

April 13, 2020August 10, 2020
by Angie

If you’re like many people, you know California is a community property state – but what does that mean when you’re getting a divorce? Here’s what you need to know.

Community Property FAQ: Answers to Common Community Property Questions

Here you’ll find answers to our most common questions about community property questions, which might help you with your case. If you have more questions, or if you don’t see the answer you need here, feel free to call us at 209-395-1605.

What is an Example of Community Property?

Any property that you and your soon-to-be ex-spouse acquired during your marriage is considered community property in California. Some of the most common examples of community property include:

Vehicles
Wages earned
Home and furnishings
Personal belongings
Cookware
Art
Computers and other electronics

What is the Difference Between Community Property and Joint Tenancy?

Joint tenancy is a type of co-ownership that allows a property owner to keep property in the event that the other property owner dies. Joint tenancy is different from community property – but most married couples hold property as joint tenants with the right of survivorship. The biggest thing to be concerned about? Tax consequences. There might be capital gains issues that you need to know about, so talk to a tax consultant if this applies to your situation.

Can Community Property Become Separate Property?

It’s not uncommon for separate property to become partly community property (such as when one person has a house before the marriage but continues paying on it during the marriage). This is called transmutation. If it went the other way, it would also be called transmutation. The only way community property could become separate property is if there was a mistake in classifying the property to begin with. Separate property includes only the property one spouse obtained before a marriage, after separating, and property received as a gift or inheritance during the marriage.

Related: Hiding assets during divorce

What Are Community Property Debts?

When you acquire assets or debts during your marriage, they’re community property. That means you and your soon-to-be ex-spouse own them equally. Even if only one spouse signed up for the debt, it belongs to both of you. You’re both legally responsible for the debt, but you can negotiate with your spouse over debts during the divorce. If you have marital debt, talk to your Stockton divorce attorney about what to do next.

Can My Husband Take My Car if It’s In My Name?

If you brought a vehicle into your marriage and it was paid for before the wedding, it’s your car – your husband can’t take it. However, if you bought the vehicle (or even continued paying on it) during your marriage, your husband has the same right to the car that you do. Likewise, if he gave you the car as a gift, it’s separate property. You may be able to negotiate with your husband, or you might be able to get the court to issue an order that says you’re entitled to continue using the car during (and possibly after) the divorce. You should talk to your attorney if you’re concerned that your husband will take your car when it’s in your name.

How Much is My Wife Entitled to In Divorce?

In California, which is a community property state, both parties to a divorce are entitled to a fair and equitable distribution of their marital assets. One spouse might also be entitled to spousal maintenance (commonly called alimony), depending on that spouse’s ability to provide for him- or herself. All marital assets – and marital debts – are divisible in divorce. However, if you came into the marriage with property you owned, that remains separate and your wife is not entitled to it in the divorce.

Are Wages Considered Community Property?

Wages are considered community property in a divorce in California, provided that you earned them during your marriage. However, the wages you earned the week – or even the day – before you physically got married are separate property and your spouse isn’t entitled to a fair and equitable distribution of them. It’s worth noting, too, that community income isn’t only about money. It can include real estate, payments you receive for services, or payments you receive in rents, as well as other forms of income.

Related: Bitcoin and divorce

What is Community Property in Real Estate?

In real estate, community property is typically a home or piece of property that a couple purchased during a marriage. This real estate is divisible in a divorce. Sometimes a house or piece of property is separate (meaning that it belongs to just one spouse), such as when that spouse bought and paid for it prior to the marriage. However, everything the couple purchased or acquired during the marriage is community property – including real estate.

Is Cash Considered Community Property?

Cash holdings, such as paper money, savings accounts, checking accounts and investment accounts, are considered community property if the money was acquired during the marriage. For example, if you opened a checking account (even if it was just in your name) during your marriage and put in money that you acquired during the marriage, that money is community property. As community property, it’s divisible during divorce.

How Are Assets Divided in a Community Property State?

In a community property state, assets are divided fairly and equitably. That doesn’t necessarily mean 50-50, though. When it comes to how assets are divided in a community property state like California, each spouse is entitled to a fair share of everything. That means you’re free to negotiate if you’d like. You might trade two antique vehicles for an empty piece of property in the country, for example, or you might agree that your spouse will pay off your joint marital debt while you get to keep the paid-off house. As long as your agreement is fair to both of you, the judge assigned to your case is likely to sign off on it.

Is an Inheritance Considered Community Property in a Divorce?

In California, an inheritance is not considered community property in a divorce unless it was left to you and your spouse. If it was left to only one of you, it belongs solely to that person – it’s separate property.

Do You Need to Talk to a Lawyer About Community Property?

If you still have questions about community property in California, or if you need to talk to an attorney about dividing your property in a divorce, we’re here to help. Call us at 209-395-1605 to let us know what’s going on – we’ll be happy to schedule a consultation where you can talk to an attorney and get the answers you need.

Divorce

Is California a Community Property State?

March 12, 2020August 10, 2020
by Angie

Is California a community property state? Here’s what you need to know if you’re getting divorced in San Joaquin County or elsewhere.

Is California a Community Property State?

California is considered a community property state – but to many people, that doesn’t mean exactly what it sounds like. Under California law, the property a couple acquires during a marriage is community. That means it belongs equally to both parties, and when the couple divorces, they must divide it fairly.

What Counts as Property Under California Law?

Property is anything you can buy or sell, like:

Houses
Vehicles
Furniture
Clothing
Household goods (like dishes, pots and pans, televisions and other items you use around your home)

It’s also anything that has value, even if it’s not something you’d buy or sell, such as:

Bank accounts
Cash
Pension plans
401(k) plans
Stocks
Life insurance that has cash value
Businesses
Patents

When you divorce your spouse, you’re free to come up with an agreement that gives you both your fair share of the property. However, even if you agree, the judge in your case will still have to sign off on it. If the settlement you and your spouse work out is unfair to one of you, the judge can tell you to come back with a different plan.

If you and your spouse can’t agree, you’ll either have to go to mediation or ask the judge to rule. If you ask the judge to rule, you’ll have to provide an accurate valuation of all the property you own – and that can be tricky for assets like businesses. (In that case, you’ll most likely have to hire a professional to value the business.)

Related: What is community property?

Is California a Community Property State When it Comes to Debt?

California law treats debt just like it treats assets. If you accrued the debt while you were married, it most likely belongs to both of you. (There are some rare exceptions, though. For example, if one spouse racked up a bunch of credit card debt because he or she was spending money on a paramour, you can let the judge know – that kind of debt may only belong to the party who created it.)

Related: The California divorce process

What About Separate Property?

As a general rule, the assets and debts you brought into your marriage belong to you alone. The same is true for your spouse.

For example, if your spouse had a paid-off car, furniture and money in a bank account before you married, those assets will most likely still belong to your spouse when you divorce.

Sometimes these things get tricky, though. If your spouse had partially paid off a car when you married and continued to make payments on it after your marriage, it’s neither community property nor separate property. Likewise, if your spouse has a pension or retirement benefit that he or she paid into before and after your marriage, the same is true. In these cases, the property is commingled.

How Do You Divide Community Property?

In California, the property you divide has to be equal. But that doesn’t mean you need to chop your toaster oven in half or sell the house and split the proceeds (although you absolutely can do that if you wish). Instead, the total net value of the assets each spouse receives has to be pretty close to equal. That means it’s okay for one spouse to get the house and the other to get the family business. As long as the assets end up being equivalent in value, you have a fair agreement.

Related: Hiding assets during divorce

Do You Need to Talk to a Lawyer About Community Property?

In the end, what’s most important is that you know California is a community property state and that means you and your spouse have to divide your assets (and debts) equally. You may find that talking to a Stockton divorce attorney can help you sort through the situation you’re in.

Call us at (209) 395-1605 to schedule your consultation today. We can answer your questions about all kinds of divorce issues, ranging from child custody and child support to spousal support and basic divorce information.

Divorce

IRAs and Divorce

April 27, 2019August 4, 2020
by Angie

Like other assets, IRAs – individual retirement accounts – are considered community property in many California divorce cases. But IRAs in a divorce aren’t always considered community property; in fact, they can be pretty complicated to sort out.

Here’s what you need to know about your IRA and divorce in California.

Related: Divorce and pension payout

IRAs and Divorce

Your individual retirement account may be yours and yours alone, or part of it may belong to your spouse. Even if it does belong to you alone, you may end up negotiating with it during your divorce. Your Stockton divorce lawyer will give you case-specific advice based on your situation.

The state of California treats IRAs the same way it treats other types of property. Your IRA can fall into one of three categories: separate property, community property, or commingled property.

IRAs as Separate Property

If you contributed to your IRA before you were married, and not during the time you were married, it’s generally considered separate property. There are exceptions, though, which you and your attorney can discuss. Separate property is property that only you have the rights to – your spouse does not have any rights to your separate property.

IRAs as Community Property

If you contributed to your IRA after you were married – such as, for example, when you started a new job as a newlywed – the state of California generally considers it community property. That means it belongs to both you and your spouse, because you made the contributions with money that belonged to both of you at the time.

IRAs as Commingled Property

If you or your partner had a pension or retirement benefit from a job you had before and during your marriage, some of your contributions to it are considered commingled. When an IRA is commingled, the contributions you made to it before your marriage are separate property and the contributions you made to it during your marriage are community property.

In cases like these, it’s sometimes beneficial to hire an expert who can help sort through all your contributions over time and zero in on what portion of your IRA is community property and what portion is separate property.

After you separate from your spouse, the state considers the contributions you make to be separate property. However, like everything else in divorce, there are some exceptions – so it’s in your best interest to discuss the specifics of your case with your attorney.

How Do You Divide an IRA in a Divorce?

When the whole situation is pretty clear-cut, such as when all your contributions are either separate or community property, dividing an IRA in divorce is just like dividing other property. You may choose to use your IRA as a negotiation point, or you and your spouse can agree to split the benefit.

No matter what you choose to do, your attorney will suggest that you work it out on your own without having to litigate it in court, though. When you and your spouse are able to reach an agreement together, rather than forcing the judge to decide who gets what part of your IRA in the divorce, you’ll both be more satisfied with the outcome.

Can a Spouse Get an Entire IRA in a Divorce?

In some cases, through negotiation, one spouse can get the other spouse’s entire IRA in a divorce. However, the judge in your case will only sign off on an agreement you make if it’s fair to both parties – and that means one spouse can’t take everything and leave the other in the poorhouse.

Do You Need to Talk to a Lawyer About IRAs and Divorce?

If you’re divorcing your spouse and you have an IRA, we can help you sort things out.

Call us at 209-546-6870 to schedule a consultation with an experienced divorce and pension attorney right now.

Tag: <span>Commingled Property</span>

Community Property FAQ: Answers to Common Community Property Questions

Community Property FAQ: Answers to Common Community Property Questions

What is an Example of Community Property?

What is the Difference Between Community Property and Joint Tenancy?

Can Community Property Become Separate Property?

What Are Community Property Debts?

Can My Husband Take My Car if It’s In My Name?

How Much is My Wife Entitled to In Divorce?

Are Wages Considered Community Property?

What is Community Property in Real Estate?

Is Cash Considered Community Property?

How Are Assets Divided in a Community Property State?

Is an Inheritance Considered Community Property in a Divorce?

Do You Need to Talk to a Lawyer About Community Property?

Is California a Community Property State?

Is California a Community Property State?

What Counts as Property Under California Law?

Is California a Community Property State When it Comes to Debt?

What About Separate Property?

How Do You Divide Community Property?

Do You Need to Talk to a Lawyer About Community Property?

IRAs and Divorce

IRAs and Divorce

IRAs as Separate Property

IRAs as Community Property

IRAs as Commingled Property

How Do You Divide an IRA in a Divorce?

Can a Spouse Get an Entire IRA in a Divorce?

Do You Need to Talk to a Lawyer About IRAs and Divorce?