Do You Know Where Your Community Property Is?
In most of my consultations, my clients ask what should I do when faced with the possibility of a divorce and what do they need to do to ensure fairness in the division of the community assets? I first tell them this, California is a community property state. This means that a marriage or the registration of a domestic partnership makes 2 people 1 legal “community.” Community property generally is everything that spouses or domestic partners own together. It includes everything you bought or got while you were married or in a domestic partnership — including debt — that is not a gift or inheritance. That is why knowing where your community property and what it consists of is so important. One way of doing this is though documentation. Community property includes all the earnings that either spouse or partner (or both of you) earned during the marriage and everything bought with those earnings. This includes, pensions, IRA, bank accounts, painting, collectible, vehicles, businesses, and you can usually tell if property belongs to the community by looking at the source of the money that was used to buy it. If the purchase or acquired during the marriage, in most cases the property belongs to the community. Community property may also consist of that property in which title to the property has changed. Community property can be determined as simple as if you bought a car with money you were saving from your paycheck every month, and you made this money during the marriage/partnership, the car belongs to both you and your spouse or domestic partner, even if you paid for it yourself. That is because the savings you have from your paycheck is community property, since you earned that money during the marriage/partnership. Or it can be complicated as when title to real property is in issue thought placing your partner or significant other’s name on the deed. What was the intent or purpose at the time of the “transmutation” (which is the legal name for ‘change’ in character). Community property includes all financial obligations (debts) accumulated during your marriage or domestic partnership. This is true even if the debt was incurred by only one of you, or even if a credit card was in the name of one spouse or partner only. In California, each spouse or partner owns one-half of the community property. And, each spouse or partner is responsible for one-half of the debt. Community property and community debts are usually divided equally. The law provides that community assets must be divided equally in a dissolution action. Family Code, § 2550. Section 2552, subdivision (a) addresses the date of valuation of community assets, requiring the trial court to “value the assets and liabilities as near as practicable to the time of trial.” Upon notice and for good cause, the court may value the assets “at a date after separation and before trial to accomplish an equal division of the community estate of the parties in an equitable manner.” (§ 2552, subd. (b).) Thus, to ensure that the Court awards you what you are entitled, document all the community assets and debts, retain a copy in a safe place.