What is the Difference between Community and Separate Property

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18th Dec 2012

In California, getting married does not just mean loving each other. It also means sharing ownership of properties. The State of California is known as a “community property state.”  California recognizes the concept of community property. This simply means that most property acquired during your marriage is jointly owned by both spouses. These include real estate, investment, assets and other assets.  Income earned by either spouse during the marriage also becomes part of the community property.  In the event of a divorce or annulment, community property is divided equally between the spouses.  In the event of death of one spouse, the community property is transferred to the surviving spouse.     
The spirit behind community property is premised on the fact that a marriage is considered a partnership.  As such, both spouses are presumed to work for the benefit of the partnership.  Hence, whatever assets they may acquire during the marriage are deemed to be jointly owned and, thus, should be shared equally.
 Then there is the separate property.  Under this type of property are: (1) all  assets owned by  a person before marriage; (2) all  assets gained by the person after marriage  either as a gift, bequest, or inheritance; and (3) income, and other financial gains from such property mentioned in (1) and (2).  It can be seen, therefore, that separate property are assets which a spouse brings before a marriage.  Or, there are assets gained by a spouse before or during a marriage which are not through his own efforts.  Whatever residual income is earned from separate property are still conserved as separate.
All assets acquired by married partners during the marriage are considered community or joint property in California. It may happen, however, that a married couple began residence in a non-community property state and eventually transferred to California, a community property state.  California law then dictates that all property acquired by the couple in the other state which may be considered as community property will be deemed as quasi-community property.  The term has the legal force of a community property because such property will be considered as community property in the event of divorce or death.
It may also be possible that one of the spouse moves to California while the other spouse remains in a non-community property state. In such a case, the quasi-community property provisions will not apply.   As an example, consider a couple that initially resided in New York and the wife transferred residence to California while the husband remained in New York.  In the event of divorce or death, New York statutes – and not California laws – will apply.   
It will be in your best interest to study and know the fine differences between these types of property so you can be properly protected and know what you may be getting in the event of marital separation or death of your spouse.   Consult your estate planning or marriage attorney to guide you in planning your estate or pre-nuptial agreement.

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