What is community property interest? Under California law, during a divorce proceeding, personal property and real estate will be classified as either “Separate Property” or “Community Property” for purposes of division. California is a community law state, and as such, all property classified as community property will be subject to a 50/50 division of interests during a divorce.
Community property is all property acquired by a married couple during their marriage, except property acquired by gift. Separate property is all property owned by a party prior to marriage and remains that party’s separate property even after marriage unless it is transmuted to community property. These are the guidelines for determining the division of property during divorce proceedings.
Community Property Interest
While separate property does not change its classification after marriage, there are circumstances where the community may obtain an interest in the separate property of one or the other of the parties.
Separate Property Appreciation During Marriage and How it May Relate to a Community Property Interest
Increase in the wealth of separate property interest during the marriage is one of those ways the community may obtain an interest in that separate property. While the community may acquire an interest in this separate property, it does not obtain “title.” Title to the separate property still remains with the original owner.
The community may gain an interest in the separate property of one of the parties, specifically if the community is entitled to be reimbursed for any community assets used to maintain or improve the separate property of one, or the other, of the spouses; and/or the community may obtain an equal share in the appreciation in value of the separate property if community assets such as labor was used that resulted in an increase in value of the property.
There are other properties classified as separate, but in which there may develop community property interest, such as
- Retirement accounts that began before marriage – (Railroad retirement accounts and military retirement accounts require a specific treatment during divorce proceedings. Consult your attorney if one of these retirement accounts are at issue in your potential divorce proceeding.)
- Premarital real estate – (especially income property when the property owner uses marital property assets to maintain his separate property, such as community labor, or community funds)
The same issue regarding premarital real estate would also apply to the following assets as well.
- A business or professional practice launched before marriage
- Premarital mixed portfolio
- Stock options and restricted stock units (RSUs)
- A trust or inheritance
Keep in mind that for the community to be awarded a percentage in the appreciated value of separate property; the spouse seeking an award must establish that the community acquired an interest, for example, by the commingling of separate and community assets. For a better understanding of this issue, please contact the family law attorneys at Beck Law P.C. for a consultation.
Getting Community Property Interest Legal Help for Your Santa Rosa Divorce
Questions regarding the division of assets in a divorce can be complicated, especially when it comes to retirement accounts. If you have questions about a divorce in Sonoma County, Mendocino County, or Lake County California, Beck Law P.C., can help you. The Santa Rosa family law attorneys at Beck Law P.C. can answer your questions and help you determine the best method of obtaining a divorce given your unique circumstances. For a consultation regarding divorce, or any other family law question, contact Beck Law P.C. at (707) 576-7175 or visit us online.