California Court Discusses Separate Versus Community Property in Divorce

Under California law, any property acquired during the marriage is deemed community property, which means each spouse owns it equally. There are some acts that can change the character of a property, however, and people with separate assets must be mindful of behavior that may impact their property rights. Recently, a California court set forth a ruling discussing how and when the nature of a property is defined and how to assess whether transmutation occurred. If you are considering ending your marriage, it is smart to speak to a knowledgeable San Diego divorce attorney regarding your rights.

Factual Background of the Case

It is reported that the husband bought a house before he got married. When the couple wed, the husband had paid off the mortgage for the home. Additionally, he had a retirement account he paid into before the marriage. He did not contribute any money to the account after the wedding, however. The couple resided in the house the man purchased for a number of years after they married and then decided to move to a second home.

Allegedly, the husband kept the first house after the move. He obtained a loan for the second home that was solely in his name and took money out of his retirement account for the down payment. Both the application for the loan and the deed to the house stated that the house was granted to the husband as his sole and separate property. The husband ultimately sold the first home and used the money from the sale to pay for the second home. The wife filed for divorce, and one of the main sources of contention during the divorce proceedings was whether the second home was the husband’s separate property, community property, or a combination of both. The Court determined that it was community property, and the husband appealed.

Separate Versus Community Property

Under California law, whether an asset is considered community or separate property is decided at the time it is obtained. In other words, property acquired before a marriage is separate, while that obtained after marriage is a community asset. Parties arguing an asset is separate property can use any evidence that is credible to support their position, including tracing the property to a separate asset.

In the subject case, the Court explained that property purchased with separate funds remains separate even if the spouse that owns the property uses it during the marriage, or it changes form or identity. Parties can agree to modify the character of property through an express written declaration. Here, the husband did not enter into any such agreement. As such, the Court determined he retained his separate interest in the second home, which was equal to the value of the separate assets he contributed.

Speak to an Experienced California Family Law Attorney

People can retain separate assets after they marry, but they must be careful not to take actions that can change the character of their property. The experienced San Diego family law attorneys of Doppelt and Forney APLC are skilled at helping people defend their property rights in divorce matters, and if we represent you, we will work diligently on your behalf. You can contact us by calling 800-769-4748 or by using the form online to set up a free and confidential conference.




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