Just What Is Community Property?

By | February 10, 2011

Community property is a bit of jargon that is bandied about by family law practitioners. For most people, a plain English reading of the term is enough to let them understand that “community property” is “our” property (shared by both spouses). But the meaning goes deeper than that for legal purposes.

Community Property is defined in the California Family Code in the following sections:

760. Except as otherwise provided by statute, all property, real or
personal, wherever situated, acquired by a married person during the
marriage while domiciled in this state is community property.

761. (a) Unless the trust instrument or the instrument of transfer
expressly provides otherwise, community property that is transferred
in trust remains community property during the marriage, regardless
of the identity of the trustee, if the trust, originally or as
amended before or after the transfer, provides that the trust is
revocable as to that property during the marriage and the power, if
any, to modify the trust as to the rights and interests in that
property during the marriage may be exercised only with the joinder
or consent of both spouses.
(b) Unless the trust instrument expressly provides otherwise, a
power to revoke as to community property may be exercised by either
spouse acting alone. Community property, including any income or
appreciation, that is distributed or withdrawn from a trust by
revocation, power of withdrawal, or otherwise, remains community
property unless there is a valid transmutation of the property at the
time of distribution or withdrawal.
(c) The trustee may convey and otherwise manage and control the
trust property in accordance with the provisions of the trust without
the joinder or consent of the husband or wife unless the trust
expressly requires the joinder or consent of one or both spouses.
(d) This section applies to a transfer made before, on, or after
July 1, 1987.
(e) Nothing in this section affects the community character of
property that is transferred before, on, or after July 1, 1987, in
any manner or to a trust other than described in this section.

From all of that nonsense above, section 760 is clear that community property, is property acquired by a married person while married and living in California.  There are a few exceptions to that, which I’ll deal with in my upcoming post on separate property.  Section 761 acknowledges that a lot of people have living trusts as part of their estate plans and sets out some rules that really deal with transmutation (also dealt with later).

So, from a divorce perspective, community property is property belonging to both parties in a divorce.  The principal also applies to debts.  Even though a debt is acquired in one person’s name, such as a credit card, if the underlying obligation was incurred for community purposes, such as a night on the town (with each other and not some fling), then it is likely a community property debt to be divided equally between the parties.  Nothing in law is ever straightforward, and there also exist certain rules for reimbursements which cloudy the waters further.   Community property may be mixed or combined property and a separate property interest might be traced (another legal term) from a community property asset and vice versa.

The above is for educational purposes only.  Your specific circumstances may differ.  Consult an attorney for specific legal advice.