What Is a Community Property State?

When dividing property in a divorce, each state has its own rules. Many states follow the rule of equitable distribution, but California is a community property state. Essentially, according to the California laws, every asset (and liability) bought, earned or otherwise acquired during the marriage becomes marital property and is subject to equal division between the spouses. Only property owned prior to the marriage, and certain items acquired during marriage (by way of gift or inheritance, for example) is not marital property.

During the divorce, the court will divide all marital property between you and your spouse. Property is anything with value. This includes any income you or your spouse earned during the marriage. Do note that if you have a prenuptial agreement, this could alter property division. The court must validate the agreement, but if upheld, your division of property will follow its guidelines rather than the general law of community property.

However, even with a prenuptial agreement, before the court finalizes the property division aspects of your divorce, any assets that qualify under the law as marital property belong to you and your spouse and are subject to division under the community property laws. So, even if you have an agreement that states you get certain things, you generally must wait until the divorce concludes before you can dispose of that property.

You should also note that property in this sense also refers to debt. The court will split any liability you or your spouse incurred during the marriage. It generally does not matter whose name is on the debt or who incurred the debt. The court looks at the date of the obligation to determine if it happened during the marriage, and if so, it is marital property. This information is for education and is not legal advice.

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