California property laws

California is a "community property" state (not a "common law" state), community property states follow the rule that all assets acquired during the marriage are considered "community property". The community property system has been adopted by nine states: Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington and Wisconsin. The U.S. Territories of Guam and Puerto Rico are also community property jurisdictions[1].

The theory underlying California's community property is analogous to that of a partnership. Each spouse contributes labor (and in some states, capital) for the benefit of the community, and shares equally in the profits and income earned by the community. Thus, each spouse owns an automatic 50% interest in all community property, regardless of which spouse acquired the community property. Spouses may also hold separate property, which they solely own and control, but the law in the California states does not favor this.[1]

Spouses are also considered to share debts. Depending on California state law, creditors of spouses may be able to reach all or part of the community property, regardless of how it is titled, to satisfy debts incurred by either spouse. State laws vary greatly on what property can be reached.[1]

California CA community property & common law resources

Community property FAQs: Have more questions, or have you recently lived in or plan on moving outside of California? If so, you will want to further familiarize yourself with this important marital law.
Search other states: Planning on moving outside of California? Use our guide to view all community property states before your move so you can prepare financially.
Tax ramifications: The IRS has a great resource that explains community property laws and common laws and how they apply to married taxpayers domiciled in community property states, or cases otherwise raising community property issues.

Always check with your local community property divorce lawyer or a local tax accountant familiar with community property laws before proceeding. In the meantime, there are several good resources available to you should you want to learn more about community property laws in California or any other state.


Research cited in this article was derived from the following source:

[1] IRS.gov. (2019). Basic Principles of Community Property Law. Retrieved from https://www.irs.gov/irm/part25/irm_25-018-001