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Community Property

California Community Property

During the dissolution proceeding, the parties will seek determination of their rights as to  community property. Community property is all property (e.g. real estate or personal property) acquired by a spouse during the marriage. Community property is divided equally between the spouses during the divorce proceeding.

The definition of community property includes any property no matter where situated if the couple is domiciled in California.  Exceptions to the community property rule are:

1) Acquisitions during marriage, which are the couple’s separate property;

2) Property accumulated while the couple lives separate and apart or after a judgment of divorce; or

3) Community property transmuted (changed) into separate property.

As to the first exception, separate property which is awarded to either spouse in a dissolution is property owned before marriage by one spouse, property acquired during marriage by a spouse by gift, bequest, devise, or descent, and the rents, issues, and profits of any of these.

In general, as to the control of community property during marriage, each spouse has a fiduciary duty to the other with respect to such property.  A fiduciary duty requires a spouse to deal fairly and in good faith in managing the community property. The fiduciary obligation continues until the community property is distributed.  In general, spouses share equal management and control of their community property except for a one spouse who operates a community property business.

Community Debts. The community estate is liable for a debt incurred by either spouse before or during marriage and prior to separation.  Earnings of a married person during marriage are not liable for a debt incurred by the person’s spouse before marriage so long as those earnings are held in a segregated deposit account.

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