Community Property in California
California is a “community property” state, which means that property (or debt) acquired by the couple during the marriage is considered the property (or debt) of both spouses. In a divorce, the property is split 50/50, or as the couple agree.
“Separate Property” is that acquired by one of the spouses either before the marriage, or received by inheritance or gift. Student debt is usually considered separate property of the spouse who received the education.
There are times when property is both community AND separate, because the property was “commingled.” This just means things were not kept separate after the marriage, and community property was used to pay for or update the property.
SquareFairy calculates the community portion of separate property like this:
- Separate Property = Fair Market Value on the date of marriage
- Community Property = Today’s Fair Market Value – Fair Market Value on the date of marriage
In other words, if the property increases in value during the marriage, that part is considered community property. This can get complicated, so we allow you to specify how much of today’s value is separate property and how much is considered community property.
The California state web-site offers additional information: https://selfhelp.courts.ca.gov/divorce-property-basics