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Can separate property become community property?

On Behalf of | Oct 4, 2023 | Division of Assets and Debts |

As a community property state, California courts equally divide assets and debts that divorcing couples amassed during the marriage. This process means state laws entitle each party to 50% or half of their marital wealth and liabilities.

On the other hand, anything they owned or acquired outside of the marriage – whether prior to the marriage or post-divorce – is separate property.

However, family circumstances are unique per family. Sometimes, lines blur when an existing prenuptial agreement has specific provisions about considering separate property into community property in case of divorce.   

Ways separate property becomes community property

Some properties start as separate property and transform into community property in due course. Some of the ways this can happen are through:

  • Commingling: Mixing separate property with community property, such as converting a solo bank account into a joint one by depositing funds
  • Transmutation: Changing separate property’s characterization into community property in clear writing and with consent from the spouse whose interest is at stake, such as transferring a title from one party to the other

Things can also become more complex when a party contributes in any way or form to separate property and claim partial ownership.

For example, suppose a party owned a business before the marriage. In that case, it can become community property when the other party invested funds to grow it. Further, real estate received as an inheritance may turn into community property when the other party shelled out money for labor or other means to improve it.

How to keep one’s property

While every divorce is different, parties often wish to keep their property. Their legal counsel can help them build a strong defense. They can work together to prove that the other party did not provide finances, effort or ideas to assert ownership. Doing so can help parties protect their properties that may be valuable to them.