Community property

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In California, Community Property is property (real property or personal property of any kind) that is acquired and owned by either a married couple (or registered domestic partners) during the term of their marriage (or domestic partnership). Unless the couple have entered into a written document disallowing the creation of Community Property (e.g., a Premarital Agreement or a Post-Marital Agreement), Community Property of the couple is created from, and includes, the following types of property:
1. All Employment-Related Earnings, including those earnings that are allocated to one’s retirement plan, from the employment of either or both spouses (or registered domestic partners);
2. All Acquisitions of Property with such Community Property earnings;
3. All Appreciation in the Value of such property, that was acquired during one’s marriage or domestic partnership.
Importantly, Community Property is created when, for example, the earnings from the employment of one spouse are used to pay the principal of a mortgage that is secured by the home of the other spouse, who owned the home prior to the marriage and had hoped to keep such property separate. In this case, the spouse whose earnings were used to pay the principal of that mortgage acquires a community property ownership interest in the home of the other spouse. At first, the acquired interest may be quite small, but over time, as more payments are made using the other spouse’s earnings, the community property ownership interest can grow quite large.


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