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| 11271 Ventura Blvd. |
| Suite 473 |
| Studio City, CA 91604 |
| Phone: 877-479-7970 |
| Fax: 888-509-8864 |
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| Warner Center Towers |
| Phone: 877-479-7970 |
| Fax: 888-509-8864 |
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| Watt Plaza |
| Phone: 877-479-7970 |
| Fax: 888-509-8864 |
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| Fashion Island |
| Phone: 877-479-7970 |
| Fax: 888-509-8864 |
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Family Law
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Classification of Property
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Community Property
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California is a community property state. In California, community property is defined as all property, both real and personal, which a married person living in the state acquires during the marriage. This includes property that is located outside the state as well as within the state. How the property is titled does not matter. There is also a presumption, regardless of who earns income, that income acquired during the marriage is considered part of the marital community estate. Upon dissolution of marriage, the community property, absent an agreement between the parties, is divided equally between them. In many cases, an equal division of each asset is not realistic, possible or reasonable. In some cases, it would require a couple to sell each of their assets and then split the assets. This can be disruptive and even result in a loss of equity. Many times these situations result in large disputes between the parties, as such it is imperative that the parties receive a proper valuation of their assets to allow the parties to work out a fair and/or equitable settlement.
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Separate Property
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In California, separate property is property that is not considered part of the marital community estate. California law creates exceptions to property that otherwise would be considered part of the marital community estate. The exceptions include: (1) property acquired by a spouse prior to the marriage; (2) property acquired by a spouse during the marriage by gift or inheritance; and (3) the rents, proceeds, or profits generated by separate property.
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Transmutation
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Sometimes it is unclear what classification belongs to property. In fact, legal disputes often arise over the classification of property because the classification of property can change over the course of the marriage. The changing of the property’s classification and be referred to as “transmutation”. For example, property owned separately prior to marriage may inadvertently become part of the marital community property over the course of the marriage. This could happen when the marital community property is used to improve or renovate the property. In complex situations such as this, resolution of complex property classification matters requires the assistance of legal counsel experienced in California community property law.
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Agreements
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Agreements can be made regarding the classification (property classification agreements) of property prior to, during, or at dissolution of the marriage. In California, agreements made prior to marriage, or prenuptial agreements, must conform to certain requirements. These requirements are put in place to protect the parties and ensure that they are knowledgeably entering into an agreement absent coercion. Prenuptial agreements are commonly used in situations where the parties may have large estates acquired prior to marriage, or where spouses have children from prior relationships. This is useful in the latter situation where parents want to protect their child’s legal inheritance rights (without having to split the inheritance with a step-parent).
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In dissolving their marriage, couples may make agreements (post-nuptial agreements) regarding the classification of property. In order to enforce this agreement, the court will look to the validity of the agreement, whether the parties each fully disclosed the assets, the presence duress, and the fairness of the agreement.
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[Read More]
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For a complimentary consultation regarding California property settlement laws, contact us at 877-479-7970, or e-mail us at info@law-thomas.com.
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