Sharing Not Always Required in Marriage

For married people in California, there are basically two types of property: community property--property owned jointly by husband and wife--and separate property--property owned individually by one spouse.

In everyday situations, the category that a particular piece of property falls in may not matter much. Couples probably don’t cite California community property law when they are deciding who gets to drive the new car.

But there is an important difference, as explained by Ralph Warner and Toni Ihari in the valuable self-help legal text, “California Marriage and Divorce Law.”

“It’s the difference between having a dollar (your separate property), sharing the dollar equally with your spouse (community property) and seeing the dollar only when your spouse feels like showing it to you (his or her separate property).”

Divorce or Death

The difference is especially crucial at times when your property is divided by the legal process, like upon divorce or death. Usually, the value of the community property is divided equally upon divorce. Upon the death of a married person, one half of the community property automatically belongs to the surviving spouse. The other half and any separate property will be dispersed to the lawful heirs, who could also include the surviving spouse.

One reader had a very specific question about community property law and her husband’s inheritance. She wrote:

“My husband tells me that whenever a husband or wife living in California inherits money or property, it is his or her sole and separate property and need not be shared with his or her spouse. Is this in fact true? If so, and the spouse invests his inheritance and receives interest on it, is that money also his alone or does the money earned belong to both husband and wife? I am sure many other wives need to know where they stand on this issue.”

The reader’s husband is basically correct.

In California, most everything that is acquired during a marriage is considered community property. For instance, each spouse’s earnings during marriage are contributions to community property.

On the other hand, property acquired before and after a marriage is considered separate property. But there are certain categories of property, like an inheritance or a gift, that are separate property even if they are acquired during the marriage.

In legal terms, the law says any property acquired during marriage by “gift, bequest, devise or descent” is considered separate property. In addition, the “rents, issues and profits” from that property are also considered separate property.

Sole Property

In common English, that means that if your spouse inherits money or property, or receives a gift of money or property, it is your spouse’s sole property. You don’t get to share in the good fortune.

So if your spouse inherits $10,000 cash and uses the cash to buy a boat, the boat is separate property. If the boat is then sold, and the purchase price is used to buy stocks, the stock dividends are still separate property.

A husband and wife can agree to “change” separate property into community property or vice versa, but as of this year, such agreements must be in writing.

It is also possible that a court will find the separate property has become community property if the separate property is “commingled” with community property and if the separate property cannot be “traced” back to its separate origin. But, as a matter of basic, black-letter law, the inheritance is the heir’s, not the spouse’s.

Attorney Jeffrey S. Klein, a member of The Times’ corporate legal staff, cannot answer mail personally but will respond in this column to questions of general interest about the law. Do not telephone. Write to Legal View, You section, The Times, Times Mirror Square, Los Angeles 90053.