Separate or Community property in California?

[GeorgeJetson]

I'm in California and I think I got this right but I'm hoping for confirmation.

I purchased a house completely in my name in the year 2000 which we both moved into but we did not got married until 2002. From my interpretation of the definition (DivorceNet - California Community Property FAQ's) this is considered separate property, Correct?

Thank you,

George

 

[LdiJ]

I'm in California and I think I got this right but I'm hoping for confirmation.

I purchased a house completely in my name in the year 2000 which we both moved into but we did not got married until 2002. From my interpretation of the definition (DivorceNet - California Community Property FAQ's) this is considered separate property, Correct?

Thank you,

George

Maybe, maybe not.

If you paid cash for the house, and used no marital income/assets to pay for taxes/upkeep etc., then the house may be separate property.

However, if you used marital assets (your current income) to coverage mortgage payments, taxes or upkeep then any equity in the home that has accrued during the marriage is marital property.

Example:

You paid 200k for the home in 2000 and in 2002 it was worth 250k. You used your regular salary and yearly income to cover the mortgage, taxes and upkeep since then. The house is now worth 300k. 50K of that is marital property (300k-250k).

 

[mistoffolees]

Maybe, maybe not.

If you paid cash for the house, and used no marital income/assets to pay for taxes/upkeep etc., then the house may be separate property.

However, if you used marital assets (your current income) to coverage mortgage payments, taxes or upkeep then any equity in the home that has accrued during the marriage is marital property.

Example:

You paid 200k for the home in 2000 and in 2002 it was worth 250k. You used your regular salary and yearly income to cover the mortgage, taxes and upkeep since then. The house is now worth 300k. 50K of that is marital property (300k-250k).

Marital property would probably be higher than that. Marital income is also paying down the principal, so spouse would be entitled to some of that.

Take the extreme case. You buy a house the day before your wedding with $1 down payment. You pay all the mortgage and expenses from marital income until the home is paid off. The spouse would be entitled to half of the entire equity of the home (less $1), not just the gain in value, since the principal is being paid down with marital income.

 

[tranquility]

In California, if salary is paid out of a segregated account (no comingling) for mortgage etc. of seperate property, the community does not gain ownership of the property. It may be entitled to restitution for some of the amounts paid.

 

[LdiJ]

In California, if salary is paid out of a segregated account (no comingling) for mortgage etc. of seperate property, the community does not gain ownership of the property. It may be entitled to restitution for some of the amounts paid.

I understand your point, but that's why the gain in equity is all that is marital property.

 

[tranquility]

I understand your point, but that's why the gain in equity is all that is marital property.

No. If the seperate property mortgage was paid in the manner I wrote (community property salary/wages, deposited in an account otherwise not comingiled), the community has gained no rights to the equity. No portion of the property would be considered a community asset.

The community may be entitled to reimbursement for those portions which, absent this quirk, would have gone to buying part of the property.

 

[LdiJ]

No. If the seperate property mortgage was paid in the manner I wrote (community property salary/wages, deposited in an account otherwise not comingiled), the community has gained no rights to the equity. No portion of the property would be considered a community asset.

The community may be entitled to reimbursement for those portions which, absent this quirk, would have gone to buying part of the property.

Are you familiar with people with that set up, who were successful in claiming that the marital home was entirely separate property? This is the first that I have seen something like that mentioned, in many years of participating in family law forums. I am not disagreeing with you, I am just wondering how successful such a claim is, in practice.

 

[GeorgeJetson]

More information

I didn't know this would be an issue, but the continual payment of the house was from mostly my salary earned during the marriage but we keep separate accounts, no co-mingling. it seems like she would get half the value today minus the value in 2002, correct?

She has paid for an occasional repair here and there and once gave me money for "rent" but that might have been before we were married. Otherwise she primarily pays for removable items; decorations, furniture, area rugs, etc. I'm assuming those are not considered part of the house, if she wanted them, fine.

Thanks,

George

 

[LdiJ]

I didn't know this would be an issue, but the continual payment of the house was from mostly my salary earned during the marriage but we keep separate accounts, no co-mingling. it seems like she would get half the value today minus the value in 2002, correct?

She has paid for an occasional repair here and there and once gave me money for "rent" but that might have been before we were married. Otherwise she primarily pays for removable items; decorations, furniture, area rugs, etc. I'm assuming those are not considered part of the house, if she wanted them, fine.

Thanks,

George

Based on the fact that we have some contradictory information being posted here, I would recommend a consult with a local attorney. I am not suggesting that you absolutely must hire one, but I would recommend consulting with one on the status of the house.

 

[tranquility]

It is always better to see an attorney on such matters, especially when the goal of the courts is equity.

I'd have to go back to the school books to find a case on the matter, but the general outline is.

1. Title is presumptive.
2. Seperate is seperate unless transmuted.
3. There is a liablity of marital property section in the CA Family Code from around 902 to 1000. (Note specifically section 911. )
4. (Key magic point holding.) Since we have a seperately titled home and the community is not liable for the debt of that seperate property and the exception of 911; ergo, no transmutation.

I don't think I'll be able to get the case law on the matter before Monday though.

 

[LdiJ]

It is always better to see an attorney on such matters, especially when the goal of the courts is equity.

I'd have to go back to the school books to find a case on the matter, but the general outline is.

1. Title is presumptive.
2. Seperate is seperate unless transmuted.
3. There is a liablity of marital property section in the CA Family Code from around 902 to 1000. (Note specifically section 911. )
4. (Key magic point holding.) Since we have a seperately titled home and the community is not liable for the debt of that seperate property and the exception of 911; ergo, no transmutation.

I don't think I'll be able to get the case law on the matter before Monday though.

Its no biggie, it was mostly curiosity.

 

[GeorgeJetson]

Never clear, that's why lawyers get the big bucks

Each case is different and it's never cut and dry, I guess that's why lawyers get the big bucks.

I'm not sure this will happen, I just wanted to find out my rights IF this happened. If it comes to this and she insists on getting part of the house then at least it won't be half of the equity and then I'd have to sell the house to pay her off.

Thank you all for your advice.

George