Tips to Understanding California Community Property

In California, separate property of a married person is defined by statute and all other property owned by a married person is community property.  Separate property includes: property owned before marriage, property acquired by gift or inheritance, property exchanged for or acquired with separate property, earnings and accumulations while separate and apart from the other spouse, personal injury awards, property designated as separate property by agreement between the spouses either before or after the marriage, employer provided benefits received after the date of separation and worker’s compensation awards received after date of separation. California Family Code § 760 states: “Except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property” Unless the trust instrument provides otherwise, community property transferred to a revocable, living trust retains its community character. Husbands and wives owe a duty of the highest good faith and fair dealing in transactions with each other, with neither side taking unfair advantage of the other.  This fiduciary duty includes the following obligations: (1) to provide access at all times to any records regarding a transaction for the purpose of inspection and copying, (2) to provide, upon request, full and true information about any transactions concerning community property, and (3) to account to and hold as trustee for the other spouse any benefit or profit derived from any transaction concerning community property that occurred without the other spouse’s consent. The fiduciary duty is imposed on both spouses in regard to their assets and debts from the date of separation until the...