CLASSIFICATION

Community property: Generally, community property is defined as all real property situated in the state and all personal property wherever situated acquired during marriage by a married person while domiciled in the state. Normally, community property is defined by statute. If the property does not fall into a statutory class of separate property, the property will be presumed to be community. Property acquired through the efforts of one or both spouses is community. The common types of community property include the earnings of either spouse, personal injury damages, the proceeds of community property, a proportionate share of the profits of a separate property business to which a spouse contributes labor or skill, a loan on personal credit, and the goodwill of a professional practice. A mere expectancy is not recognized as community property. The proceeds of community property can include and are not limited to personal injury damages, profits from a community business, proceeds of insurance, proceeds of earnings, pension and retirement benefits, servicemans disability pay, employment or insurance disability benefits, judges retirement benefits, social security benefits, and veterans education benefits.

Separate property: All property owned by a spouse before marriage, and that acquired afterward by gift, bequest, devise or descent, with the rents, issues, and profits thereof and property acquired during the marriage with the proceeds of separate property is separate property.

Time of Acquisition

Inception of Title Theory: If property is acquired before or after the marriage, it is separate property. The status of title of property is determined by the status of the original right. This status once acquired is generally fixed unless it is changed by an agreement between the parties or by implied acts of ownership. Property is not community property unless it was acquired during the marriage. Title depends on the existence of nonexistence of the marriage at the time of incipiency of the right. This is known as the inception of title theory. The exception to the inception of title rule is acquisition of equitable title.

Real Property: If the equitable title of real property is acquired before the marriage, the real property is separate property even if the legal title is acquired during marriage. An option for a lease obtained prior to marriage with the exercise of the lease during marriage is still separate property. Thus, an option on the exercise of a right acquired before marriage relates back to the time it was given and thus any title so acquired is separate property.

Personal Property: Money earned before marriage is separate property even if the money is collected during marriage. A right to sue on personal injury that was acquired before marriage is separate property even if the suit is commenced during marriage.

Living Separate and Apart: The earnings and accumulations of W or her minor children while living with her or in her custody while she is living separate and apart are the separate property of W. Initially Hs earnings while living separate and apart were only separate property if W had abandoned him. But this was changed by statute and thus under Cal Family Code 771, the earnings and accumulations of a spouse and the minor children living with or in the custody of the spouse while living separate and apart from the other spouse are treated as the separate property of that spouse. The issue of retroactive application of the statute was a hot debate. It was argued that W had vested property rights which were taken away and such an act would be a denial of substantive due process. But, the legislature was correcting a rank injustice similar to the quasi-community property legislation in Addison v. Addison 62 C.2d 558 (1965). In Marriage of Bouquet 16 C.3d 583 (1986), the court found two important factors for retroactive application. (1) The former statute blatantly discriminated against H and under modern law with sex-based classifications being inherently suspect, it could be readily inferred that the Legislature intended to replace such an infirm law. (2) The bills author printed a letter of legislative intent and used the argument that retroactivity is relevant. Also, the states interest in the equitable dissolution of the marital relationship supports the use of police power to abrogate rights in marital property that derived from patently unfair former law.

Date of Separation: Community asset values should be determined as near to the date of trial as is practicable. If the parties separate and the earnings of one of the spouses increases the value of a community asset, the value on the date of separation is important only when it is used in conjunction with a final valuation for apportioning community and separate property.

Separation: Separate and apart means a separation with no present intention of resuming marital relations. There must be a parting of the ways with an intention not to resume marital relations. Merely filing divorce papers and moving out but taking no further action for three years and continuing sexual relations is not an intent to separate. Even moving out of the marital home and living with another woman for four years with no sexual relations with W but with H still in close daily contact with the family and doing all types of chores at the marital home including eating dinner is not an intent to separate. There must be a complete and final break in the marital relationship for there to be a separation. The conduct of H and W must evidence a complete and final break in the marital relationship.

Accumulations: Accumulations are any property which a person acquires and retains except that obtained in exchange for community property. Thus, temporary support payments are not community property as they are designed to prevent a diminution of the receiving partys separate estate until final dissolution. A cause of action for damages for wrongful death or injuries to a child is an accumulation to the spouse having custody of the child.

Type of Acquisition

Separate property is acquired either before or after marriage or by definition; it may also be acquired by gift, devise, bequest, or descent. The rents, issues, and profits of separate property are subject to the same attributes of ownership as the property itself. Money borrowed on the credit of separate property is separate. Property may also be changed to separate property by written agreement between the spouses. The spouses may fix their interests in property in writing and may do so despite disparities in values or the form of the conveyance. A change of community to separate or separate to community may also be made by a fully executed oral agreement. Also as discussed supra, the earnings and accumulations of souses while permanently separated are separate property.

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