California is a "community property state" meaning that all property
real or personal acquired during a marriage is presumed to be community
property. All other property, which includes property acquired prior to
marriage or after separation and property acquired by gift or inheritance
(regardless of whether the person is married) is considered"separate
The distinction between labeling an asset as "community property"
or "separate property" is important for three main reasons.
In terms of management and control, both spouses have equal management
and control of community assets, but neither can dispose of community
assets without the knowledge and consent of the other. In contrast, each
spouse alone has management and control of their own separate property
assets and can dispose of these assets in any manner and without the knowledge
or consent of the spouse.
Community assets may be levied against for a debt incurred by either spouse
before or during marriage. For example, a court could force the sale of
a community property asset to satisfy the pre-marriage debt of either
party. In contrast, separate property assets can only be levied against
for a debt incurred by the separate property owner.
Finally, absent an effective estate planning device (i.e., a will or trust),
upon death community assets are transferred wholly to the surviving spouse;
whereas separate property assets are divided between the surviving spouse
and other living relatives.