What Is Community Property?

• In California, community property is all property acquired during marriage, with the exception of certain types of separate property as defined by California statutes. California recognizes gifts to one spouse but not the other or an inheritance to one partner but not the other as separate property. California also considers all income derived from employment --- including pension plans --- as property belonging to the community. Additionally, any money spent on education or degrees is considered community property, such that if a marriage ends in divorce, one partner is reimbursed one-half of the money spent on the other partner's education costs.
  
  

How Is Community Property Valued?

• One of the most difficult tasks for a court during divorce proceedings is to make value determinations regarding specific types of community property. For example, if a married couple owns a business, a forensic accountant may need to determine the value of the business by examining books and records. Coming up with the total value of a business is complex, as most businesses have "goodwill" value, which is the expectation of future business.
  
  

How Is Community Property Divided?

• During divorce, California courts divide community property so that each spouse receives exactly one-half of the marital estate. California courts do not distribute community property "in kind," meaning that one spouse may get to keep the marital residence while the other keeps other marital assets. The important thing is that each spouse receives one-half of the value of all marital assets. Typically, all marital debts and obligations are deducted from the marital estate, and the remainder is divided between the spouses equally. Upon the death of a spouse, the surviving spouse is entitled to one-half of the marital estate. Additionally, when a spouse makes a will, he cannot bequeath more than his one-half share of the marital estate.
  
  

Other Considerations

• California does not consider enhanced earning ability as part of the community property estate. This means that if a spouse receives a professional degree during marriage and the marriage ends in divorce, the other spouse is only entitled to one-half of the costs of tuition. The enhanced earning ability of the spouse who obtained the professional degree is not considered part of the marital estate. Regarding the marital residence, the spouse who is the primary caretaker of the children typically gets to keep the marital residence upon dissolution.