How to Deal With Community Property

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Many people who are now divorced were awarded property that was formerly community property, but is now their separate property.

In many cases this is a home, vehicle and/or retirement accounts or pension plans. At some point, many people who divorce, meet the right person and wish to get married once again. How does the new marriage affect your separate property assets upon remarriage? Even if this is your first marriage, the following California law will apply to you.

Did you know that your earnings become
the property of both spouses upon marriage?

Yes, your earnings are no longer your separate property upon marriage. Your earnings and your spouse’s earnings are now community property in California. Let’s say that you and your new spouse decided to live in your home which was awarded to you in your divorce. You have a mortgage against that home that you continued to repay it after your remarriage. Even if the home was paid off at the time of your divorce, it is possible that you had to take a new loan or refinance the old loan in order buy out your former spouse. Or perhaps you took a new loan to make improvements to the home before you remarried. This situation may become a problem if any payments you make to pay down the principal on the mortgage against your separate property home, are now being paid with community property funds from your new marriage. In such a case, you are now creating a community interest in your home that you may be required to reimburse to your new spouse in the event that the relationship ends in divorce. You say “Wait, this is my second marriage; it will not end in a divorce.” That’s fine, but know that your new spouse can make the same claim against your estate upon your death. Your children, from your prior marriage, if you have any, may not be protected when and if you leave them what was once your sole and separate property in your will or living trust.

This principle applies to your retirement and pension plan contributions as well. After you remarry, the contributions you and your employer make to your retirement accounts are community property. The time worked to earn a pension during the new marriage is community property. You now have a mixed asset and could find yourself having to give your new spouse a portion of your retirement upon divorce or death.

This principle also applies to other assets that you may purchase prior to the marriage (and took a loan) that you subsequently make payments on during the new marriage. You might find that you have to give your spouse cash or property in the equivalent value in order to keep that fancy BMW that you actually purchased before the marriage.

How Do You Protect Your Separate Property?

A Prenuptial Agreement, also called an Antinuptial or Premarital Agreement can protect you and your spouse from an unknown and unwanted distribution of property upon the divorce or death of a spouse. Although, some people think negatively about being asked to sign such a document, they simply don’t understand the value of having an understanding and correspondingly realistic expectations going into a marriage regarding the distribution of assets in the event of a divorce or death of one of the spouses.

You may be the only parent who has assets to leave to the children of your prior marriage. Your new spouse at the time of divorce or at your death may not find that taking care of your children from a prior marriage is as important as you do.

A complete estate plan may be what your intended spouse and you need to protect your assets in the event of death. It is a good time to discuss an estate plan and include a Prenuptial Agreement in that plan before you get married or remarried. If you are already married, we can help you to reach similar goals to protect you both in the event of divorce or death.

Call our office today to discuss how we can help you to meet your goals to protect your assets prior to marriage, prior to remarriage or if you are now married.


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