Under California law, there is a community property presumption. This means that any property acquired by one or both spouses during the course of the marriage, and while they are domiciled in California, is presumed to be community property.
This legal presumption seems pretty basic, but there are many exceptions and instances when the presumption can be defeated in family law proceedings.
For one thing, this presumption does not apply to inheritances or gifts acquired by either spouse or domestic partner during the marriage, which are treated as separate property.
For another, the California Family Code sections 850-853 also allows the spouses to “transmute” community property to the separate property of either spouse. There are requirements for such transmutation, but it does emphasize the fact that spouses may choose to treat what would otherwise have been community property as separate property.
In addition, California Family Code section 750 further provides that: “Spouses may hold property as joint tenants or tenants in common, or as community property, or as community property with a right of survivorship.”
The difference between the types of ownership under CFC 750
It might be helpful to first look at what these different types of ownership under section 750 of the Family Code mean.
Joint tenancy
Spouses or domestic partners have the option of taking title and ownership of a property as joint tenants. This means that they are separate owners of an undivided interest in the property, which they can later dispose of as if it were their separate property without need of the joint tenant’s consent.
In order to create a valid joint tenancy (as opposed to a tenancy in common), both spouses or partners must have acquired the property at the same time and through the same title document. They must also hold equal interest in the land while exercising equal rights to possession and carry the joint responsibility for its maintenance. If these requirements are not met, a tenancy in common may be presumed.
One of the benefits of owning a property under a joint tenancy is that it helps the parties avoid probate through the right of survivorship.
This means that if one party should die, the share of the deceased in the property automatically passes to the joint tenant without the need to go through probate.
Tenancy in common
As tenants in common, the married couple or domestic partners can hold unequal shares of the property, but they share equally in the possession of the property, otherwise referred to as “unity of possession.”
Tenants in common are also allowed to sell, transfer, gift, or assign their share in the property to another person outside of the marital relationship or domestic partnership.
Unlike a joint partnership, however, there is no right of survivorship in a tenancy in common. Should one tenant in common die, his share in the property is subject to the laws of inheritance and probate.
Community property
As earlier defined, community property is any asset or property acquired by the spouses during the marriage while they are domiciled in California.
Legally, the spouses or domestic partners are no longer treated as separate individuals but as a “community.” Should the marriage or domestic partnership be dissolved, community property is shared equally between them.
Community property with a right of survivorship
This type of property system is relatively new and was only implemented in California in 2001.
A community property with a right of survivorship basically combines the benefits and advantages of community property and joint tenancy, by basically applying the advantage of right of survivorship to community property.
This means that the married couple still own equal shares in their properties while still having the advantage of avoiding probate through the right of survivorship.
But unlike in joint tenancy, one spouse cannot sell or dispose of their portion of the community property to a third person. Property under a community property regime with a right of survivorship restricts ownership of such property to the spouses.