What is quasi-community property in California?

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Let’s start with community property

California is a community property state. The nine community property states are all located in the western US except for Wisconsin. The general idea is that married couples share equally in the fruits of the labor while married even if the relative contributions may have been different, therefore “community property”. Separate property is property acquired before marriage and includes gifts and inheritance specifically given to one party. The diverging treatment of marital property in the western United States originated from the partial adoption of Mexican and Spanish law which was then in force in these areas before they acceded to the Union. Spanish and other continental law is not based on the Common Law of England but a reinterpretation of the old Roman civil law which gave women more property rights.

For statutory details regarding the classification of marital property see the sections of the CA Family Code.

But what is Quasi-Community Property and why do we have it?

It has been said that quasi-community property is one of the most frequently misunderstood and misapplied legal principles affecting estate planning. It helps to know why California and some other community-property states came up with that legal concept: Property acquired in a separate property state or community property state retains its respective character even when the couple moves to a different jurisdiction. Imagine a couple has acquired most of their wealth (incl. real estate) in a non-community property state (separate property state), and then retires in  California. When one of the spouses dies, the survivor will have very little community property, specifically, only the wealth added while residing in California. This may leave the surviving spouse with no protection against disinheritance (the forced share from the statute of the separate property state is no longer available). This is where the concept of quasi-community property provides some protection.

While complex, the concept can easily be understood if it is broken down. The key is to differentiate between the divorce and the death context. Please see the embedded Quasi Community Property Infographic.

First off, the definition of quasi-community property depends on the context, i.e., marital dissolution versus inheritance. In either case, quasi-community property is property that would have been community property had the spouse been domiciled in California when he/she acquired it.
In the Marital Dissolution or Family Code context no distinction is made between personal property and real property as far as location is concerned. In either case it applies to property wherever located.
The situation is different in the inheritance or probate code context. Only real property located in California can be quasi-community property.
In the Probate Code context, the distribution upon death depends on who acquired the property. If it is the deceased, 50% of the quasi-community property are his or her to bequeath or devise as he or she wishes, the other 50% belong to the surviving spouse.
Quasi-community property acquired by the surviving spouse belongs upon death of the non-acquiring spouse to the acquiring spouse alone.
If this makes sense, good, but dealing with marital property classifications and the attended consequences is a complex area and competent legal advice is recommended.

 

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