California Family Law Code 770 sets forth the definition of “separate property of a married person:”
(1) All property owned by the person before marriage;
(2) All property acquired by the person after marriage by gift, bequest, devise or descent.
(3) The rents, issues, and profits of the property described in this section.
It seems simple, but it is not:
For instance, what if a person owns real property (such as a home) before marriage and then the spouse makes the house payments? The spouse who makes the house payments gets certain community property (joint) credit based upon a Moore/Mardsen calculation for certain items included in the house payments. Remember also that the earnings of the spouses after marriage may become community property depending on the source of the income.
In addition, under California Family Law Code 771 , the earnings and accumulations of a spouse and the minor children living with, or in the custody of the spouse after the date of separation of the spouses are the separate property of the spouse with an exception: the earnings and accumulations of an unemancipated minor child related to a contract of a type shall remain the sole legal property of the minor child. [This is especially relevant in California for minor television and film actors.]
To further complicate the issue, what if the separate property asset gets intermingled with community property? Then the process of tracing must transpire. This process may be difficult or impossible if the records are very old.
Another unique problem is a business owned before marriage and both spouses worked on during the marriage or one spouse had a business but did not work on the business very much, and the list goes on and on.
Of course, a prenuptial agreement can be used to cover the parties’ intent on the separate property assets upon marriage, and if the prenuptial agreement is declared valid, then those provisions can be upheld in California courts.