California is a community property state, which means that items accumulated during marriage are generally considered to be joint assets. Meanwhile, anything that you acquired before the marriage is typically classified as separate property. However, it is possible for separate property to become community property if you’re not careful.
When separate funds become joint funds
If you have funds in a separate account prior to the marriage, there are several ways in which they can be commingled. First, if you use those funds to acquire or maintain a joint asset like a car or home, they can be considered community property. If you deposit marital funds into that account, they can also be reclassified as a joint asset. Finally, a separate account may become a joint asset if you deposit funds from that account into a one that is jointly held.
How tangible separate assets become community property
If you owned a home prior to getting married, it can become a community asset for property division purposes if your spouse used their own money to improve it. It can also become a marital asset if you put your spouse on the deed or otherwise title the asset so that your spouse has ownership rights to it. A car, art collection or other separate property can also become commingled if your spouse contributes funds to make loan payments or to maintain them.
In a divorce settlement, you may be able to keep assets even if they are classified as community property. For instance, you may be able to retain a business by waiving your right to funds in a bank or brokerage account. You may also use a prenuptial or postnuptial agreement to stipulate that certain items are to retain their separate status in a divorce.