Hey everybody, it's Andy and welcome again to my office in Modesto, California. I'm
an attorney licensed to practice law in California as well as New York and in
this video, I am going to go over a scenario that, to be frank with you guys, actually
occurs with alarming frequency, I think, in California divorce cases. The scenario
relates to community property. So for those of you who, I guess, don't know what
community property is or maybe you live in a state that doesn't use it, let
me kind of give you some background. So whenever a couple divorces, whenever
they split up, you know, for example, they inevitably have stuff that needs to get
divided. It might be a house, let's say, it might be furniture, bank accounts, 401ks.
It could be debt, medical debt, you know, credit card debt, etc. So, each state
basically has ways to divide stuff like that when a couple is divorcing. The way
that California does it is via a scheme called Community Property. So think of it
like three buckets, I guess. So bucket number one is going to be all the stuff
that spouse number one - let's suppose number one is the husband - it's
going to be all the stuff that husband owned from before the marriage,
all the stuff that he acquired during the marriage via gift or
inheritance, let's say. All of that stuff is going to be his separate property.
That's going to be in this first bucket over here. If you understand that, you
know, hopefully you can take that same idea and apply it to spouse number two.
Let's say suppose number two is the wife. So you're gonna have all of wife's
separate property in bucket number two right here. And all the stuff - probably
basically, like all the other stuff that's not in either of these two
buckets - is going to be a community property. That's the stuff that the
couple has acquired together while they were married. All of that is going to be
in bucket number three over here. So the way that it, it basically is done in
California is that everything in this community property bucket has to get
divided basically fifty-fifty. So, um, yeah, I guess, so that's the basic sort of idea
and the scenario that I encounter a lot is basically this. Let's say that during
the marriage that, you know, the couple acquires something
pretty big, so let's say it's a house or let's say that spouse number one works
for a software company. He gets a bunch of stock while he works at the company.
The company goes public. So this stock suddenly overnight went
from, you know, basically nothing, worth nothing, to worth say fifteen million
bucks. And during the course of the divorce,
you know, spouse number one - the husband, again, in my scenario - husband
number one might think 'Well, you know, this house is mine, like I bought it, you
know, it's something where I'm paying the mortgage from my salary. She doesn't
work, you know, I'm not going to give her this house. So tell you what, her name is
on the deed but I'm going to figure out a way to remove her name from the deed. I'm
going to have her sign a quit claim deed, let's say, and if I do that the house will be
just in my name. I won't have to give it to her. I won't have to split her or give
her any share, let's say. Aren't I so smart for thinking of that?' And then for
the stock also you can probably imagine he'll go like 'Okay well, tell you
what, I'm gonna take all fifteen million dollars of stock right here I'm going to
put it into a brokerage account that just has my name on it. I'm going to put my
name on all the documents related to this stock. Her name is not going to be on
anything. Therefore I won't have to share, you know,
seven and a half million bucks possibly worth of stock with her. Aren't I so
smart for thinking of that?' Um, and I guess, what's the polite way to put this? It
does not work that way. So the short answer, like that's basically the
short answer. It does not work that way. It's, like I guess I'm struggling to find
the right word here like I've seen the scenario play out in court multiple
times on other cases. I've had several cases where this scenario basically has
played out also and to say that it basically never works, I think, would be
an understatement. A lot of times, in my cases, when the other spouse is trying
this, it crashes and burns in spectacular fashion, like this is such a basic thing
that it's really not worth trying to kind of play games or tricks or try
to hide stuff. Community property basically will, will win out at the
end of the day. So, yeah, so I mean, let me get off my soapbox, I guess, and give you
the actual explanation. So the short version of the answer is that it does
not work that way. Community property doesn't work that way.
You can put this stock in an account that has just your name on it.
It doesn't matter. Community property still applies. You can take, you know, her
name off the deed to the house. It doesn't matter. Community property still
applies. So that's the short answer. The longer answer, I guess, kind of
involves the the statutes, the cases, etc. So the, I guess, I mean, if I had to say it,
I guess, like you know I could sort of understand where the husband, I guess, in
my scenario is coming from. Like what his thought process is, like why he would
think 'Well, you know if I take her name off the deed to the house, the house
becomes mine. You know, I can sort of understand I guess where that comes from.
In general, for instance, if you're trying to find out, you know, who owns a house,
who owns a vehicle, I think a lot of us would basically look at the title
documentation, be satisfied with it and go like 'Yes, you know, Andy Chen owns this house
because his name is on the deed' for instance. Uh, and same thing for a car, 'Andy
Chen's name is on the title. You know, nobody else's name is on the title.
Therefore this car belongs to Andy.' So I think that kind of makes sense to a
lot of people kind of in general. And California has a statute that sort of
goes over what I just, you know, kind of described. It's California Evidence Code
section 662 which I'll write kind of right here as well as link down below
for you in case you want to go look at it. But 662 basically says this: whenever you
have a piece of property that you're trying to determine the ownership of,
title documentation is going to be assumed to be correct. Other evidence can
be introduced so title documentation is not dispositive, but title documentation
is where you're generally going to start. So that's sort of why I
think husbands in my scenario sort of think that they can get away with a
scheme like this. Community property, however, is an exception to 662. So 662
does not occur, like it doesn't apply universally, absolutely everywhere.
Community property is an exception to it and the case that I learned this on is
called Marriage of Dekker which I'll write over here as well as write down
and put the cite to it also. I haven't Google Scholared it or something like
that, but I'm pretty sure you can find it on, for instance, Google Scholar. So, um,
Marriage of Deker basically kind of, if I have to summarize it, basically says
that 'Okay, well you know, 662 normally would apply. Normally you would rely on
the deed to the house to figure out who owns it. You would rely on the pink slip
to a car to figure out who owns it. If, however, there's community property that
applies, community property will basically supersede. So the thing is, you
know, if there is a house and there's a divorce going on and, you know, there's
community property possibly at play here, you don't look at just 662. You might
consider it, for instance. However, you're also going to look at other factors. For
example, when was this house purchased, was it purchased before the marriage or
after the marriage? So the date is going to be really important. You're going
to look at how the, or how the house, rather, was acquired. Was it by gift,
was it by inheritance, etc. If you bought the house after the marriage, was the
house actually purchased with funds that were from before the marriage, let's say.
Let's say husband sold the house, sold the house prior to marriage, held on to
the money. After they married, the husband bought the house paid for it himself. In
that scenario, maybe the house is separate even though it was acquired
after the marriage actually happened. So Marriage of Dekker is not the, kind of,
only case that goes over it. It's the case that I learned this on and I
know that a lot of judges that I've been in front of will rely on Dekker, for
instance, but you know there are other cases. I don't mean to say that Dekker is
the only one. But for better or worse, I guess, like you know a lot of times in
law, the, the name of the case where, you know, if like the idea was first
originated or, you know, the the case that was the most famous, you know, one that
actually discussed this, the name of that case is then attached to that concept
for perpetuity. And in this case Dekker, I guess, seems to be the one, seems to be
the case rather, where this idea was, like the name attaches to it. So
hopefully all of that makes sense. So I guess to kind of summarize for all of
you, community property is really powerful in California. It applies to a
lot of different property in a divorce. It applies in a variety of different
ways. So normally outside of a divorce context,
let's say, you would normally rely on title, pink slip, deed, etc. You would rely on
the names that are on those documents to determine who owns a piece of property
or who doesn't own that property. However, if you have a divorce scenario,
California divorce scenario, where community property possibly will be at
play, you know, on this house, let's say, you know, community property,
you know, one spouse has a community property portion to it possibly, you are
generally not going to rely on just 662, Evidence Code section 662. You have to go
in deeper to look at how was this property acquired, when was it acquired,
how was it paid for, etc, etc. And only after doing that can you really
determine 'Okay even though this house was purchased after, purchased after
marriage, it's still separate property for these reasons. Even though this, this, you
know, this vehicle, let's say, only has wife's name on it, the husband still has
a claim to it. You know similarly for this stock, this stock was acquired
during the marriage and just because husband put it into an account in just
his name, that doesn't change anything. Wife's community property interest is
still there. So she's therefore still entitled to, you know, half of it or a
third of it or something. So that's the basic idea. If you are thinking about
trying to kind of cheat community property or to kind of go around
community property's rules by just putting stuff in your own name, you can
certainly try. In my experience I've never seen that work before and it's
actually quite hilarious when people try to do it, like they they go in there with
a lot of confidence and they, they crash and burn spectacularly, I guess is
what I'm trying to say. So, yeah, I guess if you are the kind of wife in the
scenario that I've sort of been using, like, you know, your soon-to-be ex spouse
is trying to cheat you out of community property, let's say, hopefully this video helps you.
But yeah, I guess, you know, if you're trying to kind of play games like this,
don't. Like it doesn't work. Like just save everybody the grief, the time, the
effort, etc. Yeah. So, anyway, hopefully all that made sense. You know if you are
in this scenario, you know, possibly, you know, trying to cheat your, your
soon-to-be ex out of property, don't bother. If your soon-to-be ex is trying
to cheat you out of property, hopefully this video kind of helps you and you can
put a kibosh to all of that. Yeah, so anyway, again hopefully all that helps
and go ahead and share, comment, like, subscribe all that stuff and I will talk
to you guys next time. Thanks.