What married couple must watch out for when they purchase a property in California?

What married couple must watch out for when they purchase a property in California?

The complexity of purchasing a property during the marriage with the separate property of one spouse or with part separate property and part community property

            In such cases that the real property is purchased with either separate property of one spouse or part separate and part community property, the dilemma begins as to what should control the character of the property the title that the couple have taken or the source of the funds.

As of 1984, the Legislature determined that all joint tenancy property acquired during marriage would be presumed to be community property at divorce. In our previous blog, we discussed that one spouse can rebut the effect of title on the property by looking at the funds used to purchase the property. Although that applies to certain kinds of transactions, this general rule does not apply to real property taken under joint tenancy.

The best way to understand why the funds would not control is that when spouses taken the property in joint tenancy it is tantamount to an agreement to hold the property jointly. Thus to rebut the presumption of community property there must be another agreement. In a nutshell, an agreement must always be rebutted with another agreement. Tracing of funds to the source will not rebut the presumption that property held in joint tenancy is not community property at divorce. Therefore, if one spouse used his/her separate property as a down payment and the title was taken under joint tenancy, the community property presumption applies and the couple must divide the real property in half under community property rule.