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