This article has been written by Priyanka Jain and edited by Shashwat Kaushik.

It has been published by Rachit Garg.

Introduction 

During “dissolution of marriage” in the State of California, by way of divorce or death of the spouse, several issues are to be settled, like spousal support, child custody, child support, child visitation, characterization, valuation and division of movable as well as immovable property. There is always an equitable distribution of assets between the splitting couple. The division of assets is a huge task in such dissolutions.

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The concept of quasi community property is a legal system that governs the division of property in California in some  situations. Arizona, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are the other eight states in the union that adhere to the community property doctrine, which holds that marital property is usually equally owned by both spouses. California is one of those nine states. However, quasi-community property comes into play when couples move to the State of California from another state that does not follow the community property rules, like Florida, which is an equitable distribution state.

Meaning of quasi-community property

The concept of quasi-community property usually has two concepts:

  • divorce;
  • death of a spouse;

In the context of divorce, we have the California Family Code:

As per California Family Code § 125, all real or personal property wherever situated, acquired in any of the following ways is quasi community property. 

  1. Either spouse, while domiciled elsewhere, would have been community property if the spouse who acquired the property had been domiciled in California at the time of its acquisition.
  2. In exchange for real or personal property, wherever situated, that would have been community property if the spouse who acquired the exchanged property had been domiciled in California at the time of its acquisition

To apply the California Quasi-Community Property Doctrine to parties domiciled elsewhere, two conditions must be met, as mentioned in Addison vs. Addison (1965) and In re Marriage of Roesch (1978):

  1. Both spouses must have changed their domicile to the State of California, and
  2. after the change of domicile, the spouses must seek legal alteration of their marital status in the State of California.

Thus, when one party does not move to the State of California, the court does not have jurisdiction over out-of-state property that was separate property in the other state.

In the context of the death of a spouse, we have the California Probate Code:

As per Section 66 of this Code, “quasi-community property” means property other than community property as defined in Section 28:

  1. If the deceased had been residing in this state at the time of acquisition, all personal property, regardless of location, and all real property located in this state, whether acquired by the deceased while residing elsewhere, would have been the community property of the deceased and the surviving spouse.
  2. If the decedent had been residing in this state at the time the property was exchanged, then all personal property, wherever it may be located, and all real property located in this state, whether acquired previously or subsequently, in exchange for real or personal property, wherever it may be located, would have been the community property of the decedent and the surviving spouse. 

Section 28 of the California Probate Code defines community property as follows:

  1. Community property heretofore or hereafter acquired during marriage by a married person while domiciled in this state  
  2. The laws of the location where the acquiring spouse resided at the time of the acquisition apply to all personal property, regardless of location, and all real property in this state that was previously or subsequently acquired during the marriage by a married person while residing elsewhere. This includes community property and other substantially equivalent types of marital property.

Here, we can understand that quasi-community property is exclusive to community property. The main difference involves the address of real estate. In divorce matters, quasi-community property means all estates are independent of their location. In death cases, quasi-community property means all estates situated only in the State of California.

Normally, quasi-community property is divided like community property for the purpose of property division after the death of one of the spouses.

Real aspect of quasi-community property

Criminal litigation

One of the most essential matters in divorce cases is the division of property held by both spouses at the time of divorce proceedings. This poses various questions before the Hon’ble Courts, depending on the facts of each case. Few are as follows:

  1. Who is who?
  2. What do both the divorcing spouses show this time, like what they have?
  3. Who is about to get what?
  4. Where are both parties staying currently? Inside California or outside California?

If the answer to the fourth question is outside the State of California or in another place than the State of California, division of property becomes tricky.

Let’s understand the meaning of the Quasi-Community property in a simple way:

Let’s suppose A and B get married. Where A is the husband and B is the wife. A moved out of California for any purpose, like running a business, carrying out research, or pursuing a good job, outside the State of California. Now, he has to acclimatise there to ensure professionalism, performance, meeting to turn around time or simply speaking to deliver his hundred percent to his commitment. So he and his wife B both decided to have a capsule apartment for A to stay in and manage his life-style to do justice to his endeavour.

Character of the property

Now let’s understand the character of this property. This property was purchased:

  • During the subsistence of marriage of both A and B;
  • Outside the State of California.

Now the question is what is the character of this property? If this property had been purchased in the State of California, it would be community property. Since it was purchased outside the State of California, it is in the form of community property, so it is quasi-community property.

In death cases, in matters of intestate succession, fifty percent of the decedent’s quasi-community property is considered of the surviving spouse, and the rest fifty percent is of the decedent’s. But the same calculations are not meant for the surviving spouse. The quasi-community property of the surviving spouse is only that of that spouse.   has no ownership, either joint or several, over it.

When a property is characterised as quasi-community property, the court will look into whether both spouses relocated outside their home. If yes, the doctrine of quasi-community property applies; otherwise, no.

Now the next question is: What does it include? The answer is that it can include movable assets like cars, furniture, etc. It also includes the earning of one’s spouse’s earnings outside the State of California, savings accounts, business accounts, insurance, and intellectual property as registered patents.

What does it not include? The answer is separate property as defined under California Family Code § 2502. According to this provision, separate property can be acquired before one gets married or after getting divorced. It can be acquired during marriage when it is gifted to one of the spouses exclusively. Or it is inherited by only one of the spouses. If any asset is further bought by the spouse from his inherited property, that will be separate in nature.

Property is not necessarily divided by the Hon’ble Court. Both spouses can also enter into an agreement for the division of assets. This agreement can be pre-nuptial or post-nuptial.

Conclusion

The quasi-community property doctrine says that “property gained during the   marriage will be divided equally, as it belongs to both of the spouses.” It will be divided equally.

This approach solves the complexities of  questions regarding the division of assets in a just manner without giving any precedence to either spouse over the other. Even if the property was acquired by one spouse through intellect and sheer hard work, it is still jointly owned by both spouses. Here, the Hon’ble Court assumes that the married couple would have acquired this property by doing planned and continuous hard work if they had been staying with each other in the State of California.

In divorce proceedings, quasi-community property encompasses all assets irrespective of their location, whether in the State of California or outside the State of California and they are considered community property if acquired while living in the State of California. The foundation of this doctrine is based upon the principles of natural justice like equity, justice, fairness and good conscience. This doctrine is not so appealing in divorce cases as it suggests division of property, but in death matters where one spouse is juggling social expectations on the one hand and emotional imbalance on the other hand, this doctrine acts as a safeguard for the economic status of the surviving spouse. This doctrine goes beyond the legal landscape, focusing more on the bond of love that a family shares , stability of finance and equitable treatment during the transition of family life from ‘we’ to ‘I’,  from ‘ours’ to’mine’, and from ‘us’ to ‘me’.

It can be a guiding light for other legal systems to evolve their personal property laws too.

References

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