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Community property (California marital property)
Since 1849· Legal document or tool
Law or rule (2026)Set by statute, regulation or the agency; numbers change yearly.
California's rule that most property earned or bought during marriage belongs equally to both spouses, whatever the title says.
See it on the Personal Finance & Estate map →How it works
Earnings and purchases during marriage are community property; assets owned before marriage, or received by gift or inheritance, are separate. Commingling blurs the line. At death, each spouse can leave only their half of community property. The big tax benefit: when one spouse dies, both halves get a step-up in basis, erasing built-in gains. Couples can reclassify property by written 'transmutation' agreement, and title as 'community property with right of survivorship' passes everything to the survivor without probate.
Why it matters for you
For a couple holding appreciated real estate, how title is held can decide whether heirs owe capital-gains tax on decades of growth.
Think of it like
Like a 50/50 partnership formed automatically at the wedding, regardless of whose name is on the deed.
Rules, limits and sources (2026)
California's 1849 constitution adopted the Spanish-Mexican rule; Family Code Secs. 760 and 852 (transmutation); IRC Sec. 1014(b)(6) gives the double step-up. Nine states use community property.
Watch out for
Tracing separate versus community money in long marriages, such as a building bought before marriage but paid down during it, is often disputed; ask your attorney.
Connections (4)
▸Community property (California marital property) shapes what passes under Last will and testamentLaw or rule (2026)
How they connect
A married Californian's will can dispose of only their half of community property, plus all of their separate property. A will leaving a whole community-property house to children from a first marriage fails as to the surviving spouse's half. Sorting out what is community or separate is the first step in any will.
When it applies
Applies to every married couple and registered domestic partnership in California, at the first spouse's death.
The rule
California Probate Code Secs. 100 and 6101 limit a will to the decedent's half of community property plus their separate property.
Watch out for
If a will appears to give away the survivor's half, the survivor may have to choose between its gifts and that half (an 'election'); courts read intent from the wording.
▸Community property (California marital property) gets a full, both-halves Step-up in basis at deathLaw or rule (2026)
How they connect
In California, when one spouse dies, both halves of community property get a stepped-up basis, not just the decedent's half. A building bought for $1 million and worth $5 million gets a full $5 million basis for the survivor, erasing gain and recapture. Separate property held in joint tenancy gets only a half step-up.
When it applies
Congress added the both-halves rule in 1948 for the community-property states, now nine, including California.
The rule
IRC Sec. 1014(b)(6); California Civil Code Sec. 682.1 created 'community property with right of survivorship' title in 2001.
Watch out for
Assets titled in joint tenancy may still be community property, but proving it can be contested; ask an estate attorney to review title.
▸Community property (California marital property) passes wholly to the spouse under Intestate succession (dying without a will or trust)Law or rule (2026)
How they connect
Under California's default rules, the surviving spouse or registered domestic partner receives the decedent's half of community property, so the survivor owns all of it. Children inherit only from separate property. In blended families, children from an earlier marriage may get nothing from that property unless a will or trust provides for them.
When it applies
Applies at the first spouse's death when no will or trust covers the community property.
The rule
California Probate Code Sec. 6401(a)–(b) gives the surviving spouse the decedent's half of community and quasi-community property.
Watch out for
Children can still dispute whether assets were community or separate, especially when separate property was mixed with marital funds.
▸Community property (California marital property) usually must be split to fund a Spousal lifetime access trust (SLAT)Watch out
How they connect
A SLAT must be funded with the donor spouse's separate property. If community property goes in, the beneficiary spouse is partly funding their own trust, which can pull assets back into their estate. California couples therefore usually sign a transmutation agreement first, converting some community property into each spouse's separate property.
When it applies
Done by California estate attorneys just before funding, with both spouses advised, ideally by separate counsel.
How sure?
California Family Code Sec. 852 requires transmutations in writing; IRC Sec. 2036 creates the estate-inclusion risk.
Watch out for
Transmutation gives up the double step-up on converted assets and can affect divorce rights; both spouses need clear advice before signing.