What Happens to Real Property Owned Outside the State in a California Divorce?

What Happens to Real Property Owned Outside the State in a California Divorce?

Have you ever wondered whether California judges have the right to make rulings that relate to out-of-state property? In divorces and legal separations, one of the most important aspects of the case is the division of the couple’s property. Often, in addition to owning property in the state of California, one or both of the partners own real property—generally known as land—out-of-state.

California family law judges do not have jurisdiction over real property that is located outside the state. Therefore, they cannot make orders that directly affect the property itself. However, they do have jurisdiction over the parties to the proceeding and can therefore require the parties to take certain actions or risk being held in contempt of court.

Under California law, property acquired by either party during the marriage is generally considered to be community property. You may read more about the nature of community and separate property here. Community property is subject to equitable distribution in a divorce or legal separation proceeding.

Out-of-state real property is known as quasi-community property if it is acquired in one of two ways:

  • By a spouse “while domiciled elsewhere which would have been community property if the spouse . . . had been domiciled” in California at the time; or
  • By a spouse “in exchange for” such property.

Quasi-community property is treated as community property for the purpose of equitable distribution.

If an asset is deemed to be quasi-community property, California law provides that a judge must first try to award the property to one spouse and offset its value by awarding property of equal value to the other spouse. If this cannot be done, the judge may decide to take one of the following two routes:

  • “Require the parties to execute conveyances . . . as are necessary”; or
  • Award the party who is not obtaining an interest in the property “the money value of the interest in the property” she would have received.

The value of out-of-state real property can be a significant issue in a California divorce or dissolution proceeding. If you are involved in such a proceeding and disputed property rights are involved, you want an attorney with substantial experience in Northern California who will represent you aggressively. Please contact the Law Offices of Judy L. Burger at (415) 259-6636 to learn more.

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