February 12th, 2018 at 12:08 pm
A. Separate property.
B. Community property.
C. It depends.
D. Both separate property and community property.
Answer: Answer A is probably wrong. Property acquired before marriage is generally considered separate property. However, once married, you may use either spouse’s wages (or commission income) earned during marriage to pay for the mortgage, property taxes, utilities, and other housing expenses. Those wages earned during marriage are considered community property. Answer B is wrong. If wages earned during marriage are used to pay the property expenses, your separate property will gradually change over time into community property in a process called “transmutation.” If you eventually get divorced (or a spouse dies), a court distributing the assets may use legally-accepted mathematical formulas to determine how much of the real property is separate property, and how much is community property.
Answer C is the correct answer. It depends on how you will pay for your property expenses during marriage. Maybe your property is an income-generating apartment building. If you keep that rental income in a separate bank account to pay for all your property expenses, and you do not commingle those funds with community property funds, the apartment building will remain separate property throughout your marriage. Or perhaps you already have enough money before marriage to pay all future property expenses. If you keep that money in a separate bank account, and you do not commingle those funds with community property funds, you can again, keep the property as your separate property.
Answer D may not always be correct, but it’s usually what happens because couples typically use their wages earned during marriage to pay for property expenses. That explains why, if you sell your property during marriage, a title insurance company will want your wife to sign a Quitclaim Deed releasing any interest she may have in the property.
-Happy Valentine’s Day everyone!
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