Community Property Timing and Source Rule (California)

Diagram summarising community property timing and source under California and federal law — Visual summary of community property timing and source

Why Timing and Source Decide Every Community Property Question

Every community property timing and source analysis on the California Bar Exam starts the same way: figure out when an asset was acquired and how it was acquired. Get those two facts right, and the characterization almost writes itself.

This two-factor approach is the backbone of California community property law. Examiners build entire fact patterns around a single paycheck, gift, or inheritance landing at an awkward moment in the marriage timeline, so mastering the framework pays off on every property question you see.

What Is the Timing and Source Rule?

The timing and source rule holds that California characterizes property by asking when it was acquired (before marriage, during marriage, or after separation) and how it was acquired (through community labor or through gift, inheritance, or separate funds). Both answers combine to fix the asset’s character at the moment of acquisition.

The Three Timing Categories

Timing sorts every acquisition into one of three windows:

Before marriage — presumptively separate property (SP)
During marriage — presumptively community property (CP) under Family Code § 760
After the date of separation — presumptively separate property under Family Code § 771

The middle window is where the community property presumption applies. Property that lands outside it starts life as separate property, no matter who worked for it.

The Two Source Categories

Source asks how the property came in, independent of when:

Community effort — wages, salary, and business income generated by either spouse’s labor during marriage
Gratuitous transfer or separate funds — gifts, inheritances, bequests, or purchases traceable to separate-property money

Source can override the timing presumption. An inheritance received during marriage is still separate property, because gratuitous transfers to one spouse are never community property, regardless of timing.

How Timing and Source Interact

The two factors work together, not independently. The table below shows how common fact patterns resolve once both coordinates are known.

Timing	Source	Result
Before marriage	Any	Separate property
During marriage	Community labor/earnings	Community property
During marriage	Gift, inheritance, or bequest	Separate property of recipient
During marriage	Traceable separate funds	Separate property
After separation	Any (including work)	Separate property (FC § 771)

Notice that “during marriage” alone never guarantees community property. You still have to check source before you commit to a characterization.

Worked Example: Hank’s Salary and Wendy’s Inheritance

Hank and Wendy marry in 2020. In 2023, Hank earns a $90,000 salary from his engineering job. That same year, Wendy inherits $40,000 from her uncle’s estate.

Analysis: Hank’s salary is acquired during marriage (timing) through his labor (source), so it is community property — Wendy owns an undivided one-half interest even though only Hank worked for it. Wendy’s inheritance is also acquired during marriage (timing), but the source is a gratuitous transfer, so it is her separate property. Hank has no ownership interest in it, and it stays separate as long as Wendy can trace it and avoid commingling it with community funds.

Now add a wrinkle: the couple separates on August 1, 2025. Hank keeps working and earns $8,000 in September. That income is post-separation (timing) even though it comes from labor (source), so under FC § 771 it is Hank’s separate property. The community economic partnership has ended.

Common Mistakes to Avoid

Bar examiners love to test these errors because they are so tempting under time pressure:

Assuming title controls. Title is evidence of ownership, not the final word. A house titled solely in one spouse’s name can still be community property if it was purchased during marriage with community earnings.
Treating all marital-period income as community. Rental income from a spouse’s pre-marital separate property stays separate, even though it is received during marriage.
Ignoring the exact day of separation. Income earned the day before separation is community; income earned the day after is separate. In high-earner cases, this line matters enormously.
Forgetting that characterization can change. The character fixed at acquisition is the default, but a valid transmutation (a signed writing) can later convert separate property to community property, or the reverse.

California Bar Exam Strategy

On the exam, state both coordinates explicitly before you announce a conclusion: “This asset was acquired [when] through [how]; therefore it is [characterization].” Graders are trained to look for that analytical chain, not just a correct label dropped at the end of a paragraph.

Also flag tracing issues early. Whenever separate funds and community funds mix in the same account, note that the burden falls on the spouse claiming separate property to trace and segregate the funds. If the record does not let you do that clearly, say so — that ambiguity is often the point of the question.

FAQ

Does it matter whose name is on the title?

No. Title is relevant evidence but not dispositive. California characterizes property by timing and source at acquisition, so community funds used to buy an asset titled in one spouse’s name can still create a community property interest.

Is an inheritance received during marriage community property?

No. Inherited property is always separate property of the inheriting spouse, no matter when it is received — before, during, or after the marriage. The gratuitous-transfer source overrides the during-marriage timing presumption.

Can separate property become community property later?

Yes, through transmutation. Since January 1, 1985, California requires a writing signed by the spouse whose interest is being adversely affected. A verbal agreement or informal understanding is not enough to change an asset’s character.

Key Takeaways

Characterization always requires two answers: when the property was acquired and how it was acquired.
Property acquired during marriage through labor is presumptively community property under Family Code § 760.
Gifts, inheritances, and traceable separate funds remain separate property even if received during marriage.
Earnings after the date of separation are separate property under Family Code § 771.
Title is evidence, not proof, of characterization; timing and source control.
Transmutation can change an asset’s character, but only through a signed writing.

This article is educational and is not legal advice. Consult a licensed California attorney about your situation.