Legal Definitions - Quasi-community property

Quasi-community property refers to assets that a married couple acquired while living in a state that does not follow community property laws. When this couple later moves to a community property state (such as Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin) and subsequently divorces or one spouse passes away, the new state's courts will treat these previously acquired assets as if they were community property.

The purpose of quasi-community property rules is to ensure a fair and equitable division of assets acquired during a marriage, even if the couple lived in different states with different property laws over time. Generally, this means the assets are subject to an equal division between the spouses, just like traditional community property, even though they weren't originally considered community property when first obtained.

• Example 1: Divorce After Relocation

  Mark and Lisa married in Illinois, a state that follows common law property rules, and lived there for 18 years. During that time, Mark worked as an executive, and they accumulated a substantial joint savings account and purchased a vacation condo in Florida. Lisa was a full-time artist, contributing significantly to their household and family life. They then moved to California, a community property state, and two years later, decided to divorce.

  In this scenario, the California court handling their divorce would classify the funds in their joint savings account and the equity in their Florida condo, accumulated during their marriage in Illinois, as quasi-community property. This means that despite being acquired in a common law state, the court would treat these assets as if they were community property acquired in California, and they would typically be divided equally between Mark and Lisa as part of their divorce settlement.

• Example 2: Probate After Relocation

  Sarah and David lived in Pennsylvania, a common law state, for 25 years. During this period, David worked as a professor and accumulated a significant retirement fund solely in his name, while Sarah managed their household and volunteered extensively. They later retired and moved to Nevada, a community property state. Five years after moving, David passed away without a will.

  Because they were domiciled in Nevada at the time of David's death, a Nevada probate court would apply quasi-community property rules. David's retirement fund, accumulated during their marriage in Pennsylvania, would be treated as if it were community property. This means Sarah would likely be entitled to half of the retirement fund, even though it was solely in David's name and acquired in a common law state, ensuring a more equitable distribution of assets acquired during their marriage.

• Example 3: Business Assets and Relocation

  Maria and Juan were married in New Jersey, a common law state, where Maria started a successful tech company that grew significantly over 10 years. All the company's shares were held in Maria's name. They then decided to move to Texas, a community property state, for new business opportunities. After three years in Texas, they decided to separate and file for divorce.

  Even though Maria's company was founded and grew while they lived in New Jersey, a Texas court presiding over their divorce would likely classify the value of the company's shares acquired during their marriage as quasi-community property. This means that despite the shares being solely in Maria's name and acquired in a common law state, the court would treat the business as if it were community property acquired in Texas, and its value would typically be divided equally between Maria and Juan as part of their divorce settlement.