Out-of-State Property in a California Divorce: What the Law Actually Does

When a California divorce involves real property in another state, Family Code section 2660(a) directs the court, if possible, to divide the community property and quasi-community property as provided for in that division of the Family Code in such a manner that it is not necessary to change the nature of the interests held in the real property situated in the other state. If that is not possible, section 2660(b) lets the court require the parties to execute conveyances or take other necessary actions, or award the money value of the interest to the party who would have been benefited.

You may be dealing with a house, an account or a business in another state while the divorce is happening in California, and trying to work out whether it counts and how it is handled.

Key Takeaways

• Family Code section 2660(a): the court shall, if possible, divide the community property and quasi-community property so that it is not necessary to change the nature of the interests held in real property situated in another state.
• Family Code section 2660(b): if that is not possible, the court may require conveyances or other necessary actions, or award the money value of the interest to the party who would have been benefited.
• Family Code section 2550 requires an equal division of the community estate, with exceptions; section 2552 addresses the valuation date.
• Mediation does not remove the duty of financial disclosure under Family Code sections 2104 and 2105.

Property in Another State in a California Divorce

California sorts property into three groups at divorce: community property, quasi-community property and separate property. Sections 125 and 760 both apply to property "wherever situated"; what they turn on is when it was acquired, where the acquiring spouse was domiciled at the time, and, under section 2640, whether the money came from a separate-property source.

The practical wrinkle is real property in another state, which Family Code section 2660 addresses, as described below.

This article walks through each category, the equal division rule, reimbursement for separate money, retirement plans, the disclosure duty, and how private divorce mediation in San Diego County, or online anywhere in California, can address these assets.

Community Property and Why Where You Bought Something Can Matter

Family Code section 760 sets the baseline: except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in California is community property. So a cabin in another state bought while you and your spouse were domiciled in California is community property under this section unless a statute provides otherwise, even though the land is elsewhere.

Separate property is the other side. Under Family Code section 770, separate property includes all property a spouse owned before marriage, all property a spouse acquired after marriage by gift, bequest, devise or descent (an inheritance), and the rents, issues and profits of that property. A spouse may convey their own separate property without the other spouse's consent.

Section 760 applies to property acquired "while domiciled in this state". Section 125 addresses property acquired while domiciled elsewhere.

What Quasi-Community Property Means Under California Law

Family Code section 125 gives the definition. Quasi-community property means all real or personal property, wherever situated, acquired in either of these ways:

"(a) By either spouse while domiciled elsewhere which would have been community property if the spouse who acquired the property had been domiciled in this state at the time of its acquisition. (b) In exchange for real or personal property, wherever situated, which would have been community property if the spouse who acquired the property so exchanged had been domiciled in this state at the time of its acquisition."

In plain words, quasi-community property is property acquired by either spouse while domiciled elsewhere, which would have been community property if that spouse had been domiciled in California at the time of its acquisition. Property acquired in exchange for property of that kind is covered by section 125(b).

Under Family Code section 63, the community estate includes both community property and quasi-community property. The three categories stay distinct: a house one spouse owned before the wedding remains separate property under section 770 no matter which state it is in, and quasi-community property is not a label for anything bought out of state.

The Equal Division Rule and How It Applies to Out-of-State Assets

Family Code section 2550 requires the court to divide the community estate of the parties equally, except upon the written agreement of the parties, on oral stipulation in open court, or as otherwise provided in the Family Code's property division rules. Quasi-community property is part of the community estate (section 63), so it is divided as part of the estate that section 2550 divides equally, and section 2660 directs the court to divide the community property and quasi-community property as provided for in that division of the Family Code.

Real property in another state is where it gets practical. Under Family Code section 2660(a), except as provided in subdivision (b), if the property subject to division includes real property situated in another state, the court shall, if possible, divide the community property and quasi-community property as provided for in that division of the Family Code in such a manner that it is not necessary to change the nature of the interests held in the real property situated in the other state. If it is not possible to divide the property that way, subdivision (b) provides that the court may do either of the following in order to effect the division: require the parties to execute conveyances or take other actions with respect to the real property situated in the other state as are necessary, or award to the party who would have been benefited by the conveyances or other actions the money value of the interest in the property that the party would have received if the conveyances had been executed or other actions taken. The page on equalizing payments in divorce mediation covers payments that balance a division.

Timing of value matters too. Under Family Code section 2552, the court values assets and liabilities as near as practicable to the time of trial, except that, upon 30 days' notice by the moving party to the other party, the court for good cause may value all or part of them at a date after separation and before trial. The site's guide to property division mediation covers that process more broadly.

Separate Property Contributions and Reimbursement

Family Code section 2640(b) provides that, in dividing the community estate, a spouse is reimbursed for contributions to the acquisition of property of the community property estate to the extent the spouse traces them to a separate property source, unless that spouse made a written waiver of the right to reimbursement or signed a writing that has the effect of a waiver. The reimbursement is paid without interest or adjustment for change in monetary values, and it may not exceed the net value of the property at the time of the division.

"Contributions to the acquisition of property" has a specific meaning under section 2640(a). It includes downpayments, payments for improvements, and payments that reduce the principal of a loan used to buy or improve the property. It does not include payments of interest on the loan or payments for maintenance, insurance or taxes.

This differs from the situation sometimes called Moore/Marsden, which is the reverse: community money paying down a loan on one spouse's separate-property home. The site's article on how a house is handled goes into more detail.

Retirement Accounts and Other Assets Held Out of State

Retirement savings earned during the marriage are generally community property, or quasi-community property if earned while you and your spouse lived in another state. Family Code sections 760 and 125 both reach property "wherever situated", and section 2610(a) directs the court, except as provided in subdivision (b), to make whatever orders are necessary or appropriate to ensure that each party receives the party's full community property share in any retirement plan, whether public or private.

Family Code section 2610(a) directs the court, except as subdivision (b) provides, to make whatever orders are necessary or appropriate so that each spouse receives their full community property share of any retirement plan, public or private, including survivor and death benefits. Subdivision (b) sets the limits: a court may not order a plan to pay in a way that increases the benefits the plan provides, or, generally, to pay a spouse before the member retires unless the plan allows it.

Dividing a private employer plan covered by the federal retirement law ERISA generally calls for a qualified domestic relations order, or QDRO. Under 29 U.S.C. § 1056(d)(1), each pension plan must provide that benefits may not be assigned or alienated, and under § 1056(d)(3)(A) that rule does not apply to a domestic relations order that is determined to be a QDRO. A QDRO is a domestic relations order that creates or recognizes an alternate payee's right to receive all or a portion of the benefits payable under the plan and meets the other requirements of § 1056(d)(3) (subparagraph (B)), and the plan administrator determines whether an order it receives qualifies (subparagraph (G)). The site's guide to retirement accounts in mediation explains these orders further.

A business based in another state is characterized under the same sections, which reach property "wherever situated" (Family Code sections 760 and 125). Its value can include goodwill, and its value is decided on the evidence, often with experts.

Financial Disclosure Still Applies to Out-of-State Property

Family Code section 2104(f) sets the first disclosure deadline. The petitioner serves a preliminary declaration of disclosure with the petition or within 60 days of filing it, and the respondent serves one with the response or within 60 days of filing it. When the petitioner served the summons and petition by publication or posting under a court order and the respondent files a response before a default judgment is entered, the petitioner has 30 days from that response. The parties may extend these times by written agreement, or the court may extend them by order.

The preliminary declaration lists all assets in which the declarant has or may have an interest and all liabilities for which the declarant is or may be liable, whatever their character. A vacation home or a retirement account in another state is an asset in which the declarant has an interest, so it belongs on it.

Family Code section 2105(a) sets the second deadline. Except by court order for good cause, each spouse serves a final declaration of disclosure and a current income and expense declaration before or at the time the spouses enter into an agreement resolving property or support issues other than temporary support, or, if the case goes to trial, no later than 45 days before the first assigned trial date, unless the spouses mutually waive the final declaration.

A waiver has to be mutual. Under section 2105(d), it is executed under penalty of perjury, in open court or by separate stipulation, and it must include all of these representations: both spouses complied with section 2104 and exchanged preliminary declarations; both completed and exchanged a current income and expense declaration; both fully complied with section 2102 and fully augmented their preliminary declarations, including characterization, valuation and obligations; the waiver is knowing, intelligent and voluntary; and each spouse understands the waiver does not limit disclosure obligations, and that noncompliance will result in the court setting aside the judgment.

Mediating does not change any of this. Disclosure is how you and your spouse each get a complete, honest picture of everything, wherever it is, before agreeing on how to divide it.

How Mediation Addresses Out-of-State Property

Evidence Code section 1115 defines mediation as a process in which a neutral person helps the disputants communicate so they can reach a mutually acceptable agreement. The mediator does not represent or advocate for either of you and does not decide anything for you. Either spouse may have a lawyer of their own.

In mediation, you and your spouse can talk through whether one of you keeps the property, whether it is sold and the proceeds divided, or whether it is transferred to one of you, and how the other spouse receives assets or money of similar value. Mediation may or may not suit your situation, depending on the two of you and the issues.

If you and your spouse reach agreement, the court enters the judgment (Family Code section 2338(c)). In San Diego County, family law cases are heard by the Superior Court of California, County of San Diego, though where a case is filed depends on the spouses' circumstances, such as where they live.

Mediation is confidential under Evidence Code section 1119, except as the Evidence Code's mediation chapter otherwise provides, and a written settlement agreement signed by the spouses can be admitted or disclosed in the situations Evidence Code section 1123 lists, including when it says it is enforceable or binding. The site's article on mediation confidentiality explains those limits.

If there has been domestic violence, coercion or a protective order, safety comes first, and mediating with the other spouse may not be appropriate.

Schedule a Joint Mediation Consultation

A consultation is a place to raise questions about property in another state and how mediation handles it, whether you live in San Diego County or elsewhere in California and meet online.

To talk with Simple Divorce Mediation about divorce mediation, you and your spouse can call 858-330-1378 to schedule a joint mediation consultation.

About this article. Reviewed by Amy J. Lass, CA Bar No. 246779. Last updated 2026-10-08.