California is one of the nine states that deems all property bought from a joint bank account during marriage, other than small personal items like clothing or jewelry, becomes community property. That rule was strengthened recently when singer Frankie Valli had a divorce settlement ruled in his favor that gave him half the ownership of a life insurance policy plan — one that he took out with his wife, Randy, designated as the sole owner and beneficiary.
In a unanimous ruling, the court said a $3.75 million life insurance policy purchased by Frankie in 2003, a year before he Randy separated, were owned by both parties, despite the fact that he basically gave all rights to her with the designation.
He had bought the life insurance policy in his wife's name after being hospitalized with heart problems, but claimed during divorce proceedings that he still owned half its value, then $365,000. Because the policy was bought with funds from a joint bank account owned by the Valli's it was split down the middle — the judge allocating ownership of the policy to Frankie Valli in exchange for a $182,500 payment to his wife for her half share.
An appellate court disagreed but was overruled by the state's high court, which said only a written declaration that the husband was yielding his share of the policy could defeat the presumption of equal ownership.
Frankie Valli wins divorce case in California Supreme Court (SFGate)