When a couple divorces, their legal partnership terminates. If the couple holds property that was shared during their marriage, it must be divided upon divorce.
Property that is owned before marriage remains the property of the original owner; however, how property that is acquired during marriage is divided upon divorce depends on whether the couple resides in a community property state or non-community property state.
What is Community Property?
Community property includes all earnings by either spouse during marriage as well as everything that is bought using earnings or wages by either spouse during marriage.
Currently, there are only nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Alaska is an opt-in community property state which gives both parties the option to make their property community property.
Read More About:
- Exceptions to the Community Property Presumption Upon Divorce
- Changing Separate Property Into Community Property
What is Not Community Property?
The laws recognize that any separate property of one spouse cannot be considered community property. Separate property includes any property owned in one spouse’s name before marriage.
Separate property also includes gifts and inheritances given just to that spouse, personal injury awards received by that spouse, and proceeds of a pension that has vested before marriage.
How is Property Divided During Divorce in Community Property States?
During divorce, a couple generally divides community property equally between the spouses. Notwithstanding, each spouse is permitted to keep his or her separate property.
What if Property Was Purchased with Community and Separate Property?
There are times that a couple purchases property with a combination of community and separate property. For instance, a person who uses primarily his inheritance before marriage plus his and his wife’s earnings during marriage to purchase a home uses both community and separate property.
Generally speaking, this property typically becomes community property, and is therefore divided equally between both spouses.
What if My State is Not a Community Property State?
If you do not live in a community property state, your state recognizes equitable distribution of property upon divorce. In these states, assets and earnings accumulated during marriage are divided equitably (fairly).
It is less important that the property be divided equally so long as the judge determines that the split is fair. In that regard, a judge may order one party to use separate party to make the property distribution fair to both parties.
Should I Seek Legal Counsel?
If you have a question about how your property will be divided upon divorce, contact a skilled divorce attorney. An attorney can help you determine how property will be split and can fight for your rights in case your divorce is contentious.