Community property concerns can emerge in divorce cases and following the passing away of a spouse. When spouses get divorced or pass away, the other spouse is usually left with the disheartening task of dividing property and capital that were obtained throughout the marriage. This comprises of items of value like vehicles, paintings, furniture, jewelry, and family houses, but might also include immaterial assets (like stocks and/or bonds, and land titles), and also debt. In some states, property obtained throughout the marriage is deemed part of the “community” and is often split fifty/ fifty in divorce cases. How your state treats “community property,” also referred to as “marital property,” is going to determine what happens to debt or assets after divorce.
Community Property Laws
Community property is regulated by state law, and not every state has such laws on the books. 9 states (including Puerto Rico) have community property laws that establish the way debt and property are split in a divorce. These states comprise of Arizona, Idaho, California, Louisiana, Nevada, Texas, New Mexico, Washington, and Wisconsin. Such states typically split property equally, while all other states adhere to equitable distribution, meaning a judge is going to decide what is equitable, or fair. Alaska is special in that it enables divorcing couples to decide. Whereas each state determines how property gets divided following a divorce, the laws may vary somewhat on how it’s split. For instance, a few states, such as California, split debt and property “equally” (fifty/ fifty), whereas other states, such as Texas, are going to split debts and assets “equitably.” Courts in states that implement the equitable distribution creed consider many different factors, many of which justify uneven allocation of property and/or debt, even in community property ones. Since these laws impact property and other invaluable assets, they can have a major impact on a spouse’s future if they are made to share a portion of an asset in which was considered to be separate property. Without a prenup between the spouses, the state law in which the couple was married in is going to dictate how property is going to be allocated.
Community Property vs. Separate Property
Usually, property obtained throughout a marriage belongs to each of the spouses. This is especially true in community property law states. While not every state has these laws, property obtained throughout the duration of a marriage is allocated equally upon divorce
Instances of community property might include:
- Income earned by either spouse throughout the marriage
- Home and furniture bought throughout the marriage with marital earnings
- Interest income earned by business ventures and operations
- Mortgages and the family house
Separate property, nevertheless, is that in which was owned before the marriage; inherited or gifted throughout the marriage; and anything either of the spouses earned following the separation date.
Instances of separate property might include:
- Financial institution accounts in which are retained separately
- Inheritances obtained throughout a marriage, if retained separately
- Gifts to either of the spouses
- Personal injury income
- Any property obtained after divorce
Courts have also determined some property as “partial” or “quasi” community property. This comprises of property assets that would’ve been determined as separate property at the start or throughout the marriage, but that has become marital property since of co-mingling and other circumstances inside of the marriage.
Aspects a Judge Might Use to Determine Division of Property
There are several aspects a judge may use to determine how to divide property obtained throughout the marriage. The 3 main aspects a judge is going to factor include 1) the earning capability of each of the spouses, 2) which parent is the legal caregiver of the child(ren) (if any), and 3) if fault grounds such as infidelity or abuse exist. As a result, even in states that are community property ones, property might not always be divided fifty/ fifty. Rather, courts are going to look at the following aspects to determine situations in which a disproportional division of property is necessary:
- Marital Fault: One spouse might receive more marital property when grounds for divorce were discovered (like infidelity, abuse, etc.).
- Loss of Continual Benefit: If one spouse is going to endure the loss of restitution that they would have received by continuance of the marriage.
- Difference of Earning Capability: If gaps are present between incomes, earning capacities, and business possibilities that may impact the division of property.
- Physical Health State: If the physical health or state of the spouses may impact the division of property.
- Difference in Age: Whether there is difference in the age of the spouses which may impact one’s capability to work or collect retirement benefits.
- Estate Size: The estate size can impact the division of property. Usually, the bigger the estate, the more the court may reward a fifty/ fifty division.
- Expected Inheritances: When one of the spouses expects to receive a large inheritance.
- Spousal Gifts: Gifts are typically turned into separate property following divorce.
- Custody of the Child(ren): A spouse that gets primary custody of children under eighteen may affect the property division.
Find Out More Concerning Community Property from a Divorce Attorney
The number of legal matters surrounding divorces can be overpowering. Property matters, spousal maintenance, child support/ custody, splitting of retirement benefits gathered throughout the marriage, visitational rights, and other legal issues all must be dealt with carefully. Finding the appropriate divorce attorney is essential. Contact a knowledgeable, local divorce attorney in your area today.
Community property overview. Findlaw. (2018, November 14). Retrieved July 26, 2022, from https://www.findlaw.com/family/divorce/community-property-overview.html
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