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Are You Divorcing In A Community Property State? What To Know

Only a few states still divide marital property according to community property rules. In a nutshell, it means that everything a couple owns is considered to be owned jointly. To learn more about how things get divided in these states, read on.

Is It Fair? 

Unlike the other way of dividing property, equitable distribution, community property rules don't even try to achieve any sort of fairness. That is because property and debts are owned by both parties jointly regardless of who you might think should be the owner. For example, if your spouse charged thousands of dollars worth of items on their credit card, both of you are equally responsible for that debt in a community property state. That goes for debts you had no idea about, did not have your name attached to, or that you never benefited from. All debt and all property that falls into the marital category are divided up equally with very few exceptions.

What Is Marital Property and Debt?

Only certain areas, however, fall into that marital property and debt bucket. Anything that doesn't fit into the below categories is considered marital property:

  • Debts and property held by either party prior to the date of the marriage. For instance, if your spouse owned a car on the day you married, that car remains their property and is not considered marital property. It is, therefore, exempt from community property rules.
  • Property gifted to only one party. As long as the gift was given expressly to only one party, it belongs only to them. If spouses give gifts to each other, however, it depends on what the property is and the exact circumstances.
  • Property acquired after someone's death as part of an inheritance.

Community Property States

Very few states use community property laws, and some allow couples the option to choose between community property and equitable distribution in some cases. If you live in a community property state, not only is nearly everything you own also owned by your spouse, but you are not free to do anything with that property without the permission of the other spouse. That means if you want to sell your home, you need permission from the other party to do so even if only your name is on the deed. That rule applies during the marriage, during separation, and at any time prior to the divorce.

If you live in a community property state, it's vital that you get help with your divorce settlement agreement to avoid being taken advantage of. Speak to a divorce attorney to find out more.