Going through a divorce is a tricky and confusing process, under the best of circumstances. However, if you live in a community property state, it can make this already difficult time even more stressful. Only a handful of states possess community property laws, which determine how any assets and debts are split between the two spouses after the divorce. If you are going through a divorce and don't understand community property laws, here are a few frequently asked questions you might have:
What Exactly Are Community Property Laws?
Depending on where you live, you and your spouse will either split your assets and debts based upon two different types of laws: common law and community property law. Common law rules are very straightforward: whomever is the legal owner of property or money will retain this asset after the divorce, even if it was acquired during the marriage.
For example, if one spouse's name is on the deed to a car, they will retain ownership of that car after the divorce. In terms of shared property or debt, such as a house, the judge will divide these assets equally between both spouses.
However, community property laws are a lot more complex. Basically, any asset or debt that is acquired during the marriage are the property of both spouses. This includes any money earned by either spouse during the marriage. Even if only one spouse's name is on a deed to a car or a house, if it was acquired during the marriage, it is legally the property of both spouses.
The only exceptions in community property states are property that was purchased and maintained separately by one spouse during the marriage or gifts and inheritances that were given specifically to one spouse during the marriage.
Which States Have Community Property Divorce Laws?
According to Legal Zoom, there are only nine states that have community property laws on the books: Wisconsin, Washington, Texas, New Mexico, Nevada, Louisiana, Idaho, California and Arizona. Additionally, if a couple legally resides in Tennessee or Alaska, they can sign paperwork that allows them to follow community property laws, instead of common laws.
What Is Considered Community Property?
If you reside in one of the nine community property states, you might be wondering what exactly is considered community property. Typically, the court will consider property either community or separate, even in a community property states.
Examples of common community property include:
- Money earned by either spouse during the marriage
- Any furniture, electronics or other household goods acquired during the marriage
- Jewelry, clothing or any other personal possessions that were acquired during the marriage. Even if the item belongs to one spouse, it is still considered community property during the divorce.
- Any larger purchases made during the marriage, such as cars, motorhomes or boats.
In community property states, there are still assets that are considered separate. Once again, this includes any inheritance that was given specifically to one spouse, gifts given specifically to one spouse or money awarded from a personal injury lawsuit. Additionally, if one spouse is the sole owner of a bank account, it will also be considered separate property.
Additionally, there is a third type of property: quasi-community property. This is property that was purchased in a common law state. For example, if you were married in a common law state and purchased a car, and then moved to a community property state, that vehicle is subject to the laws of the community property state.
Finally, don't forget that in a community property state, each spouse will also be responsible for any debts that are incurred during the marriage. This includes credit card debt or your home's mortgage.
Community property laws can be confusing and stressful. If you have any questions about community property laws, don't hesitate to contact a divorce attorney, such as those at Legal Action Workshop.