Property Division How Does it Work in a Community Property State

Property Division: How Does it Work in a Community Property State

State divorce laws govern divorce settlements. Generally, state laws allow either community property or equitable distribution schemes when dividing a couple’s assets. However, only nine states use community property law: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. If you live in a community property state, it’s important to understand how property division will work if you or your spouse files for divorce.

Separate vs. Community Property

The basic rule of thumb is that a couple’s community property and debts are split 50-50 during a divorce. However, not all of a married couple’s assets are divided. Property can be either separate or community.

  • Most assets and debts accumulated by either spouse during the marriage are considered community property.
  • However, assets and debts brought into the marriage by one person usually remain the separate property of that person.

Separate property usually does not enter into the divorce property division equation.

Although this sounds simple, determining whether something is separate or community property can be complicated.  Separate assets brought into the marriage may be used in a way that make them community property. An inheritance received during a marriage is separate property but mixing the inherited property with community property could change it for the purposes of property division.

Marital Settlement Agreement or Court Decision?

During the property division phase of a divorce, the couple can negotiate how property is split. Their agreement does not have to be 50-50, but the division should be fairly equal. Otherwise, a judge may not sign off on the couples’ marital settlement agreement.

When calculating property division, a couple will:

  • review financial disclosures, including the Schedule of Assets and Debts;
  • make sure both parties agree on community property and debts;
  • compare property valuations and debt to make sure they agree;
  • propose a roughly equal net share of property and debts for each spouse.

Special consideration may be given to retirement plans, debts with complicated terms or high interest rates,

If a couple cannot agree on the split, a judge may make the tough decisions for them. Also, remember that property remains separate or community until the judge signs your final divorce order.

Make Sure Your Property Division Goes Smoothly

Talk to an experienced California divorce attorney today. Please call us at (415) 293-8314 to schedule a confidential appointment with one of our attorneys.

Please call us at 415-293-8314 to discuss your case. The attorneys at the Law Offices of Judy L. Burger assist clients with divorce matters in San Francisco, Beverly Hills, Marin County, Santa Barbara, Ventura/Oxnard, San Jose, San Diego, Gold River (Sacramento), and surrounding communities.
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