Community Property and Divorce
Community property is all income or property that was acquired during the marriage, with the exception of gifts or inheritances. Community property and its distribution in a divorce is at sharp variance from a common law property distribution.
In this routine, a husband and wife own their marital holdings in common, regardless of title, giving each spouse an undivided one-half interest in the whole asset. Each spouse has a claim to one-half the earnings of the other.
Some states allow for equitable distribution when justice is served.
Three community property states, only California, Louisiana and New Mexico always divide equally. Three other community property states -- Idaho, Nevada, and Wisconsin -- begin with the presumption that it should be equal, and then entertain arguments to the contrary from either spouse. Equal division does not mean that each asset is split in half; instead the court makes certain that the total of the assets is divided in half. Alaska permits couples to elect community property status for divorce purposes.
Legal counsel should be consulted because the rules on distribution vary from state to state and have many exceptions.
Resources & Tools
ASSETS AND LIABILITIES – A property settlement must deal with what a couple own and owe, both as individuals and as a couple.
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Divorce & Money: How to Make the Best Financial Decisions
What Happens to the Marital Home Upon Divorce
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"A Plain English Guide to Protecting Your Children"
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