Community Property States
If you are getting married or considering a divorce, it’s important to understand the laws regarding community property. Community property states, also known as marital property states. Each have unique laws that govern how assets and debts are divided in the event of a divorce. This article will explain community property and how it differs from common law property. You’ll also learn what you need to know if you live in a community property state.
What is Community Property?
Community property is a legal concept that defines property acquired during a marriage as belonging equally to both spouses. Any property acquired during marriage is community property, irrespective of who earned it or whose name is on the title. Community property includes not only real estate and personal property, but also income, retirement accounts, and other assets. Community property does not include property acquired before the marriage or after separation.
How Does Community Property Differ from Common Law Property?
The spouse who earned or titled the property typically owns it during marriage in common law property states. If one spouse earns more and buys property, it’s their separate property, not community property. In common law states, property division in a divorce is based on a variety of factors, including each spouse’s income, contributions to the marriage, and needs.
Community property states, on the other hand, operate on the principle that all property acquired during the marriage is owned equally by both spouses. This means that in the event of a divorce, community property is divided equally between the spouses, regardless of who earned it or whose name is on the title. The only exception is if the spouses agree to a different division of assets or if there are extenuating circumstances that justify an unequal distribution.
Which States Are Community Property States?
There are nine community property states in the US: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In Alaska, spouses can choose to opt into a community property system by signing a community property agreement.
What You Need to Know if You Live in a Community Property State
If you live in a community property state, it’s important to understand that all property acquired during your marriage is considered community property, even if it’s only in one spouse’s name. This means that in the event of a divorce, all community property will be divided equally between you and your spouse. You may also be required to pay spousal support to your spouse, depending on the circumstances of your divorce.
It’s important to note that there are exceptions to the rule of equal division of community property. For example, if one spouse has significantly more debt than the other, the court may award a larger share of the community property to the spouse with less debt. Additionally, if one spouse has significantly more income than the other, the court may award a larger share of the community property to the spouse with less income to help balance the financial situation.
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