One of the most commonly heard statements about divorce may be either "good thing you're in a community property state" or "too bad the divorce has to follow community property law." So, which is it? Is community property division a great thing or something to fear? The answer can be complex because it depends upon the specifics of the marital property. Read on to find out exactly how community property works - and why it can be both good and bad.
How Community Property Works
In the nine areas of the United States that follow community property laws in divorce, the marital assets and debts are divided in half. This 50/50 distribution applies to all marital assets and all marital debts as long as they were acquired during the course of the marriage. The areas that have community property law for divorce are:
The state of Alaska does not require community property division, but does have laws that allow for that type of division if both spouses are in agreement. The remainder of states in the U.S. have equitable property distribution laws that split the property in a fair (but not always equal) manner.
When It's Good
For some people, community property is a great thing. If one spouse happened to make an enormous amount of money while the other spouse stayed home with the kids, the stay-at-home spouse could be out of luck in an equitable property distribution state. However, in a community property state the spouse who stays at home is entitled to a full half of all money made during the marriage.
In fact, in any case where one spouse works and the other stays home, community property distribution insures that the money is equally shared. A spouse who was in school during the marriage, a spouse who stayed home to care for an elderly relative, or a spouse who stayed home for any reason during the marriage will find community property laws extremely beneficial.
When It's Bad
In cases where one spouse made a great deal of money during the marriage and the other spouse didn't contribute to that income in any way, community property laws may not seem very fair to the one who made all the money.
The spouse who made the money might think it's reasonable to give their partner a portion of the marital assets, but they may not feel that a 50/50 split is a fair distribution. However, in a community property state the fairness of the 50/50 split isn't considered - it's just the way that the court makes the property division.
Even if you live in one of the community property states listed above, keep in mind that these laws may not always apply. If you and your spouse can come to a legal agreement about who gets what prior to court, the court will typically respect this arrangement and will not force a 50/50 split where it's not wanted by either partner. If you live in a community property state but don't want to split things down the middle, talk to an experienced family lawyer about how you can negotiate a better deal.
Contact a law firm like Nelson, McPherson Summers & Santos LC for more information.