A community property state is one in which all marital property is divided equally between spouses in a divorce. Each spouse has an automatic half-interest in the property and debts acquired during the marriage, with the exception of anything received by way of an inheritance. Assets acquired before the date of marriage or after the date of separation are not considered included in this calculation.
Community Property States
There are nine community property states in the U.S.:
Property Division in Community Property States
Courts in community property states automatically divide all marital property equally between spouses in a divorce. In community property states, the division of property may be in the form of one spouse retaining title to certain marital assets, such as the house or a vacation home, and the other receiving a combination of some assets and a cash payment designed to make up any difference in value so that each person leaves the marriage with an equal amount in marital property.
Not All Property Is Marital Property
Not all property the couple owns is considered marital property. Anything that is not considered marital property is not divided equally in community property states. Marital property excludes:
- Anything acquired before the marriage or after the date of separation
- Cash received by one of the spouses as a gift or inheritance as long as it is deposited in a separate bank account in one spouse's name only
- Property received by one of the spouses as a gift or inheritance as long as the property is in one spouse's name only and not mixed with other marital assets
Note that debts are considered marital property, and are split evenly in a community property state.
States Without Community Property Laws
The rest of the states not on this list do not have community property laws. In these states, the property acquired during the marriage is divided equitably (equitable division) between the spouses. This doesn't necessarily mean that each person will receive an equal share. In some states, a judge may order a spouse to transfer separate property to his or her spouse to make the divorce settlement fair for both of them.
Dividing Your Community Property Assets
If you live in a community property state and are curious about how your assets will be distributed in your divorce, consider seeking legal advice. An attorney will review your assets and debts, and discuss what type and amount of property you could be awarded.