Nine states are Community Property states:
- Arizona
- California
- Idaho
- Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
In contrast, other states follow an Equitable property distribution. Both terms are described below.
Community Property
Community property states consider all property as being in two categories: separate property or community property. Separate property doesn’t need to be split at the time of divorce but community property does.
In a community property state all income and assets acquired during the marriage is considered Community Property and is assumed to be equally owned by both parties regardless of how much money each spouse makes. Even if one spouse does not work at all, the property is assumed to be owned 50/50. Similarly, any liabilities incurred during the marriage such as loans, mortgages, and credit card balances are equally shared at the time of the divorce.
Separate property includes all assets owned by one party before the marriage, inherited by one spouse during the marriage, or purchased after the date of separation. Those assets remain with the party who owned them after the divorce. If there is a way to trace payments before the marriage to one spouse, that payment towards an asset can be considered separate property. Separate debt works the same way: it is debt taken on by one spouse before the marriage. That debt is wholly owned by that person.
Equitable Property Distribution
The more common Equitable Property Distribution rule allows for consideration of which spouse earned the property. Each spouse can receive between one and two thirds of the property. The method the judge uses for determining the split is subjective. Considerations such as the following are made.
- If one spouse stayed at home to raise children, that is given a value and considered when the property split is determined.
- Each spouse’s income level is considered.
- Length of the marriage is a factor.
- Abuse and infidelity is considered.
- Any actions to waste or destroy property is considered.
- Whether the property is needed to maintain a household for the children is taken into account.
- The health of the spouses is considered.
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I recently read a story: http://www.bankapedia.com/mortgage-encyclopedia/residential-mortgage-terms/309-quitclaim-deed
that claimed a woman was swindled out of her house by a husband planning on divorcing her. He apparently was seeing another women, convinced his wife to quitclaim herself off the property when they were refinancing. Then dumped her, kicked his wife out of the house, moved in with his gf, and she was out of luck.
Does the wife have any recourse in this situation?
It depends on how the property was acquired and which state you live in. Generally, in a community property state, if the property was acquired during the marriage and they are not separated, then it would be considered community property and included in the assets that would be negotiated during the property settlement. If the property was acquired by the husband prior to the marriage, then it could be considered separate property and would potentially not be included in the assets that would be split. I would recommend that you seek legal counsel in the state that you reside in to determine the proper treatment for this type of situation.
Hi! I like your srticle and I would like very much to read some more information on this issue. Will you post some more?
My ex has our 4-wheeler. It has both of our names on the loan. He was awarded it in the divorce. If he isn’t paying on it do I have a right to go pick it up from him? It is starting to ruin my credit so I am wondering what my options are.
If he was awarded the vehicle in the divorce then you cannot take possession of it. How is the loan handled in your divorce agreement? Are you liable for some of the payments, or is he supposed to have taken over the loan in full? If both of you are on the loan then yes, your credit is vulnerable to his poor actions. Your best bet would be to approach the lender to see what your options are. If you explain your situation honestly, they should work with you to find a solution. Good luck.
If I signed a contract agreement to use the house that we both own as collateral to purchase a business (auto insurance)am I entitle to a buy-out in a divorce? We are both stated as owners but she runs the business and I have my own job to provide us and the kids dental, life and health insurance. I dont know excactly what her monthly income is because she’s her own boss and its really based on commission. How do I find out what her average income is? Money has never been a issue in our marriage until now because of seperation that leading to divorce. She has filed for seperation now that I moved out of the house and coming after me for child support for our 1 child.
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