Whether you live in a community or separate property state is important even if you and your spouse never get divorced, since a state’s property status also dictates how much property you and your spouse can leave in your will and to whom. In the case of a divorce or a death, property will be split up into a few classifications.
Separate property belongs to just one of the spouses. Examples of separate property include property that was owned by just one of the spouses before the marriage. If property or assets are acquired in one spouse’s name during the marriage as a gift, then those will typically be considered separate property, despite the marriage. Additionally, if one spouse uses separate property assets in order to obtain other assets and it seems clear that he or she intends to keep these assets separate, then they will generally remain separate property. If you receive money from a personal injury case, typically the amount allocated to pain and suffering will be considered separate property while the amount allocated to lost income will be marital property. The laws on the specifics of what is considered separate property varies slightly depending on the state.
Unlike separate property, marital property belongs to both spouses and is typically anything that is earned or received during the marriage. Inheritance is one exception to this, but it can become marital property in some instances such as if it is placed in a joint checking account. Spouses can choose to make other exceptions, though, usually via a pre- or post-nuptial agreement.
Not only do the above definitions vary significantly from state to state, each state has one of two property ownership systems: separate or community.
Separate Property States
These states are sometimes referred to as common law states, and ownership of property is determined by whose name is on the deed, who paid for it or to whom it was given. If both you and your spouse are listed on the deed, it is assumed that you each own 50% unless there is documentation showing otherwise.
Community Property States
In community property states, both spouses are entitled to property acquired while they are married no matter whose name it is in, and each spouse is entitled to 50% of all income earned during the marriage regardless of who earns it. However, property acquired before the marriage and inheritance or gifts obtained at any time typically remain separate property. California is a community property state, as are Arizona, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In Alaska, couples have the option to decide if they would like their property to be community or separate property.
No matter how complicated your divorce, we can help. For help with your case or in any other aspect of family law , you can turn to the Law Office of Renkin & Associates for the help that you deserve. We are prepared to answer your questions and fight for your assets.