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Dividing Community Property



About 20 percent of U.S. states have community property laws governing property owned by married people. Dividing community property is a big part of the divorce settlement in these states.

The states that currently have some form of community property law are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In some states, such as California, the law requires that all community property be split 50/50 between divorcing spouses.

In other states, the law requires courts to split the community property "equitably" - which means fairly, but not necessarily exactly equally. Factors the court will consider include the length of the marriage, the work history and job prospects of each spouse, the physical and mental health condition of each spouse, the source of each asset and the childrens expenses, if any.

Dividing Community Property

In some states that have community property laws, all property that is acquired during the marriage is presumed to be community property. If one spouse believes that a particular piece of property is his or her separate property, he or she must prove to the court that the property was a gift to him or her personally, or was purchased with funds that he or she had before the marriage or money that he or she inherited during the marriage. Even then, if the separate property was "co-mingled" with the community property, it may be considered community property.

For example, if someone inherits money from a deceased relative and deposits it in a joint bank account, all or part of the inheritance may become community property.

It is extremely important to gather as much information as possible about your assets at the beginning of the divorce proceeding. If you believe that some property should be treated as your separate property, assume that you will have to prove to a judge why that asset is yours and not community property.

Once the court has made its decisions about division of property, be sure to get everything you need from your former spouse as soon as possible. For example, if you will be keeping a piece of real estate, make sure your spouse signs a deed giving his or her interest in that property to you. Or, if you will be keeping a car that is in both spouses names, make sure your former spouse signs the title transferring full ownership to you. The judges written order is not enough to transfer clear legal title. Making sure you have completed the transfers of all assets that have a deed or title will avoid problems later if you decide to sell or refinance the property.