Division of Community Property

April 18, 2016

[Ed: Originally published on Facebook.]

This week we’re going to take a closer look at property division laws. There are basically two types of property division schemes – “community property” (“CP”) and “equitable distribution”. Knowing these rules is important because you need to be able to make reasonable assumptions about what the judge can or might do if your case goes to trial. You can almost always get around any set of rules via a negotiated settlement agreement, but for maximum leverage at the negotiating table, you should be familiar with the rules that will apply to your case. Your lawyer can walk you through the particulars.

CP is the rule in only a handful of states (although, that handful does include Texas and California) and is pretty simply stated – basically, property of a married person is either “separate” (typically, this means it was either owned prior to the marriage or else was a gift specifically to that person during the marriage, usually by inheritance) or “community”. CP is generally divided equally. While this “bright line” rule has the advantage of simplicity, it can lead to results that might appear unfair, and the courts in these jurisdictions generally have limited (if any) ability to “correct” such unfairness by awarding one party a larger share of the CP. Still, it can save the parties a lot of time and expense if they recognize early on that the result in their case is highly predictable.

No matter how your property is divided, you will want to spend some time planning for how you’re going to manage it all on your own. This is where the “Your Post-Divorce Compass” plan can really help you.