Community Property v. Equitable Distribution: How The Courts Will Handle Property In A Divorce
When a marriage dissolves, the property the couple owns will be stated into two categories:
1 – Community Property
2 – Equitable Distribution
A Look At Community Property States
Community property is property that the parties have acquired during the marriage (not including inheritances or gifts) and is owned equally by both of them, regardless of the contribution given to the marital estate. All other property is said to be separate property. When a couple files for a divorce, the community property is split evenly between the couple and each party will get to keep the separate property.
The following states are community property states:
- California
- Washington
- Arizona
- Nevada
- Idaho
- New Mexico
- Texas
- Wisconsin
- Louisiana
No two states will divide community property the same exact way. A few states such as California have a mandate that stipulates all property be divided 50/50 between the couple, regardless of the evidence that a spouse has more right to a piece of property over the other spouse. Courts will not take into consideration three things when dividing the community property:
- Ability to make money
- Financial need
- Fault
Instead, the community property theory relies on the idea that the couple evenly contributed to the marriage and the estate, regardless of income levels and affluence before the marriage.
A Look At Equitable Distribution Property States
The states that do not use the “community theory” notion for property distribution are known as “equitable distribution” states. When trying to figure out what constitutes as equitable distribution of marital assets, the court starts with the assumption that the property be equally divided. However, it then considers evidence where the distribution of property needs to be disproportionate. Four reasons property is not equally divided (50/50) are:
1 – One person contributed much more to the estate.
2 – One person earns a reimbursement for money that was expended during the marriage.
3 – One person has a much larger non-marital estate than the other person.
4 – One person earns more money than the other person.
Bear in mind that courts will look at cases closely where one person held off on getting a college education or career to take care of the children or support the spouse in another manner. Courts will often agree to disproportionate property distributions instead of spousal support. For instance, a father may decide to give over the marital residence to his ex-wife to not pay her alimony.
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