Property Divisions by States

Question 1

Community Property

Answer 1

There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In these states, all property of a married person is classified as either community property (owned jointly by both spouses) or the separate property of one spouse. Marital property refers generally to all the property acquired by either or both spouses resulting from labor, skills, and effort during the marriage. Separate property refers to any property the spouses acquired separately before the marriage or after separation (or in some states after divorce). Separate property also includes any gifts or inheritances acquired by either spouse at any time. There are exceptions to these general rules, which are spelled out in each state’s property laws.

At divorce, community property is generally divided equally between the spouses, while each spouse keeps his or her separate property.

Couples in Alaska can opt into a community property system like the one described above. In South Dakota and Tennessee, spouses can opt into a modified community property approach by transferring specific assets or property into a valid community property trust.

Question 2

Equitable Distribution

Answer 2

In the remaining states, assets and earnings accumulated during marriage are divided equitably (fairly), but not necessarily equally. In some of those states, the judge may order one party to use separate property to make the settlement fair to both spouses.

Rather than treat each party as equal, equitable distribution holds that some factors make the ownership of property inherently unequal. Factors that make the parties unequal include educational attainment and employability, how much each party earns and spends, what the financial needs of each party are, and the age and health of each party. The theory also takes into account the causes of the divorce, including whether one party was abusive or unfaithful. Equitable distribution considers the financial position of each party post-divorce.