The Laws Governing Getting Divorced under Community Property Provisions

Getting divorced is complicated in any state, but it becomes even more so for those who live in one of the ten community property states: • Alaskarn• Arizonarn• Californiarn• Idahorn• Louisianarn• Nevadarn• New Mexicorn• Texasrn• Washingtonrn• WisconsinrnMost people assume that in community property states everything becomes part of the marital property when a couple marries, and while that is mostly true, there are exceptions, and that is where the confusion comes when the couple makes the decision to file for divorce. The provisions of community property and separate property though clearly defined can easily be circumvented during the course of the marriage and changed at the time of divorce.rnIn most community property states any property acquired during the marriage is jointly owned other than gifts and inheritances that are for the benefit of one spouse only. For instance, if your aunt dies and leave you her beach house, and her will clearly states she is giving it to you and not you and your spouse, it becomes separate property not subject to community property laws when the couple decides they are getting divorced.rnWhile it is simple enough to say all property acquired during marriage is community property, the tables can turn uncomfortably when a couple is getting divorced. Quite often these kinds of conflicts are the very reason it takes much longer for divorces to become final in community property states, especially when you consider quasi-community property which involves property that one spouse owns in a non-community state (i.e. the couple lives in Texas but one owns property in Oregon) that would be community property if it was located in a community property state. rnThe other huge problem with couples getting divorced in community property states is the provisions for separate property. Instead of just dividing the assets 50/50 like you would assume in those states, there may be instances where some of the property is not community property because it was acquired before the marriage and no marital assets were used for its maintenance. The spouse who lays claim to the property will need to prove the property should still be separate property because they did not use any marital assets for the maintenance of that property. rnEven if couples sign agreements to transfer separate property to community property or community property into separate property (transmutation), the court can overturn these agreements if it feels there was fraud involved in the inter-spousal transfer of property. For instance, a husband might transfer a piece of community property to his wife as separate property when they are planning on getting divorced in order to avoid creditors seizing the property. If the court becomes aware of the fraudulent reason for the transfer, it can decide to disallow the transfer and still include that property within the rest of the community property. You must be very careful when making decisions that involve transmutations of joint or separate property that were not acquired as a gift or inheritance.