Distinguishing Between Community and Separate Property

Divorce, while serving as an official way to end what was once a romantic relationship, is also a financial transaction. Splitting couples must find a way to divide their assets and debts, lest they want a judge to have a final say so on the matter. This may sound simple enough, but the issue can actually be quite complex, and for a number of reasons.

One reason is that there are often discrepancies about what constitutes community property and separate property. The distinction is important, as property that is deemed to be separately owned, or property that was not acquired as part of the marriage, cannot be subjected to property division during the divorce process.

Generally speaking, property owned prior to marriage is considered separate. Also, inheritances that are left to a single spouse are also considered separate property, as is property obtained through assets that are owned separately, even if acquired during marriage. Property acquired after legal separation is also considered separate property.

Community property, on the other hand, is anything that is acquired during the marriage and jointly owned. This includes income from each party. Since community property is considered owned by both parties, it is usually divided equally during divorce.

Complications arise when separate property is commingled with community property. For example, depositing an inheritance into a jointly-held bank account may render it community property, or at least make it much more difficult to determine where community property ends and separate property begins. This issue is quite common and can affect a whole host of asset types.

This is why you need to be careful when dealing with property division during divorce. If you don’t know the law and how to use it to your advantage, you may be taken advantage of by your soon-to-be ex-spouse. Therefore, before moving forward with this process, consider seeking guidance from a family law professional you can trust.