Frequently Asked Questions (“FAQ”)
on Community Property in Divorce
Patrick McGraw Provides Answers on Community Property in Divorce
Q: What is Community Property?
A: There are nine states that generally regard assets as community property. Community property is all property acquired during the marriage, excluding gifts and inheritances. These nine community property states include, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Also, Puerto Rico is a community property jurisdiction.
Even if one spouse earns all the money to get the property, all the property acquired, money earned, and debts incurred during the marriage is community property or assets in common. While there are many differences in each state, all states have special laws that operate on the theory that both spouses contribute to the marriage; thus all property acquired during the marriage is the result of the combined efforts of both spouses. In community property jurisdictions, both spouses own all community property.
Q: What is the Major Difference Between Marital or Community Property and Separate Property?
A: Upon divorce, separate property goes completely to the spouse who owns it. On the other hand, in the event of a divorce, the spouses will divide marital or community property.
Q: I Live in a Community Property State and Divorced My Spouse Soon After He Filed Bankruptcy. Am I Protected From the Creditors?
A: The community property bond between spouses can linger for years after the divorce. You are still responsible after divorce for your spouse’s debts that you incurred with them during the marriage. If your ex-spouse remarries, and that new spouse files a petition for bankruptcy, a creditor can reach non-exempt “community property” to collect on what was a community debt. This could shift the debt to you, to the benefit of your ex-spouse at your expense. When a couple incurs a debt during a marriage, the law considers this “community property.” This consideration of assets can affect either spouse in the divorce settlement. The assets settle the community debt along with the divorce settlement. So, the creditors will more than likely go after you for payment.
Q: Is a Settlement from an Accident Incurred While Married to My Husband Considered Community Property in the Event of a Divorce?
A: You are not entitled to any part of the money that your spouse may get for their pain and suffering. That money is your spouse’s alone because it is payment for personal injuries that your spouse suffered. But, any damages received as reimbursement for any damaged vehicles and lost wages are subject to community property laws in the event of divorce. This is because those damages are items that you benefitted from.