A community property state allows spouses to split their income, profits, and assets. The law determines how the property will be distributed based on what each spouse contributes to the common good of their marriage and family. The law requires that each spouse is entitled to their fair share of the marital property and that they receive the same amount of property, regardless of gender.
For example, if a husband buys a car with his own money, then he owns the car. However, if a wife buys the same car with money earned while working as a waitress in their restaurant business, then she owns half of the vehicle. In community property states, any earnings and property that is acquired by either spouse during the marriage are typically considered to be marital property. If the couple divorces, this marital property is supposed to be divided equally between them unless there are extenuating circumstances such as fraud or adultery.
What is Community Property?
The definition of community property is often confusing since different states have their own specific rules governing the division of marital property. To be considered community property, an asset must meet two essential requirements. First, the property must have been acquired during a marriage. Second, both spouses must have contributed financially to the purchase of that asset. However, the majority of states do not consider marital homes to be community property. This is because it is generally expected that a couple who purchases a house together will live in that home and maintain it for their family. In addition, each spouse has an automatic interest in the other spouse’s separate property as well as a share of the community property.
What is Equitable Distribution?
Equitable distribution states do not assign community property to either spouse. Instead, the law requires that the property be divided so that each party receives an equal share. However, circumstances can affect this equality. If one spouse worked to help support the family while the other spouse stayed at home and cared for their children, then the couple’s property may not need to be divided equally. This type of distribution is also commonly referred to as “nondiscrimination.” A couple decides to divorce, and one spouse requests that the property be divided based on their contribution to the marriage. If their contribution was greater, then they should receive more of their own property. On the other hand, if one partner did little to help or even hurt the marriage, then they should receive less. This type of distribution is also known as “equitable distribution.
What are Some Differences Between Community Property and Equitable Distribution?
Community property states use a method that favors equal distribution. The partners are not required to follow an equitable formula but instead may argue back and forth to arrive at a fair decision. Because the property is divided by the contributions to the marriage, if one spouse does not agree with the decision of their partner, it may be possible for them to appeal or fight for a different outcome. In contrast, in states that use an equitable formula to determine the distribution of community property, disputes are usually much easier to resolve since each partner must follow the order of their contributions to the marriage.
If a community property state grants a married couple legal ownership of marital property, then this ownership will be considered separate property. In community property states, if you own your house separately from your spouse and your divorce, then you may only receive half (or less) of the fair market value of your house by way of equitable distribution.
Can I Change the Type of Distribution Method Used in My State?
In some states, it is possible to change your current distribution method to either community property or equitable distribution. You must file an action with the court and provide sufficient evidence proving that your request for a change in your state’s property distribution is not frivolous. For example, if you believe that you deserve more of an asset because you sacrificed your needs in order to support the family, then you can request that the court grant you more of that particular asset. However, this is not the case if you simply want your personal preferences to determine how your assets are distributed.
When Do I Need an Attorney’s Help?
If you want to learn more about community property or equitable distribution, then an attorney can help. As with any type of legal matter, contacting a lawyer early on can help you understand the process better and ensure that everything goes smoothly during your divorce proceedings. An attorney will know what type of distribution is generally used in your state and can advise you on how to proceed.
Divorce is not always easy, and there is a lot that goes into the process. If you are unable to work with your spouse to settle your marital issues, then you should consider hiring an attorney to help guide you through the divorce process. An attorney can also advise you in regard to any questions that you may have about community property versus equitable distribution methods.