When it comes to family law, it would be a minor understatement to say that divorce constitutes a big part of the pie. In many states, there is a concept known as community property that is used to ascertain how the assets of the marriage will be divided. In this article, we take a closer look at this concept.
Community property is an interesting concept. It works on the basic assumption that the property of the married couple is joint owned. This simply means that the property is half his and half hers regardless of how it was paid for and so on. Property that was owned by one of the spouses prior to the marriage is considered separate property of that person unless it was transformed into community property. How exactly this can happen is dependent upon the state you are in.
Community property is often referred to as the no fault divorce theory. Consider a state like California. In the state, a married couple is assumed to jointly own all the assets they have. When a divorce takes place, those assets are given values and divided evenly. Depending on how nasty the divorce is, this can result in the sale of most items to generate cash.
So, why is called a no fault divorce. Well, assume I am married to my wife. She then finds out I have a mistress and have had one for the last five years. She is not going to be to happy to say the least. In fact, there is a pretty good chance that she will decide to divorce me. If she files, I will still be entitled to half the assets even though I am at fault for the marriage failing.
The community property concept has been in the news a lot lately thanks to a gentleman named Tiger Woods. To say he was caught cheating on his wife would be a minor understatement. She has certainly contemplated divorce, but is rumored to have signed a prenuptial agreement. During all the hubbub, it was suggested that she had hired a California divorce lawyer and would try to file in California instead of Florida. The question is why? The answer is she would have a better shot at defeating the prenuptial agreement in California. If successful, she would then be entitled to roughly half of Tiger’s assets which would be many hundreds of millions of dollars.
Nine out of the 50 states of the union use the community property standard. They are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Married couples living outside of these states do not have 50/50 property splits in general. Instead, they use a concept called equitable distribution which is a whole other subject.
