Equitable Distribution States vs. Community Property States
- Property division in divorce
- Equitable distribution principles
- Community property division principles
- Primary differences
- How to resolve property disputes
Property division in divorce varies based on the state where you live. Community property states and equitable distribution states have slightly different rules for distribution. Here's what you need to know.
Property division in divorce
Dividing the marital estate is an important part of divorce proceedings when a couple chooses to dissolve their marriage. The need to divide property occurs because in most cases, married couples accumulate property and assets together, and splitting up requires a process to divide those belongings fairly.
The laws for dividing property in divorce vary from state to state, but there are two basic principles used in the U.S: community property and equitable distribution.
Equitable distribution principles
Equitable distribution is the most common method of property division practiced in the states. This approach considers the length of the marriage, what each spouse contributed to the marriage, and the ability of each to earn and support themselves post-divorce.
In this approach, the court aims to divide the property and marital assets fairly, though not necessarily equally, given every factor of the divorce case.
Community property division principles
Community property rules are practiced in a few states where marital property is considered to belong equally to both spouses. In such states, property, and assets obtained during the marriage are divided equally in a divorce regardless of each person’s individual contribution.
Community property vs. equitable distribution: Primary differences
The primary difference between community property division and equitable distribution is that in community property states, any property acquired during the marriage is considered joint property and is divided equally between spouses in the event of a divorce.
Equitable distribution states, on the other hand, aim to divide property fairly based on the unique circumstances of the divorce case.
Bob and Jane in a community property state
For example, in the community property state of California, if Bob and Jane were to divorce, all property and assets that they obtained during their marriage would be considered joint property and would be divided equally. So, if Bob and Jane owned a home, it would be split down the middle regardless of who paid for it, who made the down payment, and who contributed more income toward the mortgage payments.
Bob and Jane in an equitable distribution state
If Bob and Jane were to live in the equitable division state of Colorado, however, the court would first determine what assets Bob and Jane own and how much they are worth. The court would then evaluate the situation: how long the marriage lasted, each person’s income and property they brought into the marriage, and each person’s contributions to the marriage (such as raising kids, caring for the home or business). Based on this variety of factors, the court would divide the property and assets fairly. So, Bob might keep the home in Colorado, but he may also give Jane a larger share of the bank accounts to balance out the property division.
Which states use equitable distribution?
All states except those listed below as community property states follow the rules of equitable distribution. This is the vast majority of states.
Which states use community property division?
The following states follow community property division in divorce:
How to resolve property division disputes and dilemmas
There are several ways couples can resolve property division disputes and dilemmas without having to go through a lengthy court battle.
Equalization payments
One possible resolution is through equalization payments, where one spouse is allowed to retain certain assets, and the other receives a monetary payment to make up the difference. For example, if one spouse decides to keep the family home, the other spouse might be compensated with a cash payment equal to half the home's value.
Mediation
Another potential solution is mediation, where an impartial third-party mediator helps couples discuss their needs and concerns to find mutually agreed-upon solutions. An experienced mediator can help identify issues each partner may have missed or not even considered and help find compromises that both people can live with.
In some cases, a judge may also order an appraisal of the property, which can help to establish a factual basis for the property's value and prevent disputes about property value in the future.
Hello Divorce can help you resolve these issues through our mediation services. We can support you by finding the right mediator for your needs, helping you resolve your issues and finalize your divorce faster. We encourage you to review our property division spreadsheet.
Suggested: Property Division in Community and Non-Community Property States
