What Is Community Property?

During your divorce process, you may see or hear the term “community property.” At times, it may be used to describe marital property that you and your soon-to-be ex-spouse share. But more often, it’s used to describe a specific group of states and the laws that govern the division of marital property for divorcing people in those states.

What is marital property?

First, let’s look at the concept of marital property. This refers to property co-owned by two spouses. Any items or money obtained by a couple during marriage is marital property.

Of course, exceptions exist to this general rule. For example, if you inherit money from a relative during your marriage, that money is yours alone – it’s your separate property. However, if you deposit that money into a bank account shared by you and your spouse, or if you use it to make improvements to your marital home, it may no longer be considered your personal property. Instead, it may now be considered a marital asset.

What is a community property state?

One of the biggest issues any divorcing couple faces is how to divide their marital property between the two of them. When two people share one house, one car, or one dog, for example, it can be hard for them to decide who gets what – especially if they aren’t getting along.

For this reason, each state has a law governing property division. For example, California follows the principle of community property. If a divorcing couple in California cannot agree on who should get, say, the family home, the court will make that decision for them. The court’s decision will be guided by whether the state is a community property state or an equitable distribution state. In a California divorce, the principle of equal division would be employed.

Suggested reading: 7 Ways to Make Asset and Debt Division as Fair as Possible

Property is divided 50/50 in community property states

Property and debt division should be as equal as possible in a community property state. Each spouse is expected to walk away with approximately 50% of the marital property. 

Now, you may be wondering how a couple in one of these states would divide a marital home in half. Obviously, they cannot literally slice the building in two. Here’s what they might do instead:

  • They might sell the marital home and split the proceeds.
  • One spouse might “buy out” the other with 50% of the home’s cash value and take over the mortgage payments, keeping the home

You may also be wondering what divorcing spouses would do with a shared pet, like a dog. This is a tough one. Unfortunately, if a couple can’t decide what to do with the dog they share, a judge would step in to make that decision.

You can imagine how heartbreaking a scenario like this might be. This is just one reason why resolving your divorce settlement amicably is, in most cases, the best option. Hence, it’s a good idea to work with your spouse if you can. Sound difficult? Consider hiring a mediator to help the two of you strike a creative solution that allows you both some satisfaction.

Not all states are community property states

Community property states are in the minority in the U.S. Most states are actually equitable distribution states. A fair division of assets and marital debt is expected in equitable division states, too – but “fair” is not always a 50/50 split in equitable distribution states.

Read: Which States Are Community Property States?

Whether you live in a community property state or an equitable distribution state, you can get help making big decisions about the division of debt and property in your divorce. If you’d like to learn more about divorce mediation, read this article, and then click here for information about our mediation rates.

At Hello Divorce, our goal is to make divorce as inexpensive and pain-free as possible. To accomplish this, we’ve assembled a strong team of professionals who know how to help. We provide everything from affordable online divorce plans to hourly sessions of flat-rate legal advice.

To learn more about us, schedule a free 15-minute phone consultation with a friendly and knowledgeable account coordinator today.

Senior Editor
Communication, Relationships, Divorce Insights
Melissa Schmitz is Senior Editor at Hello Divorce, and her greatest delight is to help make others’ lives easier – especially when they’re in the middle of a stressful life transition like divorce. After 15 years as a full-time school music teacher, she traded in her piano for a laptop and has been happily writing and editing content for the last decade. She earned her Bachelor of Psychology degree from Alma College and her teaching certificate from Michigan State University. She still plays and sings for fun at farmer’s markets, retirement homes, and the occasional bar with her local Michigan band.