Divorce and Division of Assets in Community Property States

Divorce is always a last option when you are having marital problems.  Besides the obvious issues including the loss of income and the new need for separate housing, separate cars, and the like, there is always the question of division of assets.  You may wonder whether your state is a community property state, where assets are divided 50/50, or whether it is a non-community property state, where assets are divided according to who they belonged to before the marriage, or what value is assigned to them during the divorce.  Is Maryland a community property state?  These questions, and the answers to them, will impact how your property is handled during your divorce settlement.

Which States are Community Property States?

Currently, only a few states have community property laws, and Maryland is not one of them.  The states that have community property laws are:

• Arizona,
• California,
• Idaho,
• Louisiana,
• New Mexico,
• Nevada,
• Texas,
• Washington and
• Wisconsin. 

How are Assets Divided

These states begin distribution of assets exactly at 50/50 when a marriage ends and a divorce begins.  What do you need to know about how your assets will be divided if you live in one of these states and are receiving a divorce?  Well, you might be interested to learn that community property states divide everything based on the concept of “equitable distribution,” meaning that the court will decide how to fairly divide all property so that each party gets half.

Debts

Community property states also consider debts to be property which is to be equitably divided, so if either party has credit card debt, mortgage debt, or any other types of loans or financial obligations, these debts will be equally split, and the responsibility for repaying them shared, by both parties in the marriage.  Equitable distribution in community property states means that it does not matter who acquired the asset or debt, whose name it is in, or whose finances were used to purchase the item.  Everything must be divided equally.

Getting Help

In most cases, it is to your advantage if facing divorce in a community property state to make sure that your assets are properly protected.  Using a lawyer to help you decide how to protect these assets is key in a community property state.  If you are living in a community property state, you will also want to prepare any documentation necessary to show that certain debts may have been acquired without your knowledge or consent, so that you can avoid having these debts become your liability if possible.