Property Division

One of the most contentious areas surrounding divorce can be property division, or how the divorcing couple divides both its assets and collective debt.

State law governs the type of property division that takes place in the event of divorce. The two main types of property division are known as community (or marital) property and equitable distribution.

Community Property

States that abide by community property standards have slightly different rules from one another, but generally the idea is that any property and sometimes income acquired during the marriage becomes “community property” to be divided upon divorce.

This means that neither spouse has an automatic claim over any particular piece of property — even if title is held in only one name. Notably, even a pension fund, obviously in only one person’s name, is often considered community property (although any parts earned while the couple was not married may be considered nonmarital property).

In community property states, the court determines how property will be divided, but generally the split comes out as close to 50/50 as possible.

Currently the following nine states abide by community property division rules:

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

Puerto Rico also applies community property regulations, and the state of Alaska allows parties to designate certain property as community property.

Equitable Distribution

States that use equitable distribution also ask courts to divide property, but in those jurisdictions, the guiding principle is fairness and courts have broad discretion to split property as it sees fit and equitable. This means the distribution could end up being any ratio, including 30/70, 60/40, 50/50, or even 0/100, although that is extremely rare.

(Note that even some community property states give judges some discretion to veer from the 50/50 principle.)

In determining how property will be distributed, courts weigh various factors; they can choose to give more or less weight to any of the factors as they deem appropriate.