Community Property

Author:Jeffrey Lehman, Shirelle Phelps

Page 48

The holdings and resources owned in common by a HUSBAND AND WIFE.

Community PROPERTY LAW concerns the distribution of property acquired by a couple during marriage in the event of the end of the marriage, whether by DIVORCE or death of one of the parties. In community property states all property accumulated by a husband and wife during their marriage becomes joint property even if it was originally acquired in the name of only one partner. The states that utilize a community property method of dividing resources were influenced by the CIVIL LAW system of France, Spain, and Mexico.

Laws vary among the states that recognize community property; however, the basic idea is that a husband and wife each acquire a one-half interest in what is labeled community property. A determining factor in the classification of a particular asset as community property is the time of acquisition. Community property is ordinarily defined as everything the couple owns that is acquired during the marriage with the exception of separate property owned by either of them individually. Separate property is that property that each individual brings into the marriage, in addition to anything that either spouse acquires by inheritance during the marriage.

Generally, four types of property acquired after marriage amount to community property: earnings, damages obtained from a personal injury suit, damages awarded in an industrial accident action, and rents and profits from separate property.

Divorce

In many community property law states, a husband and wife may enter into a PREMARITAL AGREEMENT that there will be no community property. Divorce terminates the community relationship in all community property states; however, the manner in which the property is divided differs.

Upon the dissolution of a marriage, the source of property becomes important in determining whether an asset is community or separate property. Ordinarily, separate property includes that which is acquired through gift...

To continue reading

FREE SIGN UP