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Community Property Basics

In its essence, community property law recognizes the equal contribution of both parties to a marriage even though one or the other may earn more income.

Having been on both sides of this idea for more than a few decades, I do endorse its fairness.  This is especially so because the law does allow for a husband and wife to enter into a Pre-marital, or a Post marital, agreement that there will be no community property when conditions are such that this format is not fair.

The concept of community property came from France, Spain and Mexico.  It is officially recognized in California, Arizona, New Mexico, Texas, Nevada, Idaho, Washington and Louisiana.  Each of these areas was once under Spanish or Mexican control.

Whether a marriage ends by divorce or death – community property law ultimately is called upon to deal with the distribution of property acquired during the term of a marriage.  All property and all debts 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.

By agreement or by the actions of the parties a married couple can transmute (convert) separate property into community property. An example of an “action” would be the commingling of community and separate funds into one account which will transmute the once separate funds into community funds.  This holding will prevail irrespective of how title is held – which can be in either party’s name or jointly.

Separate property is property that one brings into the marriage in addition to anything that either spouse acquires by gift or inheritance during the marriage.

When a husband or wife dies only one-half of the marital property is inheritable since the surviving spouse already owns his or her half of the marital property.

As it is with community assets, all debts contracted from the beginning of the marriage until the date of separation are community debts. Therefore, each spouse is equally liable for Community debts.  In most cases, this includes unpaid balances on credit cards, home mortgages and car loan balances. It is best to close out all credit cards, bank accounts, and “joint” accounts as soon as possible after a divorce has been decided upon – It may not be enough to just remove a name from an account.

Of course there is a good volume of statutory and appellate law relating to these basics and if we can be of help in this area of the law do call on us.

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