What’s Community property law?

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Community property law is a body of law governing the division of marital property in the event of divorce. Community property law is enforceable primarily in the United States and only in those states referred to as “community property” states. Nine states in the United States use the community property system to divide marital assets.
States in the United States that use community property law to determine the division of marital property are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Other states use various other forms of law to regulate the distribution of property. In some states, such as Alaska, parties may join a community ownership system, but it is not the default rule for property distribution.

In a state that uses community law, all property acquired during the marriage is automatically treated as community property. This means that all assets that one spouse acquires during the marriage belong to both spouses equally. When spouses divorce, the property is then divided in half, in a 50-50 split under the terms of this property law. This is true regardless of how much each spouse has individually invested in acquiring the property in question. For example, if one spouse worked and bought a home but the other spouse did not have a job during the marriage, the home is still considered community property.

Assets acquired on or after the first day of marriage are all classified as commons. Assets that a spouse owned before the marriage are not necessarily considered joint property in any case. However, if the spouses have pooled the assets they owned before the marriage, those assets automatically become joint property.

For example, if one spouse had a bank account before marriage but used it as a down payment on a home that both spouses owned together, the home is joint property. Likewise, if spouses mix money in a joint bank account, it becomes community property. This voluntary mingling of assets turns any property into community property.

An asset may become community property even if only one spouse contributes money to it, if the other spouse contributes capital or otherwise increases the value of the asset. For example, if one spouse owned a home before marriage and the other spouse contributed to it through home improvement projects, that home can become community property under the community property law. This is true even if the other spouse has no money invested in the house.

Under this property law, some assets acquired after marriage can remain separate unless mixed. This list, however, is very limited. For example, if a spouse inherits money from their parents or receives personal injury compensation, that property does not automatically become community property unless they mix the funds with other community assets.

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