Although distribution of property laws may vary across the 10 states using “community property” laws, they generally presume all property owned by either spouse at the time of the divorce to be community property subject to distribution at the court’s discretion. If a party to a divorce maintains some piece of property should be withheld from the court’s consideration because it belongs to him/her alone and not to the couple as a whole, he/she must prove that to the court.
Courts in community property states (Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) consider most property to be owned jointly by the husband and wife, half and half. Thus, in theory, all property owned by either or both of the spouses should be divided half and half—California, for one, usually requires equal distribution. In practice, however, most states using community property laws take into account many factors in deciding exactly how to draw that line down the middle (for example, in a fault-based divorce, the party at fault may find him/herself drawing the short straw).
Therefore, it may be important for those divorcing in a community property state to be able to distinguish property they own separately from their spouse. That can only be done by keeping careful records of any separate property. That means documenting when and how ownership was acquired, what funds (if any) were used for the purchase and how those funds were acquired, any replacements of the property, etc. If those elements can’t be proven, the court may designate the property community property.
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