What is community property

What is community property?

Community property (US) or Community of Property (SA) is a legal word used to describe everything that the couple owns jointly together .  This means that whatever is owned by the couple has a right to be distributed or owned by both individuals.

What does community property include?

Community property means that all the assets purchased or acquired by a couple during their marriage are owned equally by both of them. Gifts and inheritances are an exception; if something is given to an individual alone then it should and is owned by the individual alone. For instance, if the wife is given a piece of property by her parents or siblings regardless of the fact that she is married at the time of receiving or not. The gifted property stays with the wife alone.

Earnings, income, and salaries also classify as community property, e.g. James would own half of Alice’s earnings and income and vice versa.

Debts are a part of community property.

Debts fall under the umbrella of community property too. If one of the spouse’s has incurred a loan or even has a credit card bill which is pending, the company can easily ask the other spouse to pay the bills without any negotiations or relaxation, even to an extent of jeopardising the wages.

Divorce and community property

When a couple divorces in a community property, each spouse is entitled to a half share of their marital or community property, likewise each spouse would be responsible for an equal share of all marital debts. One of them would not be paying all the debts since it is a part of community debt. These laws are however different for every state so it is better to consult a divorce attorney for the division of debt and/or assets.

Community Property and Death

What happens to the property if one of the spouse’s dies? Again, it depends on the state laws. If the couple did not make a plan beforehand then it would at times depend on the laws of the state that whether or not the remaining spouse is entitled to the left property or not, in some states, these laws matter a great deal. For example the surviving spouse would inherit the entire property of the dead spouse if they had children together in Texas, but if the spouse had children from another marriage too then those children are entitled to receive 50% of the community property. The surviving spouse would only receive her share of 50% from the property.

Ways to keep Property separate

if your spouse came into the marriage with debts and you used your joint income has been used to cover those loans and debts, and you end up in a divorce, then you could be reimbursed for the amount you spent only in the divorce settlement.

If you or your spouse acquires a property after your legal separation then that property maybe treated as separated property, depending upon the rules in your state.

Other separate property would include educational debts (usually, some exceptions may apply where the degree benefited the community property) or an activity not done for the benefit of the community property.

Community property is somehow complicated as different states have different laws and legislations so before getting into any settlement or dissolving any assets it is important for you to go through the laws of your state and consult an attorney who can guide you in properly and take care of all your legal proceedings. It gets complicated when you try to do your taxes and divisions yourself, you are already going through a rough time and under the emotions, you might make decisions that are not beneficial for long term so it is better that you hire an attorney and let him/her handle such matters for you.


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