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How are properties categorized in divorce?

During divorce, community assets typically get divided in accordance with what the law finds equal or equitable, depending on the state the divorce happens in.

But how does the court determine which properties count as community properties?

Separate and community properties

The Business Professor looks at both types of property. This includes community and separate properties.

Separate properties include those assets which each individual member of a couple may keep to his or herself even after asset division. This often includes things like inheritance, gifts, and anything owned by the individual before the marriage.

Community properties get divided during the divorce process, as they belong to each person in a couple equally. This often includes things like land parcels, houses or cars. Anything signed under both of the couple’s names and anything purchased with a joint account also falls under this category.

Transfer properties

Also of note: separate property may become community property. For example, if a person deposits inheritance money into a joint bank account that they share with their spouse, this money no longer counts as separate property even though it came from an inheritance.

Thus, keeping assets separate during the marriage itself is crucial. Though some may see it as fatalistic, it is a wise financial decision to make in the event that divorce does happen.

For couples finding themselves in the midst of divorce with many of their assets entangled, they will simply have to go through the division process for a large number of community properties. But understanding this division and definition can reduce some of the stress.

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