Duhaime's Law Dictionary


Community Property Definition:

A marriage property legal term; property acquired or owned during a marriage or, where recognized, a marriage-like relationship, and which belongs, notwithstanding title, as in a partnership and as tenants in common (“hence “community”), to each spouse equally and subject to division on that basis in the event of separation or divorce.

Related Terms: Matrimonial Asset, Separate Property, Marital Property, Matrimonial Property

"[C]ommunity property generally consists of all property, other than separate property, acquired by either spouse during the marriage. Moreover, property possessed by either spouse during the marriage is presumed to be community property, and the degree of proof necessary to establish that property is separate property is clear and convincing evidence."1

In the event of a permanent separation or divorce, the law provides for the fair division of property or assets acquired by the spouses during their period of marriage or cohabitation.

Traditionally, a wife had few property rights. In the eyes of the law, historically, she was absorbed within the legal person of her husband and thus, upon divorce, had no entitlement to jointly-enjoyed family property.

This common law injustice required adjustment to accommodate the inequity of the common law towards childbearing, child-rearing and homemaking mothers who, during those years, were unable to contribute financially towards the acquisition of income, pensions or other assets.

Statute law eventually gave women the right to hold separate income or property.

This being still insufficient to address the realities of long-term marriages, common law jurisdictions have since adopted one or the other, or permutations of each or both, two basic but distinct marriage property regimes.

In a nutshell, community property regimes create a legal presumption that all income or every asset acquired by either spouse during the marriage belongs equally to both. This regime is also called “community of property” or “marital property”.

Although subject to statutory distinctions in most jurisdictions, the general rule in community property jurisdictions is that each spouse has an equal entitlement to a half interest as tenant-in-common to any asset or income acquired during the marriage.

In community property regimes, for the purposes of property, marriage is taken to be a partnership and unless there is a contract to the contrary, the partners are presumed to contribute equally to the acquisition of property and entitled to an equal division.

The alternate regime, a separate property regime, the legal presumption is that individual assets or incomes belong to which ever spouse paid for it, earned it, is on title or to whom the asset was gifted.

Many community property jurisdictions allow for separate property exemptions especially for assets owned before the marriage or assets acquired during the marriage by gift or using inheritance monies, but never used for family purposes. This allows for adjustments to inequities that may arise from the strict application of a community property regime.

For example, the Louisiana Civil Code, at §2341, states:

“The separate property of a spouse is his exclusively.  It comprises: property acquired by a spouse prior to the establishment of a community property regime; property acquired by a spouse with separate things or with separate and community things when the value of the community things is inconsequential in comparison with the value of the separate things used; property acquired by a spouse by inheritance or donation to him individually; damages awarded to a spouse in an action for breach of contract against the other spouse or for the loss sustained as a result of fraud or bad faith in the management of community property by the other spouse; damages or other indemnity awarded to a spouse in connection with the management of his separate property; and things acquired by a spouse as a result of a voluntary partition of the community during the existence of a community property regime.”

Another variation of the community property regime is the ability of spouses to opt-out by way of a marriage contract or agreement in which they opt-out of the community property regime and institute their own system and process for determining and dividing mixed assets in the event of a separation or divorce or even after separation, by way of a separation agreement.

In law, many jurisdictions recognize a spouse's right to manage separate property during the marriage but once a separation occurs, all property owned by either spouse becomes subject to judicial determination and division based on whether or not each asset is exempt from the "acquired during the marriage" or "used for family purposes" definitions of community property.

REFERENCES:

  • In re Marriage of Weaver, 26 Cal. Rptr. 3d 121 (California Court of Appeals, 2005; Note 1; see aso In re Trammell)
  • In Re Trammell, 399 BR 177 (United States Bankruptcy Court, 2007)

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