When going through a divorce, property division is one of the things people worry about the most.
In many states, property and assets end up categorized as community or separate. But what exactly does this mean?
Community and separate properties defined
The Business Professor discusses community versus separate property. Community property includes joint assets or things owned by both partners. In a divorce situation, these are the assets up for division.
In many cases, joint assets include things like houses, cars and other big-ticket purchases that used both of the couple’s money. Anything bought with a joint account also tends to count as community property.
Separate property, on the other hand, are assets that cannot get divided in a divorce. This includes things like inheritances, gifts, and any assets owned by the person before they got married.
When separate property becomes community property
However, there are some instances in which separate property may become community property. For example, if a person puts their inheritance money into a joint account, it then counts as community property and is subject to division in the same way.
For this reason, popular suggestion states that couples should take care in managing their separate and community property throughout their marriage. Despite older opinions, this is not a sign of mistrust in one’s spouse. It is a realistic preparation for a potential future, and it is always best to not get caught off guard.
By taking the time to understand property from the start of the marriage, it saves a lot of trouble if a couple ever gets divorced.