There are two ways to treat property division in the US, and it depends on which state you live in.

If you reside in a US state, and you and your spouse can’t agree on how to divide jointly-owned property, then the courts will divide it for you according to “equitable distribution” or “community property” principles. (By the way, your joint debts will also be divided according to either equitable distribution or community property principles.) Although the specific details vary from state to state, the main difference between the two schemes is that in community property states, there is an absolute 50/50 split of all property acquired during the marriage, whereas in equitable distribution states, more assets might be considered marital property, but the split is not necessarily 50/50.

You should know that “property division” does not necessarily mean a physical division of all assets: physical assets, like a house or a car, can’t be split into two parts. Instead, the judge could award each spouse a percentage of the total value of the property, meaning that each spouse will receive assets (from cash to cars to real estate) and debts whose worth adds up to the percentage specified by the judge.

Let’s take a closer look at the two types of property division.

Community Property

In 11 states – Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin, and Puerto Rico – all property owned by a married couple will be classified as either community property – meaning that it is owned equally by both spouses – or the separate property – meaning that it is owned only by one of the spouses. During divorce, the courts generally divide community property equally between the spouses, and each spouse will keep his/her own separate property. Additionally, any separate property that is co-mingled with community property may lose its separate character and become community property to be divided 50/50.

Equitable Distribution

In the 39 remaining states, the court will divide assets (including earnings) acquired during marriage equitably. In this case, “equitable” is supposed to mean “fair” – but not necessarily “equal”. For example, in some equitable distribution states, the court could order one spouse to give some or all of his/her separate property to the other to make the settlement fair to both spouses. The bottom line is that property division in an equitable distribution state may or may not result in a 50/50 split of marital property; instead, the end goal is to create a fair distribution of family property.

Some of the factors a judge will consider when dividing property in an equitable distribution state include:

  • The length of the marriage
  • The lifestyle or standard of living established during the marriage
  • The value of childcare and/or homemaking provided by one spouse so that the other could earn income and advance his/her career during the marriage
  • Each spouse’s age and physical/mental health
  • Each spouse’s current income and earning capacity
  • The contribution one spouse made to the other’s training or education to create their earning capacity
  • Any other factors the judge considers relevant

Again, any separate property that is co-mingled with marital property may lose its separate character and become marital property to be divided equitably. See “Marital Property vs. Separate Property in Divorce” for more about co-mingling of assets.

For more information about property division, go to: www.divorcemag.com/property-division