Asset division is a common concern among many divorcing spouses, and it can quickly become a point of conflict. This is understandable because spouses often invest a significant amount of time and effort to attain nice things for their family, and the way those assets are divided can influence each spouse’s situation post-divorce.

However, not all assets are subject to division during divorce. If you and your spouse are headed for divorce, it may be helpful to understand which assets get divided and which assets are excluded from division.

What is community property?

Generally, community property includes all the property you or your spouse acquired during your marriage. You and your spouse each own half of every community property item, so the interest in these items must be divided in divorce. Usually, community property is divided equally between spouses in divorce.

What is separate property?

Separate property generally includes property one spouse acquired before marriage, as well as property one spouse received as a gift or inheritance. Separate property belongs only to one spouse, so it is not subject to division in divorce. However, all property will probably be assumed to be community property until a spouse proves otherwise.

Are there other important details I should keep in mind?

Determining what property is subject to division can sometimes be complicated. As you consider how your family’s property might be classified, there are a few additional rules to keep in mind.

  • Property acquired mostly or entirely with separate property will also be separate property, and property acquired mostly or entirely with community property will be considered community property.
  • Separate property that gets commingled with community property becomes community property.
  • How property is titled does not affect its classification as community or separate property.

Asset division is important because the outcome can affect where you live, your lifestyle post-divorce and how financially prepared you are for retirement, among other factors. Understanding how property is classified can help you better plan for the asset division process, which can help you as you and your divorce team pursue the best possible outcomes for your situation.