Louisiana Divorce: Dividing Property

When we think of hot-button issues in a divorce, the usual suspects are alimony or child custody. But dividing a couple's property can also be a big source of conflict, especially when it comes to things like determining who gets the marital home or even the family pet. If you're facing divorce, it's important for you to understand how Louisiana's divorce law addresses the division of property and allocation of debts.

• Is Louisiana a Community Property State?
• Characterizing Community and Separate Property in Louisiana
  • What's Considered Community Property in Louisiana?
  • What's Considered Separate Property in Louisiana?
  • When Spouses Can Agree to Convert Community Property to Separate Property
  • When Separate Property Becomes Community Property?
• How Is Property Valued in a Louisiana Divorce?
• Can You Agree on How to Divide Your Property?
• How Do Judges Allocate Community Property in a Louisiana Divorce?
  • Reimbursement for Contributions to a Spouse's Education
  • Who Gets the Family Home in a Louisiana Divorce?
  • What About Dividing 401(k) and Other Retirement Accounts?
  • Who Gets the Family Pet in a Divorce?
• Getting Help With Your Divorce and Property Division

Is Louisiana a Community Property State?

Yes, Louisiana is a community property state.

Basically, that means that during the marriage, both spouses have an equal interest in all of their property, except for assets and debts that are considered separate property (as discussed below). And when a couple gets divorced in Louisiana, the judge will divide their community property equally, unless the spouses have agreed to a different way of splitting up their assets and debts. But each spouse will keep their own separate property.

Characterizing Community and Separate Property in Louisiana

The first step in approaching property division is to determine which assets and debts will or will not be included in the distribution. That boils down to figuring out which assets are community property and which are separate property.

What's Considered Community Property in Louisiana?

Louisiana law presumes that any property spouses have during their marriage is community property, unless a spouse can prove otherwise. Community property includes anything not classified as separate property, including:

• property acquired during the marriage through the efforts of either or both spouses
• proceeds of community property (such as rental income)
• property acquired with community assets or with a combination of community and separate assets, as long as the value of the separate contribution was relatively minimal
• gifts to both spouses, and
• damages for loss or injury to community property.

(La. Civ. Code art. 2338, 2340 (2023).)

What's Considered Separate Property in Louisiana?

Under Louisiana law, separate property includes:

• property a spouse acquired before the marriage or acquired during the marriage with that spouse's separate assets
• property acquired with both separate and community assets, but only if community property contribution was relatively minimal
• an inheritance or gift to one spouse individually
• certain damages awarded to a spouse for breach of contract by the other spouse, or for losses sustained because of the other spouse's fraud or mismanagement of community property
• damages awarded to a spouse as a result of management of that spouse's separate property, and
• things that a spouse acquired as a result of the couple's "voluntary partition of the community" during the marriage (more on that below)

(La. Civ. Code art. 2341 (2023).)

When Spouses Can Agree to Convert Community Property to Separate Property

Couples may agree—either before or during the marriage—to treat the ownership of their property differently than it's treated under Louisiana law. For instance, they may sign a "voluntary partition of the community" to convert community property to the separate property of one spouse.

Unless a couple has signed a prenuptial agreement before the marriage or has moved to Louisiana within the past year, both spouses will need to file a joint petition with the court to get approval for their matrimonial agreement to change the treatment of their property as community or separate. A judge will approve the agreement only after finding that it serves their best interests and that they both understand the rules. (La. Civil Code art. 2329 (2023).)

When Separate Property Becomes Community Property?

Separate property can be converted ("transmuted") to community property. In most cases this will happen:

• intentionally, such as when the spouse who owns the separate asset changes title to the property to include the other spouse, or
• unintentionally, by commingling separate property with community property, such as when a spouse deposits money from an inheritance into a joint bank account, not realizing the consequences.

How Is Property Valued in a Louisiana Divorce?

It always pays to prepare your financial information before the divorce process starts. If you hope to reach an agreement with your spouse about how to divide your community property, you'll first need to agree on which property will be included in that division and the value of that property. In many cases, determining an asset's value is fairly straightforward, such as obtaining the balances on bank accounts. With certain types of property (such as a house, family business, or pension plans), you'll probably need help from financial experts like appraisers, forensic accountants, or actuaries.

If you and your spouse can't agree on the value of any particular asset, even after getting expert help, you'll probably need to have a judge decide for you. Shortly after either spouse files a motion (a formal written request with the court), both spouses will have to submit a detailed list of all of the couple's community property, including:

• the fair market value and location of community assets, and
• the amount owed on any community debts.

Each spouse must affirm under oath that the list of community property is complete and accurate, as far as that spouse knows. Then, each spouse must either agree with the other spouse's list or file a formal legal document (known as a "traverse") contesting anything on the list, including the valuation of an asset. A judge will then hold a trial and decide on the value of the community assets. (La. Rev. Stat. § 9:2801(A)(1), (2) (2023).)

Can You Agree on How to Divide Your Property?

You and your spouse always have the option of agreeing on how you'll split up your property when you get divorced, rather than having a judge decide for you. In fact, the courts strongly encourage divorcing couples to settle all their marital issues before a trial is necessary, and they provide ample opportunity to do that during the divorce process. You'll need to submit the agreement to the court for approval, but judges will almost always approve these agreements as long as they appear to be fair.

Also, if you and your spouse reach a complete marital settlement agreement before you file your divorce papers—covering all the legal issues involved in ending your marriage—you'll be able to file for an uncontested divorce in Louisiana. Uncontested divorces are much cheaper, quicker, and easier than traditional contested divorces. Many couples are able to navigate the uncontested divorce process without hiring a lawyer, either entirely DIY or by using an inexpensive online divorce service to streamline the process.

How Do Judges Allocate Community Property in a Louisiana Divorce?

At a trial on the property division, the judge will review all the evidence—including the opinions of any experts that the judge has appointed to help with the process. Under Louisiana law, the judge must then:

• decide the value of each community asset as of the trial date
• determine how much the couple owes in community debts
• decide on any claims the spouses have made (more on that below), and
• divide the community assets and allocate the community debts so that each spouse receives property of an equal net value (in other words, the worth of the assets each spouse receives minus the amount of debts each spouse will be responsible for paying should be the same).

An equal property division doesn't mean that the judge will divide each asset or debt equally between the spouses. Instead, the goal is to reach an overall 50-50 split. Judges have leeway in deciding which assets to award to which spouse, after they consider:

• the nature and source of the asset or debt
• each spouse's economic condition, and
• any other relevant circumstances.

If it's not possible to split up the assets so that each spouse receives assets of equal value, the judge may order the spouse who's getting a larger share to pay the other spouse an amount of money (known as an "equalizing payment") to make up the difference. (La. Rev. Stat. § 9:2801(A)(4) (2023).)

Reimbursement for Contributions to a Spouse's Education

In a Louisiana divorce, a judge may award money to a spouse as reimbursement for contributions to the other spouse's education or training, to the extent that the contributing spouse didn't already benefit from the other spouse's increased earning power. This award will be in addition to any alimony or assets the spouse receives as part of the property division. (La. Civ. Code art. 121 (2023).)

Who Gets the Family Home in a Louisiana Divorce?

During a Louisiana divorce, the spouse who has temporary custody of the children may ask the judge to be allowed to stay in the family home with the kids. When considering that request, the judge will look at each spouse's economic status, as well as the children's needs, before making a decision based on the family's best interests. If the judge does award use of the home to the custodial spouse, the temporary award will last until the couple's property has been divided or 180 days after the divorce is final, whichever comes first. (La. Rev Stat. § 9:374(A), (B) (2023).)

When it comes to deciding who gets to keep the family home after the divorce is final, Louisiana law doesn't favor either spouse. If you and your spouse own your home and can't agree on what to do with it, the judge will make a decision based on the specific circumstances in your case.

When one spouse gets the house, the judge will typically award different assets—such as retirement accounts—to the other spouse to arrive at an equal division of all the couple's property. Of course, many couples don't own enough other assets to balance out the value of a house. So the judge may simply order them to sell the house and divide the proceeds. If you don't want a forced sale, you'd be wise to work out an agreement with your spouse after exploring the other options for dealing with the family home.

What About Dividing 401(k) and Other Retirement Accounts?

Retirement plans are part of property division in a divorce. It can be complicated to value these plans, especially defined-benefit pensions or 401(k) plans that one spouse started before the marriage. In these cases, you'll almost certainly need the services of an actuary or an attorney trained in calculating the portion of the plan that's subject to distribution in the divorce.

Also, when you're dividing employment related retirement plans, such as a 401(k) or a pension, you'll need an expert to prepare a special order (known as a qualified domestic relations order, or "QDRO") for the plan administrator.

Who Gets the Family Pet in a Divorce?

Even though many people think of pets like members of the family, Louisiana law considers animals to be property. (Barrios v. Safeway Ins. Co., 97 So. 3d 1019 (La. Ct. App. 2012).) As such, they're subject to distribution in divorce just like an automobile or a couch.

If one spouse got the pet before the marriage, the animal will usually stay with that spouse after the divorce. But if the couple got the pet during the marriage, it's up to the judge to decide who gets to keep it. Unlike a few other states, Louisiana law doesn't specifically allow judges to take into account the animal's well-being or to award joint custody of a pet. Still, when empathetic judges are deciding who gets the pet in the divorce, they will often consider the impact of their decision on members of the family, especially the children.

Getting Help With Your Divorce and Property Division

If you're having trouble agreeing with your spouse about how to divide your property, you can try mediation. The cost of divorce mediation varies, but you and your spouse can split the mediator's fee. And a successful mediation will be considerably less expensive than going to trial (with attorneys' fees for both of you).

But if you still aren't able to reach a settlement agreement, even with a mediator's help, you should at least speak with a lawyer. An experienced family law attorney can evaluate your case and lay out your options going forward. Having a lawyer on your side is especially critical if you're experiencing domestic violence in your marriage or if you suspect that your spouse is hiding assets.

You should know that the question of whether you need a divorce lawyer isn't always an all-or-nothing choice. Sometimes, you can hire an attorney on an as-needed or consulting basis to handle certain tasks in your divorce, such as drafting or reviewing your settlement agreement, to make sure you haven't missed anything important or inadvertently given up important rights.