Equitable Division vs. Community Property: Key Differences in Divorce Property Division by State

If you and your spouse can't agree on how to divide property and debts during divorce, a judge will divide them under your state's laws. Most states follow equitable distribution rules, while nine states use a community property system. The key difference is how they split things up. Equitable distribution means a judge divides property fairly based on different factors. Community property traditionally means everything gets split equally at 50/50.

What Is Equitable Distribution?

Most U.S. states use a system called equitable distribution. In these states, judges divide a couple's property and earnings fairly when they get divorced. But fair doesn't always mean equal.

Judges look at several things when deciding how to divide property. They consider how long the couple has been married and each person's financial situation. They look at how much money each person makes and has the potential to make in the future. They also think about what each person did during the marriage, like childcare and supporting their spouse's career.

In some states, a judge might even ask one person to give up some of their separate property. This happens when it's needed to make the settlement fair to both people.

Dividing property doesn't mean cutting everything in half. Instead, the court gives each person a percentage of the total value. For example, one person might get the house while the other gets retirement accounts and a car. Each person receives property, assets, and debts that add up to their assigned percentage. The goal is that the total value each person gets is fair.

What Is Community Property?

Nine states use community property rules: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In these states, all of a married couple's property is classified as either community property or separate property. Community property belongs to both spouses jointly, no matter whose name is on the title. Separate property belongs to just one spouse.

Community property includes all income and assets that either spouse acquires during the marriage, including paychecks, houses, cars, bank accounts, or retirement savings. Separate property is anything one spouse owned before getting married. It also includes property acquired after the couple separates or divorces, depending on the state. Gifts and inheritances are also separate property, even if you receive them during the marriage. Keep in mind that each state has some exceptions to these rules.

Traditionally, community property states split everything equally at 50/50 in divorce. Some states still follow this strict rule. But other community property states, like Washington, allow judges to divide property and debts in a just and equitable way, which doesn't always mean a 50/50 split.

When Spouses Hide Assets

It's illegal to hide assets from your spouse during a divorce. Both spouses must disclose everything they own. If you try to hide assets and your spouse finds out, you could face serious punishments from the judge. The judge can punish you with sanctions (fines) and, in some states, award your spouse part or all of the hidden assets as punishment.

Division of Marital Property Laws by State