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What does community property division mean for a marital home?

On Behalf of | Jun 29, 2023 | Family Law |

People often don’t know what to expect during a divorce, as they may only heard stories from co-workers or their favorite TV shows to teach them about the process. The problem with such stories is often that they take place somewhere other than Louisiana.

The rules for divorce are slightly different in every state, as every state legislature has had to adopt laws related to property division, spousal support and child custody matters. In Louisiana, the current statute for property division requires a community property approach. Most states have a different type of rule, which means that people often don’t know what to expect.

What is community property?

What people earn or purchase during their marriages is generally considered community or marital property. Each spouse has an ownership interest in those resources even if they don’t have their name on them the account or didn’t directly play a role in acquiring said resources. Community property rules generally require the division of assets and debts that couples accrued during the marriage. Many people expect a 50/50 division of assets from community property proceedings, which can be confusing when the asset isn’t something they can actually split. Someone cannot half-possess a home.

Still, spouses often divide a home’s equity. There are many different ways to handle a marital home in a Louisiana divorce. The two most common are either to have one spouse retain possession and ownership of the property or for the spouses to sell the home. In either scenario, each spouse generally receives a fair share of the home’s equity. When one person keeps the home, they usually have to refinance and may need to withdraw equity to pay off their spouse for their interest in the property. Other times, there could be other assets used to represent one spouse’s share of the home equity, such as a business or a retirement account.

Spouses can take control of the property division process

Divorcing couples in Louisiana don’t need to wait for a judge to decide what happens with their property. They always have the option of cooperating with each other and reaching an amicable settlement. Understanding the rules that apply to the biggest assets owned by the family may help divorcing spouses plan a more effective strategy for cooperative or contentious property division matters.