A principle issue in any divorce is how to determine the division of assets, specifically, how to divide community property.

Community property is defined as everything that spouses co-own. California, for example, is a community property state, meaning that upon marriage, both spouses become a financial unit. The husband and wife own an equal share of all money made by either one during the marriage, from the beginning until the official date of separation. In addition, all property and assets purchased during the marriage with "community" money is owned equally by both spouses, without considering who did the actual purchasing.

However, only a minority of states have "community property" rules. Most states follow Equitable Distribution rules which classify jointly owned property as "Marital".

Debts fall under many of the same rules as property in a marriage. All debts accrued from the beginning of the union until the official date of separation qualify as community debts, meaning each spouse is held equally liable for these debts. In many instances, community debt encompasses outstanding credit card balances, home mortgages and car loan balances.

Due to community debt rules, it is important to end financial ties as soon as a couple opts for a divorce. This does not mean spouses should simply remove names from the accounts; they should officially close them. Credit cards, bank accounts, and any other joint accounts should be addressed.

Separate property is the opposite of community property and includes everything which a husband and wife own separately. In the event of a divorce, separate property does not need to be split between the couple. In most instances, separate property qualifies as:

• Assets owned before the marriage
• Assets inherited or received as a gift during the marriage
• Anything either spouse earned after the official date of separation

Additionally, separate property can include what one spouse grants to the other in writing. In certain instances, separate property can mix together with community property, so it is important to be able to trace payments and prove where certain money came from. For example, a husband may have made the down payment for a house, married, and then paid off the mortgage with community property. Upon divorce, the husband could be reimbursed for the down payment provided he was able to provide evidence that his separate funds were used to pay it. No interest would be payable on the down payment amount.

Just as community debt follows community property rules, separate debt follows separate property rules. Separate debts belong to one spouse and include debts accrued before the marriage. Student loans or job training loans, for example, taken before the marriage count as separate debts.

Date of Separation

In most states, the date of separation is the official date when both parties decide once and for all that a marriage is finished, and have no plan to stay together as a couple. This date is critical since it marks the end of when property can be characterized as community property. Unfortunately, the date of separation is frequently subjective and often argued in court. To determine the date, courts look for tangible proof of the final breakdown of family relations, such as one spouse moving out of the house. Some states require actual physical separation, meaning that you do not live under the same roof.

For more information about divorce, visit our partner LegalZoom. Here, you'll find a free, online legal library providing all the information and resources you need when considering divorce. The Law Library Topics provide general divorce information, and FAQs answer some of the most common questions people ask. These features, combined with the Glossary and Useful Resources, allow you to make sure your divorce decisions are informed ones.

LegalZoom is not a lawfirm and can only provide self-help services at your specific direction. Information contained above is subject to change and is not applicable to every state. Visit LegalZoom.com for specific state-by state-documents.

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