Many divorcing couples worry about the impact that their divorce will have on their future and their finances. How much of your savings will you lose in the process of property division? What will happen to your retirement accounts? Will you be able to keep your home, your car or your family business? Because property division impacts so much of your life, it is essential to know how Louisiana divides property so that you can make informed choices about your legal strategy.
Louisiana is a community property state
Generally speaking, the court regards any property that you and your spouse acquire during your marriage as community property. This property includes:
- Gifts addressed to both you and your spouse
- Revenue from renting community property
- Damages related to jointly owned assets
- Retirement savings, even if this property is only under one person’s name
Because these assets belong equally to you and your spouse, the court will divide them as evenly as possible, given each spouse’s circumstances.
Separate property, on the other hand, is any property owned by only one spouse. It can include:
- Gifts given to only one person
- An inheritance that you received
- Property that you owned before your marriage
The court will not divide this property during your divorce.
Your community property may include more than you think
For the most part, the court will view you as the sole owner of your separate property. However, separate property can become “commingled” with your community property if you can’t distinguish the funds and trace the funds. It is also important to remember that the court will divide your debts alongside your bank accounts and other property. For the most part, debts acquired during the marriage will be community debts, even if only one spouse acquired that debt in their name, including your:
- Home mortgage
- Loans against retirement accounts
- Credit card debt in only one name
You can also establish that some assets are separate property even if you acquired those assets during your marriage. A prenuptial or postnuptial agreement can designate that your bank accounts, home, debts and other assets as separate property if you and your spouse should divorce in the future.