How your assets are divided in divorce depends largely on where you live. States follow either community property or equitable distribution rules, and understanding which system applies to you is essential for anticipating how property will be divided.
The Two Major Systems
American states follow one of two approaches to dividing marital property:
Community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin (plus optional in Alaska).
Equitable distribution states: All other states, plus the District of Columbia.
The differences can significantly affect who gets what in your divorce.
Community Property: 50/50 Split
In community property states, most assets acquired during marriage belong equally to both spouses—regardless of whose name is on the title or who earned the money. At divorce, community property is typically divided 50/50.
Community property includes: income earned by either spouse during marriage, property purchased with that income, retirement benefits earned during marriage, and business interests acquired during marriage.
Separate property—which each spouse keeps—includes: assets owned before marriage, inheritances received by one spouse, gifts given specifically to one spouse, and proceeds from separate property.
Equitable Distribution: Fair but Not Equal
Equitable distribution states divide property "equitably," meaning fairly—not necessarily equally. Judges have discretion to divide assets based on factors they consider fair under the circumstances.
Common factors courts consider: length of marriage, each spouse's income and earning capacity, each spouse's contributions to the marriage (including homemaking), age and health of each spouse, custody arrangements for children, whether one spouse sacrificed career for family, and economic circumstances of each spouse.
An equitable division might be 50/50, 60/40, 70/30, or any other split the court finds fair.
Marital vs. Separate Property
Both systems distinguish between marital and separate property—though the terminology differs. In community property states, it's "community" vs. "separate." In equitable distribution states, it's "marital" vs. "non-marital."
Separate or non-marital property typically isn't divided—each spouse keeps their own. Disputes often arise over: whether property is truly separate or has become marital through commingling, the value of separate property that increased during marriage, and contributions of one spouse to the other's separate property.
Commingling and Transmutation
Separate property can become marital property through commingling—mixing it with marital assets so thoroughly that it can no longer be traced. For example, depositing an inheritance into a joint account used for family expenses may convert that inheritance to marital property.
Transmutation occurs when spouses intentionally change property character—such as adding a spouse's name to a separately-owned house.
Debt Division
Debts are divided under the same principles as assets. In community property states, debts incurred during marriage are typically divided equally. In equitable distribution states, courts assign debts based on factors like who benefited from the debt and ability to pay.
Military and Government Pensions
Special rules apply to military and federal government pensions. The Uniformed Services Former Spouses' Protection Act allows states to treat military pensions as property divisible in divorce. Similar rules apply to federal civilian pensions. These assets often represent significant marital wealth.
Business Interests
Business interests require careful valuation and division. Courts may consider whether the business existed before marriage, how much it grew during marriage, whether one spouse's contributions increased business value, and how to divide without destroying the business.
Prenuptial Agreements
Valid prenuptial agreements can override default division rules. If you signed a prenup specifying how property would be divided, that agreement generally controls—subject to requirements that the agreement was voluntary, fair, and properly executed.
Practical Implications
Understanding your state's system helps with planning. In community property states, outcomes are more predictable—you can generally expect an equal split. In equitable distribution states, more factors come into play, creating both opportunity and uncertainty.
Getting Legal Help
Property division involves complex legal and financial issues. An experienced divorce attorney can help identify what's marital vs. separate, value complex assets, present evidence supporting favorable division, and negotiate or litigate for your fair share.