How Assets Are Divided in Divorce — By State (Community vs Equitable)
How your assets get split in divorce depends heavily on which state you live in. Nine states follow "community property" rules that generally split marital assets 50/50. The other 41 states (plus DC) use "equitable distribution," where a judge divides assets based on what's "fair" — which doesn't always mean equal. Understanding your state's system is the first step in knowing what to expect.
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Community Property vs Equitable Distribution
| Feature | Community Property (9 states) | Equitable Distribution (41 states + DC) |
|---|---|---|
| Basic rule | 50/50 split of marital assets | "Fair" split based on multiple factors |
| Typical outcome | Each spouse gets half | Often 55/45 to 70/30 |
| Judge's discretion | Limited — 50/50 is the starting point | Significant |
| Factors considered | Primarily: marital vs separate property | Income, earning capacity, marriage length, contributions, health, age |
| States | AZ, CA, ID, LA, NV, NM, TX, WA, WI | All other states |
The 9 Community Property States
| State | Notable Rules |
|---|---|
| Arizona | Strict 50/50; quasi-community property rules for assets acquired elsewhere |
| California | 50/50; one of the broadest definitions of community property |
| Idaho | 50/50; separate property stays separate if kept unmixed |
| Louisiana | 50/50; community regime begins at marriage |
| Nevada | 50/50; courts can award unequal split for "compelling reasons" |
| New Mexico | 50/50; quasi-community property concept |
| Texas | 50/50 starting point; court can adjust for "just and right" reasons |
| Washington | 50/50 starting point; judge has "just and equitable" discretion |
| Wisconsin | Marital property state (similar to community property) |
Alaska allows couples to opt into community property by agreement but defaults to equitable distribution.
What Counts as Marital vs Separate Property
| Marital Property (Divisible) | Separate Property (Not Divisible) |
|---|---|
| Income earned during marriage | Assets owned before marriage |
| Home purchased during marriage | Inheritances received individually |
| Retirement contributions during marriage | Personal gifts from third parties |
| Joint bank accounts | Personal injury settlements (pain/suffering portion) |
| Business value built during marriage | Property kept completely separate and unmixed |
The critical concept: commingling. If you inherit $50,000 and deposit it into a joint account, it may become marital property. To protect separate property, keep it in a separate account in your name only, and never mix it with marital funds.
Equitable Distribution: What Judges Consider
In the 41 equitable distribution states, judges weigh some or all of these factors:
| Factor | How It Affects the Split |
|---|---|
| Length of marriage | Longer marriages → closer to 50/50 |
| Each spouse's income and earning capacity | Lower earner may get more |
| Age and health of each spouse | Older/sicker spouse may get more |
| Contributions to marriage (including homemaking) | Recognized even without income |
| Standard of living during marriage | Courts try to maintain it for both parties |
| Custody of minor children | Custodial parent often keeps the house |
| Tax consequences of division | After-tax value matters, not face value |
| Dissipation of assets | If one spouse wasted money, the other is compensated |
In practice, most equitable distribution divorces end up somewhere between 50/50 and 60/40, with the lower-earning spouse typically receiving the larger share.
The Hidden Trap: Not All Assets Are Equal
A $200,000 house and a $200,000 401(k) are not the same:
| Asset | Face Value | After-Tax Value | Liquidity |
|---|---|---|---|
| $200,000 in cash | $200,000 | $200,000 | Immediate |
| $200,000 home equity | $200,000 | ~$188,000 (after selling costs) | Weeks-months |
| $200,000 401(k) | $200,000 | ~$150,000 (after 25% tax) | Penalties if under 59½ |
| $200,000 Roth IRA | $200,000 | $200,000 (tax-free) | Available |
Always compare assets on an after-tax basis. Many people accept the 401(k) thinking it's equal to the house equity — it's not.
For planning your complete financial approach, see Financial Planning for Divorce — Checklist. For retirement account specifics, read Divorce and Retirement Accounts. And for the tax side of things, check Tax Filing Status After Divorce.
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