Community Property States
Community Property: Property that is earned or acquired during the marriage.
When you divorce without a prenuptial agreement, community property laws entitle your spouse to half of everything you earned (50% of your salary, any monies earned or received from any source, and monies saved or invested in pensions, IRA, 401K, etc.) or acquired (appreciation of real estate, increases in value of stocks, investments, value of collectables, etc) during your marriage. (Unless, acquired through gift or inheritance).
Divorce in America And Prenuptial Agreements:
In American there are two types of law that govern divorce. You either live in a community property state or an equitable distribution state.
There are 9 community property states and 41 equitable distribution states.
Divorce in a Community Property State: if you do not have a prenuptial agreement, the law states that your spouse is entitled to half of everything you earn or acquire (unless acquired through gift or inheritance) during your marriage. This does not generally include what you acquired prior to your marriage, however, if you can not provide your spouse with the half she/he is entitled to under the law at the time of divorce a court can order you to liquidate assets acquired before marriage in order for you to obtain funds needed to compensate your spouse.
Alimony Applies: if you do not have a prenuptial agreement, alimony can be awarded depending upon individual circumstances and your spouse’s earning ability. You could be required to pay her/him for a limited or indefinite period of time.
Example: Steven Spielberg and Amy Irving married between 1985-1989 during this time Spielberg only earned $200 million with his biggest selling movies coming before and after the four year period of their marriage. Irving received $100 million, half of everything Spielberg earned during the parties’ marriage.
A properly prepared and executed prenuptial agreement will eliminate all of the above.
Community Property states
- New Mexico
Remaining states are equitable distribution states