Separate and community properties are terms that anyone involved in a divorce should have some awareness of.
What are these types of properties and how exactly do they relate to divorces?
Understanding community and separate properties
The Business Professor discusses community and separate properties in divorce. First: separate properties. These properties belong to an individual rather than to the couple. They often get exempt from the division process accordingly.
Assets that might count as separate include things like inheritance, assets owned before the marriage, and gifts given to one individual by other people in his or her life.
Community property, on the other hand, is what ends up divided in a divorce. These are assets and property owned by both parties in a couple. This includes things bought with both of the spouses’ money, things with both spouses’ names on the deed, or things bought using money from a joint account.
Figuring out community property
As one can guess, it often gets dicey figuring out what property technically counts as community and what counts as separate. On top of that, many couples end up fighting over potential community property as they want to get as much as they can from the divorce.
For these reasons, it is important for people to have a clear understanding of what is community and what is separate property, and to keep that division strong through the duration of the marriage. This can make things much easier in the event of a divorce. It is also a generally wise financial decision to make, even in a strong and stable marriage.