Property Division by State

If you and your spouse can't determine how to divide property and debts during your divorce, a judge will divide them for you under your state's laws. Historically, there's been a distinction between states that use the "equitable distribution" rule and states that follow the community property principle. But that distinction is not as clear as it once was.

Equitable Distribution

In most U.S. states, judges must divide a couple's assets and earnings accumulated during marriage equitably (fairly)—but not necessarily equally—when they divorce. In some of those states, the judge may order one party to use separate property to make the settlement fair to both spouses.

What sometimes makes this confusing is that division of property does not necessarily mean a physical division. A court may award each spouse a percentage of the total value of the property. In that event, each spouse will get personal property, assets, and debts whose worth adds up to an assigned percentage.

Community Property

There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In these states, all of a married couple's property is classified as either community or separate property. Community property belongs to both spouses jointly (often referred to as the "community estate"), regardless of the title on the property. Separate property belongs to one of them individually.

Generally, community property is all of the income and other assets that either or both of the spouses acquire during the marriage. Separate property refers to any property one spouse acquired before the marriage or after either separation or divorce (depending on the state). Separate property also includes any gifts or inheritances that either spouse receives at any time. There are exceptions to these general rules, which are spelled out in each state's property laws.

Community property ownership applies in different situations: during the marriage (for instance, with respect to creditors), after one spouse dies (for purposes of inheritance), and during divorce. Traditionally, that meant that community property states required an equal (50/50) division of community property in divorce (unless the spouses agreed otherwise). That's still the rule in some community property states. But others now require or allow judges to divide property equitably, even if that results in an unequal division. And Washington even allows judges to include separate property when they're distributing a couple's assets.

When Spouses Hide Assets

It's illegal for either spouse to hide assets in order to shield them from property division during divorce. If you do this—and your spouse has managed to find the hidden assets—a judge may punish you with sanctions and, in some states, by awarding your spouse a percentage of the value of the hidden asset. In California, for instance, if you fraudulently hide an asset from your spouse during the divorce, a court could award 100% of that asset to your spouse as a punishment.​ If the failure to disclose the asset wasn't fraudulent, the court may still award 50% of its value to your spouse. (Fam C § 1101(g), (h) (2022).)

Division of Marital Property Laws by State