Separate Property in Community Property States

Definition

In community property states, separate property is property owned by one spouse that is recognized as distinct from the property collectively owned by the marriage (community property). Separate property is typically acquired:

Before marriage,
Through inheritance or gift received by one spouse,
As personal injury awards to one spouse,
Through an agreement between spouses to classify certain properties as separate.

Community property, on the other hand, includes all income and real or personal property earned or acquired by either spouse during the marriage, except for certain exclusions.

Examples

Pre-marital Ownership: John owned a house before getting married. Under community property laws, this house is John’s separate property.
Gift or Inheritance: Lisa received a valuable painting as an inheritance from her grandmother during her marriage. This painting is considered Lisa’s separate property.
Personal Injury Awards: Tom won a personal injury lawsuit while he was married and was awarded a settlement. This settlement is categorized as Tom’s separate property.

Frequently Asked Questions (FAQs)

1. What happens to separate property upon divorce?

Upon divorce, each spouse retains ownership of their separate property. Community property is divided between the spouses according to state laws.

2. Can separate property become community property?

Yes, separate property can become community property if it is commingled (mixed) with community property and cannot be distinctly traced back to its separate status. Another way is through an explicit agreement between spouses to convert separate property to community property.

3. What proof is required to claim property as separate?

Proof in the form of documentation such as deeds, wills, gifts, prenuptial agreements, or other explicit records demonstrating the property was acquired before marriage, or by gift or inheritance, is required.

4. Are debts considered separate or community property?

Debts incurred by a spouse before marriage are usually considered separate, whereas debts incurred during marriage by either spouse are generally considered community debts unless specified otherwise.

5. Do prenuptial agreements affect separate property?

Yes, prenuptial agreements can define the terms and conditions under which property is categorized as separate or community during the marriage.

Community Property: Property owned jointly by both spouses in marriage, usually including earnings and property acquired during the marriage.
Devise: The act of transferring real estate through a will.
Commingle: Mixing separate property with community property to a point where it loses its separate identity.
Prenuptial Agreement: A contract entered into by two people before marriage specifying the ownership of their respective assets should the marriage dissolve.
Equitable Distribution: A legal principle under which property isn’t necessarily distributed 50/50 but fairly, considering circumstances and needs of each spouse.

Online Resources

References

Lewis, Robert and Linda Rappaport. Community Property: A Guide. Thomson Reuters, 2019.
Wortman, Marc. The Complete Guide to Marital Property. Self-Counsel Press, 2018.

Suggested Books

Gold-Bikin, Lynne Z. and Stephen Kolodny. Divorce and Property Division. American Bar Association, 2019.
Teichman, Sandra L. Understanding Separate & Community Property. Wiley Law Publications, 2016.
Mescher, Pamela. Navigating Marital Property Law. University of California Press, 2020.

Real Estate Basics: Separate Property Fundamentals Quiz

### What term describes property owned by one spouse before marriage or through inheritance during marriage in community property states? - [x] Separate Property - [ ] Community Property - [ ] Shared Property - [ ] Marital Property > **Explanation:** Separate property includes property owned by one spouse before marriage or received as a gift or inheritance during marriage, distinct from community property which is acquired during the marriage. ### Can separate property be transferred to become community property? - [x] Yes, through an agreement or commingling - [ ] No, it remains separate permanently - [ ] Only under a special court order - [ ] If the property value exceeds a certain limit > **Explanation:** Separate property can become community property if it is commingled with community property or through an explicit agreement between the spouses. ### What kind of proof is typically required to identify separate property? - [ ] A verbal statement of ownership - [ ] Presence of a witness - [x] Documentation like deeds, wills, or gift records - [ ] None, it's automatically separate > **Explanation:** Proper documentation such as deeds, wills, and records of gifts is necessary to prove property as separate. ### What happens to separate property in the event of a divorce? - [ ] It gets evenly split between spouses - [ ] It is assigned to the spouse who did not own it initially - [x] The owner spouse retains it - [ ] The court auctions it off > **Explanation:** Separate property remains with the spouse who owns it upon divorce, unlike community property which is divided. ### How is income earned from separate property typically treated? - [ ] It's always separate property - [x] It may become community property if not properly managed - [ ] It's divided equally between spouses - [ ] Dependent on length of marriage > **Explanation:** Income from separate property may become community property if commingled or not adequately managed as separate. ### Which of the following is a key related term to Separate Property? - [ ] Mortgaged Property - [ ] Rental Property - [x] Commingle - [ ] Cooperative Housing > **Explanation:** 'Commingle' is a key related term, as it refers to mixing separate property with community property. ### Can personal injury awards be considered separate property? - [x] Yes - [ ] No - [ ] Only in non-community property states - [ ] Depends on the court's decision > **Explanation:** Personal injury awards are typically considered as separate property owned by the injured spouse. ### Are debts incurred before marriage considered separate? - [x] Yes - [ ] No, they become community debts - [ ] Only if the other spouse agrees - [ ] They are split 50/50 > **Explanation:** Debts incurred before marriage are generally counted as separate liabilities. ### How can spouses safeguard separate property status? - [ ] Sharing everything equally - [x] Using prenuptial agreements - [ ] Not declaring any property - [ ] Combining all assets > **Explanation:** Prenuptial agreements can help clearly define and safeguard the status of separate property. ### Which standard does not usually apply to separate property across all types of community property states? - [x] Acquired during marriage - [ ] Personal injury awards - [ ] Pre-marital ownership - [ ] Property deemed by gift or inheritance > **Explanation:** Property acquired during the marriage is typically considered community property, not separate property.