Community property (United States) also called Community of Property (South Africa) is a marital property regime that originated in civil law jurisdictions but is now also found in some common law jurisdictions.[citation needed]. Community of property regimes can be found in countries around the world including Sweden,[1] Germany,[2] Italy, [3] France, [4] South Africa[5] and parts of the United States.[6]

Under community property regimes, depending on the jurisdiction, property owned by one spouse before marriage, and gifts and inheritances received during marriage, are treated as that spouse's separate property in the event of divorce. All other property acquired during the marriage is treated as community property and is subject to division between the spouses in the event of divorce. In some cases, separate property can be "transmuted" into community property, or be included in the marital estate for reasons of equity.

Variations

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Further information: Matrimonial regime

Jurisdictions

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Custom of Paris in New France

Main article: Marriage community

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South Africa

Main article: Marriage in South Africa § Financial consequences

In South Africa, if a couple does not sign an antenuptial contract, before a notary public, which is subsequently registered at a deeds office, prior to marriage, they are married in community of property, which means that all of their assets and liabilities (even those acquired before the marriage) are merged into a joint estate during their marriage, in which each spouse has an undivided half-share. Each spouse has equal power to deal independently with the estate, except that certain major transactions require the consent of both spouses.[7] One of the consequences of community of property in South Africa is that if one spouse is declared insolvent (bankrupt) during the marriage, the other also becomes insolvent, a potentially devastating consequence.[1]

United States

Main article: Community property in the United States

Map of the United States with community property states in red. Additionally, Alaska, Kentucky, and Tennessee are elective community property states, and of the five inhabited US territories, Puerto Rico and Guam are community property jurisdictions.
Map of the United States with community property states in red. Additionally, Alaska, Kentucky, and Tennessee are elective community property states, and of the five inhabited US territories, Puerto Rico and Guam are community property jurisdictions.

The United States has nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.[8] Three other states have adopted optional community property systems. Alaska allows spouses to create community property by entering into a community property agreement or by creating a community property trust.[9] In 2010, Tennessee adopted a law similar to Alaska's and allows residents and non-residents to opt into community property through a community property trust.[10] Most recently, Kentucky adopted an optional community property system in 2020, allowing residents and non-residents to establish community property trusts.[11] The commonwealth of Puerto Rico allows property to be owned as community property also[8] as do several Native American jurisdictions.

Division of community property may take place by item by splitting all items or by values. In some jurisdictions, such as California, a 50/50 division of community property is strictly mandated by statute[12] so the focus then shifts to whether particular items are to be classified as community or separate property. In other jurisdictions, such as Texas, a divorce court may decree an "equitable distribution" of community property, which may result in an unequal division of such. In non-community property states property may be divided by equitable distribution. Generally speaking, the property that each partner brings into the marriage or receives by gift, bequest or devise during marriage is called separate property (not community property). See division of property. Division of community debts may not be the same as division of community property. For example, in California, community property is required to be divided "equally" while community debt is required to be divided "equitably".[13]

Notes

  1. ^ Morley, Jeremy. "Marrying a Swede? Or Swedish and Getting Married? Don't You Need a Prenuptial Agreement?".
  2. ^ "Is there a statutory matrimonial property regime and if so, what does it provide? - Couples in Germany". www.coupleseurope.eu.
  3. ^ "Is there a statutory matrimonial property regime and if so, what does it provide? - Couples in Italy". www.coupleseurope.eu.
  4. ^ "Is there a statutory matrimonial property regime and if so, what does it provide? - Couples in France". www.coupleseurope.eu.
  5. ^ "Marriage in Community of property - Family law".
  6. ^ "Marital Property: Who Owns What?". Findlaw.
  7. ^ "Marriage: the legal aspects" (PDF). Law Society of South Africa. 2011. Archived from the original (PDF) on 14 November 2012. Retrieved 2 February 2013.
  8. ^ a b "Internal Revenue Manual – 25.18.1 Basic Principles of Community Property Law". www.irs.gov. Retrieved 2016-08-05.
  9. ^ See Alaska Stat. §§ 34.77.020 – 34.77.995
  10. ^ McDaniel, A. Stephen; Adams Jr, C. Michael. "Community Property Joint Revocable Trust" (PDF). Wyatt Tarrant & Combs.
  11. ^ Kentucky Revised Statutes §§ 386.620, 622, 624.
  12. ^ See California Family Code section 2550.
  13. ^ See In re Marriage of Eastis, 47 Cal. App. 3d 459 (1975).

References