Louisiana Community Property Partition Law Firm
Louisiana is a community property state, which means that marital property will generally be distributed evenly between the spouses. Community property includes most assets acquired by either spouse during the marriage, while separate property includes property acquired prior to or outside of marriage. Community property is subject to division between the spouses, while separate property is not. If you are going through a divorce and community property dispute be sure to retain the services of an experienced family law attorney. We care about ensuring you get what is rightfully yours.
Classification of Property
The classification of property as community or separate is typically made as of the point of acquisition of the asset. Per La. Civ. Code art. 2340, things in the possession of a spouse during the existence of a regime of community of acquets and gains are presumed to be community, but either spouse may prove that they are separate property. The presumption of community under this provision is rebuttable. For example, the presumption is rebutted as to property acquired prior to marriage by evidence establishing the date of acquisition and as to property inherited during marriage by the judgment of possession.
Per La. Civ. Code art. 2338, community property comprises: property acquired during the existence of the legal regime through the effort, skill, or industry of either spouse; property acquired with community things or with community and separate things; property donated to the spouses jointly; natural and civil fruits of community property; damages awarded for loss or injury to a thing belonging to the community; and all other property not classified by law as separate property.
Per La. Civ. Code art. 2339, revenue generated from the separate property of a spouse, minerals produced from to a separate asset, and royalties arising from mineral leases are community property. Nevertheless, a spouse may reserve them as his separate property by a declaration made in an authentic act or in an act under private signature duly acknowledged. A copy of the declaration shall be provided to the other spouse prior to filing of the declaration in the conveyance records of the parish in which the immovable property is located. As to fruits of movables, the declaration is effective when a copy is provided to the other spouse and the declaration is filed for registry in the conveyance records of the parish in which the declarant is domiciled.
Common examples of community property include earnings during the marriage, a home acquired during the marriage, automobiles and boats purchased during the marriage, businesses started during the marriage, and retirement accounts opened during the marriage.
Per La. Civ. Code art. 2341, separate property comprises: property acquired by a spouse prior to the establishment of a community property regime; property acquired by a spouse with separate things or with separate and community things when the value of the community things is inconsequential in comparison with the value of the separate things used; property acquired by a spouse by inheritance or donation to him or her individually; damages awarded to a spouse in an action for breach of contract against the other spouse or for the loss sustained as a result of fraud or bad faith in the management of community property by the other spouse; damages or other indemnity awarded to a spouse in connection with the management of his separate property; and things acquired by a spouse as a result of a voluntary partition of the community during the existence of a community property regime.
Common examples of separate property include property acquired prior to the marriage or after a divorce petition is filed, inheritance, and donations made to one spouse. A spouse who receives a donation or inheritance and who intends to keep it separate should be careful not to donate it to the community. For example, a cash inheritance that gets deposited into a joint bank account could become so comingled after years pass that it arguably becomes part of the community.
Also, a spouse who acquires separate property prior to a marriage but then uses community funds to upkeep the property or pay the loan on the property may owe reimbursement to the other spouse for one-half of the amount of community funds used for the separate property. For example, a spouse who acquires a home prior to marriage will keep that home as separate property, but if the mortgage is paid with community funds during the marriage, then the other spouse will have a reimbursement claim after the dissolution of the marriage. Another common example of a reimbursement claim is a retirement account opened prior to a marriage but funded with community property during the marriage.
Just as property is classified as community or separate, so too are debts and obligations. La. Civ. Code art. 2360 states that an obligation incurred by a spouse during the existence of a community property regime for the common interest of the spouses or for the interest of the other spouse is a community obligation.
Conversely, La. Civ. Code art. 2363 states that a separate obligation of a spouse is one incurred by that spouse prior to the establishment of a community property regime, or one incurred during the existence of a community property regime though not for the common interest of the spouses or for the interest of the other spouse. An obligation resulting from an intentional wrong or an obligation incurred for the separate property of a spouse is likewise a separate obligation to the extent that it does not benefit both spouses, the family, or the other spouse.
Thus, even though only one spouse may sign for a debt, if the obligation is undertaken for their common interests, then both spouses are responsible for the debt. This may include the purchase of automobiles or credit card debt incurred by one spouse during the marriage.
Termination of the Community Property Regime
Per La. Civ. Code art. 2356, the legal regime of community property is terminated by the death or judgment of declaration of death of a spouse, declaration of the nullity of the marriage, judgment of divorce or separation of property, or matrimonial agreement that terminates the community regime.
The community property regime ends retroactive to the filing of the divorce petition. Choosing between an art. 102 and an art. 103(1) divorce has significant implications as to the eventual division of property. The community regime can last six months or even a year longer than it has to by choosing to file for divorce after living separate and apart. Spouses should retain a divorce attorney as soon as possible to avoid a costly mistake when it comes to community property.
During the divorce proceeding, the spouses may voluntarily partition the community property by agreement. In many instances, this is the best route to take if the spouses are willing to compromise. While ultimately they must work towards an even 50/50 split of the community assets and debts, they may intrinsically value some items differently. For example, one may care more about remaining in the family home more than the other, and buying out the other spouse with the liquid community assets may be a relatively smaller price to pay for him or her.
The options when negotiating community property division are numerous. On the other hand, litigating the property partition before a judge may leave both parties unhappy. Before taking a property partition to trial, the spouses should try to negotiate or even mediate their positions. If a judicial partition becomes necessary, the procedure is detailed in La. R.S. 9:2801.
Separate Property Agreements
Spouses can avoid property partitions and the community property regime altogether by entering into a separate property agreement, also known as a pre-nup or post-nup. By entering into a prenuptial agreement, you can dictate exactly what happens to property in a divorce. Even if you’re already married, you can enter into a postnuptial agreement, which accomplishes the same goal.
New Orleans Property Partition Attorneys
Bowes, Petkovich & Palmer, LLC is a Gretna law firm that has served the New Orleans area since 1980. Our experienced family law attorneys are well versed in all domestic matters including marital property partitions. We take pride in offering a personal and trusted experience. Call us today for a free consultation and find out why so many of our clients come back to us.