Wondering whether Louisiana is a community property state? Read on for everything you need to know about how community property works in Louisiana.
Yes, Louisiana is a community property state along with eight other U.S. states.
This means that in Louisiana, like in other community property states, most property acquired by a married couple is considered jointly owned by both spouses and is subject to a 50/50 property division in the event of a divorce.
But community property laws vary even between the states that take this approach. So what are the community property laws in Louisiana, and how is Louisiana community property divided in a divorce? Let’s take a closer look.
State laws vary on the details, but generally, states can be grouped into either community property states or equitable distribution states.
Community property states are states that consider most property acquired during a marriage, with limited exceptions, to be jointly owned by each spouse. These states typically divide community property equally between spouses during a divorce, while each spouse keeps their separate property.
Meanwhile, equitable distribution states have different rules regarding the property rights of married couples, and notably seek to divide property fairly (but not necessarily equally) during a divorce.
Most states take the equitable distribution approach, while Louisiana and eight other states have community property laws. (Those other states are Arizona, California, Idaho, New Mexico, Nevada, Texas, Washington, and Wisconsin).
In community property states, it is critical to understand the distinction between separate property and community property because separate property is treated differently if a couple divorces.
So what is separate property? Typically, a spouse's separate property is:
Separate property in Louisiana includes:
Note that for property acquired after a petition for divorce is filed, you must finalize the divorce for that property to be classified as separate property. In other words, if you and your spouse initiate the divorce process but do not ultimately get divorced, then you have not ended the community property regime.
Louisiana community property law assumes that property acquired during a marriage is community property. This includes:
Some examples of community property in Louisiana include:
Remember, the crucial factor for all these examples in determining whether they are separate or community property is that they must be acquired during the marriage to be considered community property.
Louisiana’s community property laws apply to couples who get married in Louisiana as well as married couples who move to the state. Couples can opt out of Louisiana’s community property regime through a prenup or a matrimonial agreement.
If a couple decides to enter a prenuptial agreement that would conflict with community property law in Louisiana, they are free to do so and do not need court approval. But if they seek to opt out of Louisiana’s community property regime through a matrimonial agreement after they are already married, they must file a joint petition with the court. (One exception is that couples who move to the state have one year to enter a matrimonial agreement without court approval, otherwise Louisiana community property rules will apply to their marital property by default).
Community debts are debts incurred during the marriage for the benefit of both spouses or that are incurred during the marriage by one spouse for the benefit of the other spouse. Like property, community debts are shared by the spouses jointly and are considered when determining the net value of the marital estate.
Note that Louisiana law provides for reimbursement for contribution to a spouse’s education if the other spouse did not already benefit from that spouse’s increased earning capacity. Louisiana law specifies that this compensation may be in addition to alimony and property received through the division of community property.
In Louisiana, community property is typically divided equally by a 50/50 split of the net value of the marital estate. The net value of the estate simply means the value of community property after accounting for any community debts.
In order to divide property, the court will first value the marital estate at the time of partition. This means valuing all community property and debts to establish the net value of the marital estate. Then, the court will resolve any claims either spouse has regarding the community property regime, such as if a spouse submits a claim for reimbursement for contributing to the education or job training of the other spouse.
Once the court determines the value of the marital estate, property is divided between the spouses so that each receives property of an equal net value.
And note this does not mean that each community asset is subject to a 50/50 split. For instance, it is much easier to divide the funds in a bank account than it is to divide a family home, for instance.
But if one spouse keeps the family home, then the other spouse will receive community property of equal value–a greater share of a retirement account, for example–to ensure that both parties end up with their fair share of the marital estate.
Louisiana community property law also provides for an equalizing payment when it is difficult to achieve an equal division of marital property. So if one spouse ends up with a greater share of community property in Louisiana, the judge can order that spouse to pay the other spouse money in order to make up the discrepancy.
Louisiana divorce laws do not favor either spouse over the other in terms of awarding the family home in a divorce. Instead, a court will consider the circumstances of the couple, including whether or not there are minor children, whether there is an outstanding mortgage, and each spouse’s respective ability to continue paying that mortgage.
If one spouse keeps the house, the judge will typically award different assets of equal value from the marital estate.
Note that separate from who gets the house once a Louisiana divorce is finalized, a spouse could petition the court for the exclusive use of the family house while the divorce is pending. The court will consider the relative economic status of each spouse and the needs of any children to determine what is in the best interest of the family.
So, is Louisiana a community property state? Yes, which means that property owned during a marriage is presumed to be community property.
Louisiana community property law calls for a 50/50 split of the net value of the marital estate in a divorce, with each spouse keeping their separate property. And if the court is not able to partition property such that each spouse gets their fair share, the judge may order an equalizing payment between the spouses to make up for any difference.
If you have questions about divorce in Louisiana, consider speaking with an experienced divorce lawyer today.