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Is New Mexico a community property state?

Wondering whether New Mexico is a community property state? Read on for the answer and everything you need to know about community property in NM.

evident Editorial Team
November 27, 2023
Sunset on mountain near Santa Fe

Yes, New Mexico is a community property state, along with eight other states that are mostly in the Southwest. 

This means that most property a married couple in New Mexico acquires during the course of their marriage is community property, which is owned equally by both spouses. 

Community property states handle property division in the event of divorce differently from most states, which are equitable distribution states. And state laws vary even between community property states, including one aspect of how New Mexico treats community debts. 

This article will cover everything you need to know about community property laws in New Mexico and how property gets divided if a couple divorces.

Key Takeaways

Understanding Community Property

In terms of marital property and finances, there are two primary ways that states handle property ownership for married couples and property division in the event of a divorce:

  • Community property: the default assumption is that all property and financial assets acquired by either spouse during the marriage--that is not separate property--are owned equally by both spouses.
  • Equitable distribution: these states presume that each spouse’s property is their own, separate property unless they have decided to share the property.

The other community property states are Arizona, California, Idaho, Louisiana, Nevada, Texas, Washington, and Wisconsin. 

Community property vs. Separate property

A crucial factor in how property gets divided in community property states is the distinction between separate and community property.

As mentioned, most property (and debts) acquired during a marriage are considered community property. Separate property, meanwhile, is treated differently.

So what is considered separate property? Typically, separate property is:

  • property owned or acquired by the spouse prior to the marriage
  • gifts or inheritances a spouse receives during the marriage
  • Anything designated as separate property by written agreement (such as in a prenuptial agreement)

What is separate property in New Mexico?

Separate property in New Mexico are the same things noted above, which include:

  • A spouse's separate property entering the marriage; 
  • Property acquired by a spouse after a court enters a decree of legal separation or dissolution of marriage
  • Any gifts or inheritances a spouse acquires during the marriage; and 
  • Anything designated separate property by written agreement
  • The profits or rents from separate property (such as rental income from an apartment acquired before the marriage)

What is considered community property in New Mexico?

Community property in New Mexico is basically everything else a married couple acquires during their marriage. 

New Mexico law defines community property as “property acquired by either or both spouses during marriage which is not separate property.”

Indeed, New Mexico law presumes that property acquired during the marriage is community property, and a spouse must prove by a preponderance of the evidence that something is separate property. 

Examples of community property assets in New Mexico

New Mexico community property can include real or personal property, such as:

  • A family home
  • Vehicles such as cars or boats
  • Furniture, appliances, and other household items
  • Bank accounts, stocks, and other investments
  • Personal property such as jewelry or clothing

But remember that the crucial factor for all these types of property is that they be acquired during the marriage.

Community Debts in New Mexico

During a New Mexico divorce, debts and liabilities must also be divided. Similar to marital assets, New Mexico community property law considers debts acquired during marriage to be shared equally by both spouses, with limited exception.

An exception, which is different from other community property states, is gambling debt. If a spouse incurs gambling debts during marriage, that is considered their sole responsibility and is treated as separate debt. 

New Mexico law also states that "unreasonable debt" is not treated as community debt. Unreasonable debt is defined as a debt a spouse incurred while the couple was living apart and which did not benefit the other spouse or any of the couple's dependents.

Otherwise, debts are shared equally by spouses. Examples of marital debts in New Mexico include:

  • Mortgages on real estate, such as a family home
  • Loans for cars or other vehicles
  • Credit card debt

Again, though, remember that the key factor is whether the debts were created during the marriage. Both parties are responsible for debts incurred during the marriage, regardless of whose name is on the title or note.

How is community property divided in New Mexico?

In a New Mexico divorce, community property is divided equally between spouses. Unlike equitable distribution states, which would aim for a “fair” division of property, New Mexico community property law favors a 50/50 split of community property and debts.

Separate property, meanwhile, remains the sole and separate property of each spouse. So property acquired before marriage remains separate property, as does any gifts or inheritances a spouse receives during the marriage.

(Note that while a judge could not divide separate property between spouses, they could set it aside or account for it when determining alimony). 

Reaching your own agreement

Hands shaking

Keep in mind that you and your spouse could agree to a different division of property. 

As with many issues in Family Law, the best outcomes often come from parties working through their issues themselves. And if you are able to, a judge will typically approve the property division that you propose. 

Reaching your own agreement can save you money and headache, but it will depend on your particular circumstances and whether you and your ex-spouse can get on the same page.

FAQs about community property in New Mexico

What is quasi-community property in New Mexico?

Quasi-community property is property acquired by a spouse while they were living somewhere else that would have been community property if it had been acquired while living in New Mexico. Additionally, anything acquired in exchange for quasi-community property is also considered community property.

New Mexico law treated quasi-community property as community property so long as both spouses reside in New Mexico at the time of the divorce.

Is an inheritance community property in New Mexico?

An inheritance by one spouse is not considered community property in New Mexico.

But an inheritance could become community property if it is commingled with other community property assets. For instance, if a spouse deposited funds they inherited into the couple’s joint bank account, the inheritance might lose its status as separate property. 

The final word on community property in New Mexico

So, is New Mexico a community property state? Yes, which means that most property acquired during a marriage is presumed to be owned equally by both spouses.

In a New Mexico divorce, community property is split equally between spouses, while separate property remains the sole and separate property of each spouse. (And remember that gifts, inheritances, and property covered by written agreements are separate property even if they are acquired during marriage. 

If you have questions about community property in New Mexico, it may be worth speaking with an experienced divorce attorney. And if you do, here are the key questions to ask when you first meet.