What is community property and what is separate property?
Understanding the difference between community property and separate property is important when navigating your divorce. Community property includes anything you and your spouse buy or earn during your marriage. It doesn’t matter whose name is on the title or who paid for it—you both own it equally.
On the other hand, separate property is anything you owned before you got married. Knowing these terms can help protect your assets if you ever go through a divorce.
Of course, there are some exceptions like gifts, inheritance, and agreements.
Exception 1: Gifts
Gifts received during marriage are considered separate property.
This means if your spouse gives you a gift, it remains yours alone, even if it's acquired while you’re married. This distinction can be particularly important when discussing asset division. Always ensure you keep documentation of the gift, as it can help clarify ownership if questions arise in the future.
Exception 2: Inheritance
Inheritance is another key exception to the community property rule.
Anything you receive as an inheritance is classified as separate property. This can include property left to you in a will, trusts, or even life insurance payouts. It's essential to understand how these assets are treated, as they can remain solely yours regardless of your marital status. Keeping clear records of your inheritance can also be beneficial for your financial planning.
Exception 3: Agreements on Separate Property
Sometimes, married couples may choose to designate certain assets as separate property through mutual agreement. This is common when one spouse buys a home during the marriage but wants to ensure it remains theirs due to factors like credit history or mortgage qualifications. Such agreements can clarify ownership and prevent potential disputes in the future.
If you have any questions regarding community property or separate property, and would like to reach out to Salcedo & Company to set up a consultation you can do so here.
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