Louisiana is a community property state. This means that the court will generally divide marital property evenly between two spouses during a divorce.
The law designates certain assets as separate property belonging exclusively to one spouse. However, the distinction between separate and marital assets is not always clear-cut.
What is separate property?
Louisiana law generally defines separate property as:
- Property you owned before marriage
- Property you received in exchange for separate property
- Property you received as an inheritance or gift
- Funds from some legal settlements
Separate property also includes property you and your spouse have agreed to keep separate in a prenuptial agreement.
Is your retirement account separate property?
Some people assume that their retirement accounts are exclusively theirs. However, this is usually not the case. If you established the account during your marriage, the court will likely consider the entire account community property.
If the account existed before you married and you continued contributing to it throughout your marriage, then the account consists of both separate and community property. The balance in the account at the time of your marriage is still separate property, along with the interest you have earned from it, while the rest is community property. Separating the two can be challenging, however.
Do you have commingled assets?
Separate property remains separate until you commingle it with marital assets. Cash gifts and inheritances become marital assets if you invest them in a joint account. Real property, such as a house, becomes community property if you use community assets to make improvements or mortgage payments, even if your spouse’s name is not on the deed.
Property division is not always straightforward. Divorcing couples should be aware of the difference between separate and marital property and the ways that assets can become commingled.