Divorce often brings concerns about dividing property. This is especially true for couples with substantial assets, including businesses, real property or retirement savings.
The division of these assets can significantly impact each person’s financial future. Therefore, divorcing couples should understand how courts handle asset division in Louisiana.
How does Louisiana divide assets?
Since Louisiana follows the community property standard, the court tries to reach an overall 50/50 split of the value of shared assets. The judge will not necessarily divide each asset equally. Instead, the official will apportion these in a way that each receives an equal share. If that is not possible, the spouse who receives more usually has to give an equalizing payment to the other.
Instead of coldly seeking pure mathematical equality, the judge also considers the nature and source of each asset. A spouse’s circumstances and economic condition also play a role in who gets what.
For example, the spouse who gains physical custody of the children might be more likely to keep the family home to maintain stability. The judge typically awards a higher amount of different assets to the other party to compensate.
What makes something either community or separate property?
Community property is anything either spouse acquired during the marriage. This includes real estate, vehicles, bank accounts and business shares. It does not matter whose name is on the title; both spouses have equal claim to the item.
In contrast, anything that either spouse owned before the marriage may be separate property. The state also defines gifts, inheritances and any property that a spouse acquired using separate property as also being separate property. The court allows each spouse to retain their own separate property.
It typically takes explicit documentation to show an asset is separate property. Accounts and receipts are one way to prove this. Another option is that a couple could have drafted a prenuptial agreement detailing which items are separate property.
When can an asset’s status change?
Many factors can turn separate property into community property. For example, if a spouse’s separate property increases in value during the marriage due to both partners’ efforts, that increased value might be subject to division. This is common for homes and businesses.
Conversely, a married couple can create an agreement that converts specific community assets into separate property. However, such documents require the court’s approval to ensure it does not harm the interests of either party.
Various complicating factors go into property division, especially regarding large assets. It benefits those who are facing divorce to clearly define separate property and prepare for negotiations or judgments over the division of community property.