Classifying Property: Community Property Versus Separate Property

Regarding property ownership in Louisiana, it's important to understand the difference between community property and separate property. Community property refers to assets and property owned jointly by spouses in a marriage, while separate property belongs exclusively to one spouse.

This provides an overview of property classification in Louisiana, including exceptions to the general rule that property owned by a married person is community property, how marriage contracts can affect property classification, and how debts are handled in the context of property ownership.

What You Need To Know

Community property in Louisiana refers to assets and property owned jointly by both spouses in a marriage. This includes property acquired during the marriage through the work or effort of either spouse, such as work wages, as well as any property acquired during the marriage that is not specifically classified as separate property. In Louisiana, there is a presumption that property owned by a married person is classified as community property, with some exceptions. Gifts or inheritances that were specifically given to only one spouse are considered separate property.

Separate property in Louisiana refers to assets and property that belong exclusively to one spouse. This includes property that was acquired before the marriage, as well as property acquired during the marriage under specific circumstances, such as through a prenuptial or post-nuptial separate property agreement that is judicially approved. Additionally, property acquired by a spouse with separate money, through inheritance or donation specifically given to one spouse, or as a result of a voluntary partition of the married couple's community property during the community property regime, is considered separate property in Louisiana.

In Louisiana, property is classified as community or separate based on specific criteria. Community property includes assets acquired during the marriage through the work or effort of either spouse, with the presumption that property owned by a married person is classified as community property. However, there are exceptions to this general rule, such as gifts or inheritances specifically given to only one spouse, which are considered separate property. Additionally, property acquired before the marriage or under certain agreements, like prenuptial or post-nuptial separate property agreements that are judicially approved, is classified as separate property in Louisiana.

What are the exceptions to the presumption that property owned by a married person is community property?

The exceptions to the presumption that property owned by a married person is community property in Louisiana include:

1. Gifts or inheritances that were specifically given to only one spouse are considered separate property.
2. Property acquired before the marriage is classified as separate property.
3. Property acquired during the marriage under specific circumstances, such as through a prenuptial or post-nuptial separate property agreement that is judicially approved, is also considered separate property.

These exceptions allow for the classification of certain assets as separate property, distinct from the general presumption of community property ownership in Louisiana.

Yes, prenuptial and matrimonial agreements can change the classification of property in Louisiana. Specifically, property acquired during the marriage can be classified as separate property if there is a prenuptial agreement or if the asset was specifically classified as separate property in a matrimonial agreement that is judicially approved. These agreements provide a legal mechanism for spouses to alter the classification of property, allowing for assets to be designated as separate rather than community property in Louisiana.

In Louisiana, both spouses can control community property, subject to certain limitations. This is known as "equal management of community property." Each spouse acting alone may manage, control, or dispose of community property unless otherwise provided by law. However, both spouses must concur in the sale, mortgage, or lease of community real estate, furniture, or furnishings in the family home, all or substantially all of the assets of a community enterprise, and motor vehicles titled in the names of both spouses jointly. Additionally, the donation of community property to a third person requires the concurrence of both spouses, although one spouse may make a usual or customary gift of a value commensurate with the economic positions of the spouses at the time of the donation.

In Louisiana, the liability for debts incurred during the marriage depends on the classification of the debt and the property regime in place:

1. If spouses are separate in property, the spouse incurring the debt is liable, and the non-incurring spouse is only liable for the benefit received from the debt.
2. Under a community property regime, a debt incurred by a spouse is either a community debt or a separate debt. If the debt is incurred for the common interest of the spouses or for the interest of the other spouse, it is considered a community debt.
3. A separate debt of a spouse can be satisfied from that spouse’s separate property and the community property.
4. A community debt can be satisfied from the community property and from the separate property of the spouse who incurred the debt. If both spouses received a benefit from the debt, it can be collected from the separate property of both spouses as well as the community property

In Louisiana, the legal regime of community property is terminated by the death or judgment of declaration of death of a spouse, judgment finding the marriage was in itself null, judgment of divorce, judgment of separation of property, or matrimonial agreement that terminates the community. After termination of the legal regime, spouses are separate in property, and, generally, all wage income received belongs to the earning spouse exclusively. Generally, after the termination of the community property regime, a spouse may have a claim against the other spouse for reimbursement of one-half of the payments made on the community debts. Spouses whose marriage terminates in divorce may have the judge judicially partition the community assets and debts if they are unable to agree.

Yes, spouses can change the classification of property in Louisiana through various means:

1. Donation by a spouse to the other spouse of his/her interest in a community asset converts the entire ownership of the asset into the separate property of the recipient spouse.
2. Prenuptial and matrimonial agreements may change the classification of community property. Property acquired during the marriage can be classified as separate property if there is a prenuptial agreement or if the asset was specifically classified as separate property in a matrimonial agreement that is judicially approved.

These mechanisms provide avenues for spouses to alter the classification of property, allowing for assets to be designated as separate rather than community property in Louisiana.

Some myths and misunderstandings about separate and community property in Louisiana include:

1. The belief that how property is "titled" (i.e., in the name of the husband or wife) affects its classification as separate or community property. In reality, the title alone does not determine the classification, although declarations made by a spouse in financial documents or acts of sale can have legal implications.
2. The misconception that marriage alone automatically converts the existing separate property of the spouses into community property. Separate property remains separate unless specific actions or agreements change its classification.
3. The misunderstanding that separate property brought into the marriage automatically becomes community property through commingling or replacement. While commingling and other actions can impact the classification of property, separate property does not automatically become community property through these processes.
4. The belief that upon termination of marriage, separate property funds used for the benefit of the community are reimbursed to the spouse whose separate property was used in the amount of 100%. In reality, reimbursement is typically for 50% of the amount used.
5. The misconception that assets are valued at the time of divorce. In Louisiana, assets are valued at the time of the community property partition, not at the time of divorce.

Related Resources

• Dividing Money And Property After A Divorce
• Dying Without A Will - Intestate Successions
• Heirship In Successions
• Navigating A Louisiana General Property Succession
• Understanding Property Under Louisiana Law