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Community Property ā¢ Equal Division of Assets
CPROP#009
Legal Definition
There may be an unequal division of community property assets: (1) where one spouse misappropriates community property, (2) where one spouse has incurred educational debts, (3) where one spouse incurred tort liability not for the benefit of the community, (4) where one spouse secures a personal injury award, and (5) in the case of negative community, where community liabilities exceed assets.
Plain English Explanation
Even though states generally want to split everything 50/50 when a couple divorces, life isn't always fair or equal. There are several situations where a court may want to unequally divide the assets:
(1) Misappropriation of Community Property: Suppose Bob secretly took $50,000 from their joint savings account and spent it on gambling. This is called misappropriation, where one person wrongly uses shared money for their own benefit. In this case, the court might decide that Amy should get more of the remaining assets to make up for the money Bob wasted. So, instead of splitting everything 50/50, Amy could get a bigger share because of Bobās actions.
(2) Educational Debts: Now, imagine that during the marriage, Bob went to law school and took out $100,000 in student loans. This debt was only for Bobās benefitāheās the one who will be a lawyer, not Amy. The court might decide that Bob should be the one responsible for paying back those loans since they didnāt benefit Amy. This could lead to an unequal division of the other assets to make things fair.
(3) Tort Liability Not for the Benefit of the Community: What if Bob got into a car accident and was sued, but the accident happened while he was on a personal trip that didnāt benefit the family at all? This type of debt, called tort liability, is something the court might assign only to Bob. To be fair, the court could give Amy a larger share of the community property, so Amy doesnāt have to deal with the consequences of Bobās actions.
(4) Personal Injury Awards: Letās say Bob was injured at work and received a $200,000 settlement for his pain and suffering. This money is meant to compensate Bob personally, not the family. The court might decide that this settlement should go entirely to Bob, without dividing it between Bob and Amy. This results in an unequal division, but itās fair because the money was specifically for Bobās injury.
(5) Negative Community: Finally, consider a situation where Bob and Amyās debts are greater than their assets. This is called a negative community. If the couple owes more money than they have, the court might divide the remaining assets and debts unequally to reflect each personās responsibility for those debts. For example, if Bob was the one who took on most of the debt, he might end up with fewer assets or more debt than Amy.
(1) Misappropriation of Community Property: Suppose Bob secretly took $50,000 from their joint savings account and spent it on gambling. This is called misappropriation, where one person wrongly uses shared money for their own benefit. In this case, the court might decide that Amy should get more of the remaining assets to make up for the money Bob wasted. So, instead of splitting everything 50/50, Amy could get a bigger share because of Bobās actions.
(2) Educational Debts: Now, imagine that during the marriage, Bob went to law school and took out $100,000 in student loans. This debt was only for Bobās benefitāheās the one who will be a lawyer, not Amy. The court might decide that Bob should be the one responsible for paying back those loans since they didnāt benefit Amy. This could lead to an unequal division of the other assets to make things fair.
(3) Tort Liability Not for the Benefit of the Community: What if Bob got into a car accident and was sued, but the accident happened while he was on a personal trip that didnāt benefit the family at all? This type of debt, called tort liability, is something the court might assign only to Bob. To be fair, the court could give Amy a larger share of the community property, so Amy doesnāt have to deal with the consequences of Bobās actions.
(4) Personal Injury Awards: Letās say Bob was injured at work and received a $200,000 settlement for his pain and suffering. This money is meant to compensate Bob personally, not the family. The court might decide that this settlement should go entirely to Bob, without dividing it between Bob and Amy. This results in an unequal division, but itās fair because the money was specifically for Bobās injury.
(5) Negative Community: Finally, consider a situation where Bob and Amyās debts are greater than their assets. This is called a negative community. If the couple owes more money than they have, the court might divide the remaining assets and debts unequally to reflect each personās responsibility for those debts. For example, if Bob was the one who took on most of the debt, he might end up with fewer assets or more debt than Amy.
Hypothetical
Hypo 1: Bob and Amy are getting a divorce, and it comes out that Bob secretly spent $50,000 of their shared savings on gambling. Result: The court may decide to give Amy a larger share of the remaining assets to make up for the money Bob misappropriated. This would be an unequal division because Bobās actions unfairly affected their community property.
Hypo 2: Bob went to law school during the marriage and accumulated $100,000 in student loans. However, the degree only benefits Bob, and Amy didn't gain anything from it except gray hair from putting up with Bob's complaining. Result: The court might order Bob to take on the full responsibility of paying back the student loans, rather than splitting the debt equally, leading to an unequal division of assets.
Hypo 3: Bob was involved in a car accident and was sued for damages. The accident happened while Bob was on a personal trip, and the lawsuit had nothing to do with benefiting the family. Result: The court could assign the liability solely to Bob and adjust the division of property so that Amy doesnāt have to bear any part of the debt from the lawsuit, resulting in an unequal division.
Hypo 4: Bob received a personal injury settlement of $200,000 after being injured at work. The injury caused him pain and suffering, and the money was meant to compensate him personally. Result: The court may decide that the personal injury award should go entirely to Bob, without dividing it between Bob and Amy, leading to an unequal division of their assets.
Hypo 2: Bob went to law school during the marriage and accumulated $100,000 in student loans. However, the degree only benefits Bob, and Amy didn't gain anything from it except gray hair from putting up with Bob's complaining. Result: The court might order Bob to take on the full responsibility of paying back the student loans, rather than splitting the debt equally, leading to an unequal division of assets.
Hypo 3: Bob was involved in a car accident and was sued for damages. The accident happened while Bob was on a personal trip, and the lawsuit had nothing to do with benefiting the family. Result: The court could assign the liability solely to Bob and adjust the division of property so that Amy doesnāt have to bear any part of the debt from the lawsuit, resulting in an unequal division.
Hypo 4: Bob received a personal injury settlement of $200,000 after being injured at work. The injury caused him pain and suffering, and the money was meant to compensate him personally. Result: The court may decide that the personal injury award should go entirely to Bob, without dividing it between Bob and Amy, leading to an unequal division of their assets.
