Community Property Law and Its Implications on Divorce

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Date Submitted: 04/19/2013 11:41 AM

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Taha Malik


Community property law and its implications on divorce settlements

The trivial puzzle

As the wedding wow states, marriage is until death. This is true in an ideal world but the sad reality is that in North America, over 30% over marriages end up in a divorce. Apart from the emotional destruction, a divorce results in a settlement agreement which details how the martial property is to be distributed among each party. In Canada and most U.S states, the law of community property is applied. Community property law dictates that all property of a married person is classifies either as community property (owned equally by both spouses) or separate property of one spouse. At divorce, community property is divided equally between spouses, while each spouse keeps his or her separate property. The question that comes to mind is: Why is the marital property split evenly between spouses in divorce settlement cases and why is it not distributed according to equitable principles that give due share to each spouse based on their marital inputs during the marriage?

A 50/50 distribution appears unfair because contributions to common property happen at different times and in different proportions during marriage. Effort and money spent to acquire common property is not always equal and therefore a 50/50 distribution results in a loss for the party that has contributed more than the other party during the course of the marriage and likewise, the party with smaller contribution has incentive to seek divorce and end the marriage. Although individuals can designate certain contributions as ‘private property’ during the course of the marriage and prevent it from being distributed evenly upon divorce , such practices raise issue of trust and mutual bonding and to some extent reveal the level of sincerity and future intentions to the other party.

In reality, most divorce settlements are settled according to the community property principle. Despite the...