Louisiana Community Property Law Can Be Wacky
Louisiana is different. Most people know this. I live in a city like no other. New Orleans is a place where you can buy an alcoholic daiquiri in a drive-thru, where the downtown area is shut down and blocked off at noon on a Friday so a parade can pass or where it’s totally accepted to wear black and gold nailpolish or facepaint to work on Fridays of Saints game weekends. People work hard and play hard. It is certainly a fun place to live. I was born and raised in New Orleans and now that I’ve finally moved back after living in Mississippi for nearly ten years, I’m never leaving again.J
As fun and wonderful of a place New Orleans is, there are definitely some laws in Louisiana, which are not as attractive to me. You may know that Louisiana is a community property state, meaning that during your marriage, you and your spouse accumulate what is referred to as your “community". From the date of your marriage through the date the Petition for Divorce was filed is the “community". The community is subject to split equally between the parties, so you and your spouse will each receive ½ of the community assets and be responsible for ½ of the community debts accumulated during the marriage. There is not much room for negotiation on this. If it is community property, then it is divided equally between the two spouses.
Now, there are exceptions to what is classified as community. Generally speaking, Louisiana recognizes that some assets may be separate property, such as gifts or inheritance that you received during the community. Separate assets will not be subject to split and are considered your separate property. Keep in mind, though, that there are other issues to consider with separate property. For example, income from separate assets is considered community. The details of distinguishing separate from community is too complicated to delve into right now and not the forefront point of today’s post. I will save that issue for another day down the road.
While there is some gray area on what is considered community and what is considered separate property, the law in Louisiana is pretty black and white on when the community begins to accumulate and when the community is terminated. The community consists of all assets and all debts from the date of the marriage through the date of the filing of the Petition for Divorce. The law is clear. Physical separation does not play a role in the division of the property. I have come across a couple of cases where the parties were separated for many, many years (I’m talking 7 years or more) but they never bothered to file for divorce. They just went their separate ways and lived as if they were divorced.
Now, years later, one party decides for whatever reason, that it is time to actually obtain a Judgment of Divorce. Well, guess what? All of the money put into his retirement account, all of the furniture he bought, his savings, his stocks and bonds, etc. that he accumulated after the physical separation, but before the Petition for Divorce was filed….all of that is considered “community" and you know what that means… he’s going to have to give her 50% of it. Sounds so unfair, right? But, it’s the law.
There are so many things I love about living in New Orleans and the great state of Louisiana, but community property is definitely not one of them! Coming from Mississippi, where the law is equitable distribution, the court played a bigger role and was graced with a vast amount of discretion on how to divide the property between the divorcing parties. In my mind, the Mississippi judges (chancellors, there) had the ability to make the division fair for both sides, taking into consideration the circumstances for each individual case. What a rude awakening moving to Louisiana! Very little discretion is given to the judges when determining community property division because the law is very clear – community property is to be divided 50/50 between the parties and community property terminates on the date the Petition for Divorce is filed – no matter how long you have actually been physically separated.