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Louisiana Divorce: 3 Top Tips on Property Division


What is the marital property division in Louisiana?

Is Louisiana considered a Community Property State?

Yes, Louisiana is among the few states that have community property laws. While equitable distribution principles are generally accepted in most states, Louisiana is not one of them. Louisiana’s community property laws aim to equalize property between a couple in divorce proceedings.

Community Property and Separate Property

Louisiana law holds that all assets and liabilities a married couple acquired during marriage will be considered community property. Separate property refers to property one spouse owns before marriage. It can also be acquired by inheritance or gift during marriage or property covered under a prenuptial arrangement. A separate property claim should usually be supported by financial records and other documents.

Inadvertent or intentional commingling, which mixes separate and community property, can make an asset that was previously separate property become community property. If one spouse uses marital funds for renovations and maintenance of the house which is their separate property, the separate property can become marital property. If one spouse deposits money to a premarital bank account, it can become community property.

There are many assets that can be both community and separate. These include 401(k), retirement accounts that one spouse contributed to before and after the marriage or a business that one spouse started and maintained after marriage. It can be difficult to distinguish between community and separate property, especially if one spouse has a business or another asset to which the other spouse contributed labor or money during marriage.

With that, an experienced Louisiana attorney may be necessary if you have complex property issues. If spouses are unable to decide who owns what, a court will decide whether to classify the property as separate or community, and whether or not either spouse is entitled to be reimbursed certain expenses or contributions.  

Student Loans in Louisiana are Community Property?

It all depends on the date that the student loans were taken out. A simple “I do” can increase or decrease a spouse’s student loan obligation by up to 50 percent under Louisiana’s community property laws. A couple’s student loans are considered community property debt. Both spouses will have to repay the student loan obligation of their spouse. However, a spouse who borrows community funds to pay student loans that were taken out prior to marriage will pay the community estate back. Student loans taken out before marriage are considered separate debt.

How Do You Determine Property Values?

If they are unable to agree, the spouses or the court will assign a monetary value for each of their properties. Appraisals are a way for a couple to determine the worth of their real estate, including antiques and artwork. It can be difficult to assess retirement assets, original artwork, and business interests. This may make it necessary for an actuary, C.P.A. or business evaluator, or any other financial professional.

And How Will a Judge Divide Community Property in the State of Louisiana?  

Divorcing couples can either reach a settlement agreement to decide how to divide their assets and debts or leave the property division to a judge. Louisiana’s community property laws state that assets and debts acquired during a marriage are equal to each spouse. Each spouse must receive property with equal net worth if a judge divides community property.

A judge will take into account several factors when deciding whether an item of property or debt should be given to one spouse or another. These include the following:

  •  The source and nature of the property  
  •  Each spouse’s financial situation  
  •  Each spouse’s earning capacity and work history  
  •  Each spouse’s health, age, and physical condition  
  •  any alimony awards  
  •  Child custody refers to the care of children within the marital home.  
  •  Any other relevant factor.  

Regardless of whether you decide to handle your property division yourself or have it done for you by a court, there are three important steps that you must follow:

  •  You can identify the property as a community or separate 
  • Property valuations for community property items  
  •  Deciding how to divide the property.  

Louisiana Divorce Property Division and Settlement Agreements  

Spouses may divide assets by either dividing or assigning items to one another. This can be done by allowing one spouse to “buy out” the other spouse’s share of the asset or by selling assets and splitting the proceeds. They can also agree to keep their property together after a divorce. A settlement agreement can be reached by the couple on their own or through a mediator.   The more complex the agreement, the more there is a need to obtain legal counsel.

Both spouses must also make an assignment of all marital debts, including credit card and mortgage debts, as well as car loans and mortgages. Couples who are dividing debts must be aware that the separation agreement or divorce order does not bind creditors. Creditors may still try to collect community debts from one spouse. While it is not an attractive option for most people, because it requires a continuing relationship, some couples agree that they will keep the family home until their children graduate from school. Others might keep investment property in the hope that it will rise in value.

The court can place a lien on the spouse’s property to secure payment of a debt that has been assigned to one spouse. It is better to try and pay off all marital debts after the divorce is over. If you sell the family home, or one spouse is buying another, refinancing the house loan might be an option as well. 

We know that divorce is stressful enough without having to worry about complex legal matters. Even in divorces in which both parties agree on all the terms of separation, divorce lawyers are often needed to ensure all of the legal issues are wrapped up neatly. Contact our experienced team at Bowie & Beresko, APLC if you need help by calling us at 318-221-0600.


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