Introduction to the Property Partition
If spouses cannot agree on who gets property or who will pay the debts following a divorce, they can petition the Court to partition community property. The Court will then determine whether the property is community or separate, or both, and divide the community property among the spouses in a partition proceeding. The Court can also resolve any claims of the spouses arising from the marriage.
Property Classification as Community or Separate
The Court will determine whether each spouse’s property is “community” or separate property as part of a partition. The Court will determine the classification based on the date and manner in which the property was acquired or purchased.
Items in the possession of one spouse during the existence or after termination of the matrimonial relationship are presumed to be community property. However, either spouse can prove that the item is their separate property. The Court will determine if the property in dispute is community property of the couple or the separate property of one of the spouse.
Dividing Community Property and Debts
Louisiana Revised Statute 9:2801 outlines the rules that the Court uses in a division of community property.
Assessing Assets, Determining Liabilities, and Adjudicating Claims
First, the Court will determine the value of assets at the time the trial begins. This means that property value is not determined based on what the spouses spent at the time it was purchased. Instead, the Court will accept evidence provided by the parties to prove the property’s value at the time the partition trial begins. Spouses may hire experts to value real property such as houses and land, while others will appraise valuable jewelry, art, and other home furnishings.
The Court will also determine liabilities. These are community debts that were incurred in the marriage for the mutual benefit of both spouses or by one spouse for the benefit of the other spouse.
The Court will determine the parties’ claims arising from matrimonial arrangements. A spouse who has contributed to the education or training of another spouse in the community can claim reimbursement. An eligible spouse can also claim reimbursement if the spouse used his or her separate property to pay community debts, or to pay their ordinary and customary expenses of the marriage.
Division and Allocation of Assets and Liabilities
Each Spouse Gets the Equal Net Value
The Court will split all community assets and liabilities, and then assign them to each spouse. Each spouse will receive property with an equal net worth. The net value is calculated by subtracting one spouse’s debt from the value of the property that was assigned to them. Each spouse will be entitled to property with an equal net worth.
In order to achieve an equal net worth for each spouse, the Court can divide assets or liabilities equally or unequally, or it may give it all to one spouse. This means that money or property may not be split 50/50. A Court can assign property with a greater value to one spouse who has been assigned more debt. The Court will take into consideration the source and nature of the assets or liabilities, as well as the economic situation of each spouse and any other relevant circumstances.
Sometimes, the Court can’t create an equal net distribution. The Court may order an “equalizing” payment if the distribution of assets and liabilities results in an unjust net distribution. The Court may order an “equalizing payment” which can be either cash or deferred payments. It will be secured or unsecured and subject to the Court’s conditions. The Court can order the execution of mortgages or other documents or may impose a lien or mortgage on any community or separate property, immovable or movable, as security.
Sometimes an asset’s monetary worth is lower than its sentimental or emotional value to the spouses. This asset may not be divided equally or fairly by the Court. The Court can use other methods if the whole or part of an asset is not fair to one party. The Court can order parties to draw lots or permit them to bid for the asset. The Court can order the private sale of the asset under such conditions and terms as it deems appropriate, including the minimum price, terms of sale, execution of realtor listing agreements, and the time the asset will be available for private sale.
The Court can only order a “partition through licitation” or public sale if an asset is not allocated to a party or assigned by drawing of lots. The Court can fix minimum bids or other conditions that the property will be offered for public sale. The Court must state the reasons for such a partition.
Responsibilities for the Payment of Debts
As between spouses, the allocation of liability is binding on the spouse to extinguish it. The rights of creditors do not change by the allocation. When a Court assigns a spouse a debt, that spouse must pay the debt until it is satisfied. Although the other spouse is not required to pay the debt until it is satisfied, if the spouse who was allocated the debt fails to make payment, the other spouse may still have to pay the creditor. If this happens, the spouse obligated by the debt to pay will be required to reimburse the spouse responsible for the debt.
Our lawyers at Bowie & Beresko, APLC have extensive experience in complex property divisions. Established in 1989, Bowie & Beresko APLC has turned into a top law firm in the Shreveport, LA area. Contact us today at 318-221-0600 for a free consultation