Divorce is a major legal and emotional process that affects many areas of a person’s life, especially when it comes to splitting up assets and debt.
In New Mexico, which is a community property state, property division during a divorce is a process that has many rules. In this article we will discuss how division of community property works to New Mexico divorce and what people going through a divorce need to know.
Community Property Explained
Under community property laws, any assets (and debts) either spouse acquires during their marriage are deemed co-owned by both spouses.
This includes wages earned by either spouse, property purchased with those wages during the marriage, and debt incurred during the marriage. Unless an asset is classified as separate property (such as gifts, inheritance or personal injury awards given to one spouse), it is treated as community property.
Community Property Division
In New Mexico, community property is divided equally unless otherwise agreed, in a divorce. The aim is to achieve what will be a “just and right” division, which means that the court will try to equitably allot property and debts rather than equally. Some factors that could determine this distribution are:
- Financial situation for both spouses.
- The talents and capacities of either spouse to earn.
- The duration of the marriage.
- Any agreements (such as prenuptial agreements) entered into prior to the marriage.
Evaluating Property
Valuing the assets is a crucial step in the process of dividing community property. This can be contentious, especially if either party has significant or complicated assets, like businesses, stock options or extensive real estate holdings. To properly determine the value of these assets, it is often necessary to hire an appraiser or accountant.
Debts
Debts are handled just as assets are. Debts incurred during the marriage are usually the responsibility of both partners. In simple terms, debts are obligations that you owe under a loan agreement. Generally, each spouse is responsible for half of the debt unless it can be shown that the debt solely benefited one spouse.
Disputes and Negotiations
Much of the activity involves disputes regarding what is community property and what is separate property. In some cases, property that would otherwise be separate becomes mingled with community property and thus must be divided upon divorce. This calls for legal representation, so it is important to find a competent lawyer with expertise in this field.
In practical terms, if couples are able to reach consensus on how to share their property and debts, they can submit their deal to a court for approval, thus making the process less contentious and having fewer lawyers involved. But if they can’t come to an agreement, the court will intervene and make a decision for them based on community property laws.
Final Thoughts
New Mexico uses community property law when deciding how to handle assets and debt in the event of Divorce. Those going through a marital separation should know these principles and prepare accordingly.
To navigate this challenge in the state of New Mexico, speaking to an experienced divorce attorney who is well versed with the community property laws and complexities of the same is highly advisable as they can help you protect your rights and better understand the closing process.
If you are going through a divorce in New Mexico, call The Law Office of Anthony Griego at 505-417-2729 or fill out the Schedule Appointment form on their website for personalized legal advice for your specific case.
