As you consider your divorce, you likely have a lot of questions and concerns, particularly when it comes to how assets and debts will be split between you and your spouse. New Mexico is what is known as a “community property” state, and this will guide how your property and debts are divided.
An attorney experienced in divorce law in Santa Fe will be able to discuss just how your assets and debts may be approached in your divorce. In the meantime, you can learn more about this standard and some of its fundamental concepts.
What, Exactly, Is Community Property?
“Community property” is an umbrella term that covers all of the debts you and your spouse incurred and all of the property you both acquired during the marriage, with some exceptions. Common exceptions include assets or debts that existed before the marriage; gifts received during the marriage; any inheritance received during the marriage; and anything received or incurred after the divorce petition was filed, with some exceptions. These items are known as separate property or debts, and they belong to only one spouse.
Keep in mind that in New Mexico, gambling debt belongs solely to the spouse who incurred it, even if that happened during the marriage. Student loans may also be handled differently, so be sure to talk to your attorney if you or your spouse has such a loan.
Once all the separately held debts and assets are identified, whatever is left becomes what is known as the marital (or community) estate, which is usually divided equally between the spouses.
It is important to note that New Mexico does not recognize common law marriage, so assets and debts from the period you and your spouse may have lived together before your marriage may not count as marital property. Property and debts that are part of the marital estate will be those acquired after the date of your legal marriage. If you are not sure about when a particular asset was acquired or a debt incurred, be sure to mention this to your attorney.
What if There Are Hidden Debts or Assets?
There are no exceptions for debts or assets that were never disclosed to one spouse. So, even if your spouse ran up a credit card during the marriage and you never knew they had it, that debt may become part of the community property in your divorce. If your spouse intentionally wasted marital assets, however, you may be able to receive some compensation for that in your settlement.
What Are Some Common Property Issues?
One thing that can complicate a marital estate involves the identification of property as community or separate. Sometimes, an asset or debt can start out as separate property but become community because of actions taken with it. If, for example, you had a credit card with $5,000 on it before you got married but it was refinanced or consolidated with community debt, it may end up being community debt as a result. Another common scenario is where an asset was purchased during the marriage, thus hypothetically rendering it a community asset, however the purchase was by funds that were one party’s separate funds, such as an inheritance. The process for determining the proper division of such a debt or assets is complicated and will require your attorney’s review and advice.
It is very possible you have assets or debts you believe are separate but may actually be community or vice versa. It is very common for parties to believe that since they owned something in their own name or solely utilized something during the marriage, it should be solely theirs. Unfortunately, the law in New Mexico does not provide for such distinctions.
Since this area of your divorce is extremely important as it will set you up financially for your post-divorce life and can be quite complex, it is wise to prepare a full list of all debts and assets you and your spouse have for your attorney. With this complete information, your attorney can work to identify which items belong to just you and your spouse and which are subject to division in the divorce. This will ensure your divorce proceeds as fairly as possible.