Matrimonial Agreement

What You Should Know About The Matrimonial Agreement

Louisiana Community Property Law and How its Effects Can Be Changed By Contract

Office of the Attorney General, State of Louisiana

In Louisiana, marriage affects the property rights of both men and women The rights of married people to buy, to sell, to control their property, to borrow money and to get credit, are regulated by law. "Property" includes almost everything: their house, land, bank accounts, stock, pension plans, wages and other income and things of value.

A married couple becomes subject to Louisiana's community property law automatically when they get married unless the man and the woman have made a special contract providing different rules to govern their property.

What is the Community Property System?

The community property system is a group of rules adopted by the Louisiana legislature which set up how a married couple will own and manage their property. The community property system also provides rules on who may incur debts, how those debts are to be paid, and how debts and assets are to be divided between the husband and wife when their community ends.

The foundation of the community property system is the rule that most property acquired by a married person during marriage is owned by the husband and wife together. During marriage, the husband owns a half interest and the wife owns a half interest. When the community ends, each gets one-half (1/2) of the community property that is left over after their bills have been paid. In this way, the law recognizes that both married people contribute to the marriage even if one of them earns no money or if one earns a lot less than the other.

At the end of a married couple's community property system, all things that the husband and the wife have are presumed to be community property. If an asset is really separate property, the husband or the wife who owns it must prove that it is his or her separate property. It may be hard to prove what things are separate if the husband and wife have mixed separate property and community property together.

The law calls this mixture of property "commingled" property.

When a married couple keep good records to show what money comes from what source, and they keep the separate money and community money separated, it is much easier to divide the property at the end.

Ways a Community Property System is Ended

A community property system can be ended by the death of either the husband or wife, by a divorce, by a court declared annulment of the marriage, by a contract between the husband and the wife, or by a court judgment setting up a separate property system instead of a community property system.

Two Kinds of Property: Community and Separate

Not all property owned by a husband and a wife is community property. Property owned by the man or the woman before their marriage, gifts made solely to the husband or the wife, and property inherited by the husband or the wife are the separate property of the one who received it. Separate property does not belong to both of them.

Community property includes the salaries of both husband and wife, things they buy with their community property money and the rent and other income earned from community property. Damages received by a husband or wife because of the loss of or damage to something that is community property are also classified as community property. Damages paid to a married person because of an injury, however, are usually the separate property of the injured spouse.

Income from separate property is usually community property under Louisiana law. If either the husband or the wife does not want to share the ownership of the income from separate property, however, that spouse can make a declaration before a Notary Public. After the document is filed in the parish conveyance records, the income from separate property will also be classified as separate property and the other spouse will not get an ownership interest.

Controlling the Use of Property

In the community property system, control of the property is different from ownership of the property. Even though the husband and wife both own community property, some of it can be sold by one of them alone, and some of it cannot be sold, mortgaged, or leased unless the husband and wife both agree. For example, both husband and wife are needed for the sale, mortgage or lease of real estate, of furniture located in their family home, of a community business, or of things registered in both of their names. Thus, even if a house or piece of land is listed in only one name, it still cannot be sold without the agreement of both spouses. Both spouses must also be in agreement before expensive gifts can be given.

In some instances, either the husband or the wife alone can sell, mortgage, or lease community property even if the other disagrees. For example, things that do not have a registered title can be sold by either one of them Things that are registered in one name alone can be sold by just the one in whose name it is registered. The husband or wife who runs a community business does not need the other spouse's consent to make everyday decisions to run the business Both must agree, however, before the business can be sold even if only one of them operates the community owned business.

Either married person is allowed to spend money that is community property without the consent of the other. A debt that either married person incurs either before the marriage or during the marriage can be paid from any community property money regardless of which one of them earned the money. A debt can also be paid from the separate property of the person who made the debt. Generally, the other spouse cannot be forced to use his or her separate money or property to pay a debt the other spouse made either before or during the marriage.

Either married person can use the total value of the community property to get unsecured credit. Both husband and wife must agree, however, before a house, land, or furnishings located in their family home can be mortgaged to secure a loan.

Marriage Contracts

A man and woman who plan to marry and live in Louisiana may not want to be governed by the community property system provided by Louisiana law. if they do not, they may make a written marriage contract before the wedding which sets out how they want their property owned and controlled. A marriage contract written before marriage does not need court approval. People who get married in another state and later move into Louisiana have one year after they move to Louisiana to make a marriage contract without a judge's approval before they fall under the community property system.

After a couple get married, or if one year has passed since the couple moved into Louisiana, they can still write a marriage contract for the first time or change one that already exists. If the contract written after the wedding sets up any rule different from the rules of the community property system set up by the law, however, the contract must have court approval. The judge will ask if both husband and wife understand what the contract means, and the judge will decide if it is in the best interest of the married couple to have the new contract. A married couple will not need court approval if their contract is just to change from a private system to the community property system set up by law.

All marriage contracts must be written and must be signed by a Notary Public and two witnesses, or it must be executed by private signature duly acknowledged. The latter phrase means that the contract must be signed by a person who later acknowledges to others that his or her signature Is valid. All marriage contracts must also be recorded in the conveyance records in the parish in which the couple is domiciled and in every parish in which they own real estate.

If you need help to understand what the community property system is all about, you should talk with a lawyer. if you think that you want to make a marriage contract, you also should talk with a lawyer who will tell you how the contract may change the taxes the you will pay on your property and how the contract may change the inheritance of your property.

Remember these things:

By law marriage changes your property rights.
The community property law will apply to you if you do not make a special marriage contract.
You may make this special contract before or after you are married, but some contracts written after marriage require a judge's approval to be legal.
If you were married outside Louisiana, moving here has changed your property rights. You have one year from the date you moved to make a marriage contract without a judge's approval.
The contract must be signed by a Notary Public and two witnesses or executed by private signature duly acknowledged.
You should see a lawyer so that you will know how the taxes on your property and the inheritance of your property may be changed by your marriage.
If you do not know a lawyer, the Lawyer Referral Service will help you find one. In large cities call your Legal Aid Bureau for assistance if you cannot afford a lawyer.