Community Property v. Equitable Division

There are two general systems followed in different jurisdictions in the United States for making a division of property –and equitable distribution and community property. Equitable distribution or division is the system followed in Alabama.

Equitable Distribution
Equitable distribution arises out of "common law" which is the system of court decision based law that was brought to the United States from England.  Over the years the courts have made decision after decision concerning the distribution or division of assets in divorces.  These decisions create precedents that are followed by the courts in later cases involving the same or similar issues.
In the equitable distribution system, the spouse whose name appears on an ownership document, like a title, deed, or registration, owns the property. Unlike in community property states, a spouse is not entitled to keep separate property with the caveat that some property owned by one spouse may not be subject to division as part of the divorce. Each spouse is entitled to receive a fair and equitable share of the property of the other spouse with the caveat mentioned above that is further discussed below. 

There is no set measure of what is fair and equitable. In Alabama, fault is considered by the Court in determining how to equitably divide the assets of the parties.  However, in some other equitable distribution states fault is not considered in property division. The factors most commonly considered in the division are the needs of the spouses, the length of the marriage, and the fairness of the division. In practice in some states, the average division is 2/3 to the higher wage earner and 1/3 to the other spouse, but there are no guarantees and in Alabama the court decisions vary widely from case to case. 

Although there is no statute in Alabama that defines "equitable distribution", there are two statutes that provide authority for the division of property in a divorce.  They are codified in Sections 30-2-51 and 52 of the Code of Alabama (1975).  The gist of these code sections is that the court can take into account the conduct of the parties and the comparative financial conditions of the parties in dividing the property in a divorce.  However, the Court cannot divide property inherited or received as a gift by one of the parties and cannot divide property obtained prior to the marriage of the parties.   In addition, the court cannot divide retirement accounts or pensions earned during the marriage by either party unless the parties have been married for at  least 10 years.

Community Property
Some states have what's called community property laws, which means generally that the money both spouses have earned during the marriage belongs to both of them, and the money that one spouse had before the marriage or from an inheritance or gift, belongs to that spouse as separate property. It isn't really that simple, of course. Increased equity in separate property may become community property in certain circumstances, and separate property that is commingled with community property often becomes community property. You should check your state law and get advice if there are questions.

The courts in community property states will usually divide the community property equally between the parties and give each spouse his or her separate property. This is not always the case, so if you have an unusual situation—where one spouse is disabled and unable to work, for example—you should seek advice in community property states to see if there are exceptions. This also doesn't mean that the court will divide every asset in half. The property is divided so that each spouse gets half of the total net value (fair market value of assets minus community debts).