Classification: Assets/Obligations- Community v. Separate

Classification of Assets and Obligations: Community and Separate

Community Property

All property not classified as separate property (see below) is community. Also property acquired through the effort, skill or industry of either spouse (wages, business income, etc.); things acquired with separate and community assets (it's comingling!); joint donations; fruits of community assets; and some damage awards.

Separate Property

Separate property includes anything acquired before the establishment of a community regime (before they got married); reinvestment of separate property; donations to one spouse individually; inherited property; most damage awards; and partitioned community assets.

Earnings of Each Spouse = Community

No matter how married couples organize their lives- one earning income, the other managing the home; both working for wages; or neither earning wages and both producing things- the basic rule is that they share equally in whatever each produces and accumulates.

Salaries and Fringe Benefits

Wages are the premier community asset. It is wages paid in return for work done during the existence of the community that are included, regardless of when the payment is actually made. All forms of payments in return for one's labor, such as bonuses, commissions, renewal commissions, and winnings of contract dispute settlements.

Partnership Income

Earnings from a partnership are considered community property as of the time the spouse's share of a partnership's profits is made available to him/her in such a manner that he/she may withdraw them from the partnership at any time and for any purpose even though they may not in fact be withdrawn.

Case Discussions

Ross v. Ross, 835 So.2d 817 (La. Ct. App. 1st Cir. 2004)
Lanza v. Lanza, 898 So.2d 280 (La. 2005)
Chance v. Chance, 694 So.2d 613 (La. Ct. App. 2d Cir. 1997)
Mestayer v. Williams, 569 So.2d 1102 (La. Ct. App. 3d Cir. 1990)
Hansel v. Holyfiend, 779 So.2d 939 (La. Ct. App. 4th Cir. 2000)
Melancon v. Melancon, 928 So.2d 10 (La. Ct. App. 1st Cir. 2005)
McMorris v. McMorris, 654 So.2d 742 (La. Ct. App. 1st Cir. 1995)
McClanahan v. McClanahan, 868 So.2d 844 (La. Ct. App. 5th Cir. 2004)

Fruits of Property

Fruits of community property are themselves community. Fruits of a spouse's separate property are also community. Fruits of separate property become community assets only so long as the community exists.

Can fruits of separate property be made separate?

Yes! The owner of separate property may execute and record in the public records a unilateral declaration of intent to reserve fruits of that property as separate property with no requirement for spousal consent (La. C.C. Art. 2339). The spouse completing this declaration must deliver a copy of it to the other spouse prior to filing in the court records. This is called a declaration of reservation of fruits. For immovable property (real estate), filing in the conveyance records of the parish in which the separate property is located is required. For movable property (equipment, etc.), filing is made in the conveyance records of the parish in which the declarant is domiciled.

Donation of Community Property

When a spouse donates his undivided interest in a community asset to the other spouse, the property becomes separate by virtue of the donation. In such cases, the fruits do not become a community, but, remain the separate assets of the owner of the principal thing even without the declaration. (This does not apply to donations of separate property to a spouse- a declaration is needed to reserve the fruits to the donee's separate estate.)