Separate property is generally property that a spouse acquired before marriage—or acquired by gift or inheritance during marriage—and is not subject to division upon divorce. In contrast, marital property is generally property that is acquired during marriage, is jointly owned by the spouses, and is subject to division upon divorce—whether the spouses reside in (1) an equitable distribution or common law property state or (2) in a community property state.

Community property states generally include Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In these states, divorce courts generally start with the presumption that the marital property is owned equally by the spouses and will be divided equally upon divorce.

In other states—so-called equitable distribution or common law property states—the divorce court attempts to divide the spouses’ assets equitably (fairly) and may consider a spouse’s separate property in deciding to make an unequal division of the spouses’ marital property. In practice, the difference between the division of assets in community property states and in equitable distribution states is sometimes not as great as it may seem, as the court in a community property state may have the discretion to divide the spouses’ community property on a 60-40, 70-30, or other unequal basis.

In Alaska, which is unique among community property states, spouses have the option to classify their property as community property by entering into a community property agreement or trust. This means that unless such an agreement or trust is created, the default system is equitable distribution. Separate property, which includes assets acquired before marriage or received as a gift or inheritance during the marriage, is not subject to division upon divorce. Marital property, acquired during the marriage, is subject to division. In community property states, there is a presumption of equal ownership of marital property by the spouses, leading to an equal division upon divorce. However, Alaska courts may divide community property unequally if circumstances warrant. In equitable distribution states, courts divide marital property fairly, but not necessarily equally, and may consider separate property in making an unequal division. Despite the theoretical differences, the actual division of assets in both types of states may not be significantly different, as courts have discretion in dividing property.