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 New Mexico, which is a community property state, the law presumes that all property acquired during the marriage is owned equally by both spouses and should be divided equally upon divorce. This includes income, real estate, and personal property that either spouse has acquired while married, regardless of whose name is on the title. Separate property, on the other hand, includes assets one spouse owned before the marriage or received as a gift or inheritance during the marriage. Separate property is not subject to division during a divorce. However, it's important to note that the distinction between separate and community property can become blurred, for example, when separate property is commingled with marital property. In such cases, it may be treated as community property. While the starting point for division is an equal split, courts in New Mexico have the discretion to divide community property in a manner that is just and right, which may result in an unequal distribution based on factors such as the duration of the marriage, the spouses' future earning capacities, and the needs of each spouse.