New Mexico is a community property state. Community property is everything a husband and wife acquired during marriage. This typically includes all money earned, debts incurred and property acquired during the marriage. Under community property, spouses own – and owe – everything equally, regardless of who earns or spends the income.
Broadly, separate property in a community property state includes all property owned prior to marriage. Also, pre-marriage debts remain separate property. For example, educational loans acquired before a marriage wouldn’t become community property. Separate property can transform into community property. Aside from assets and debts, business interests and pensions, like 401k plans, also fall under community property. That means a soon-to-be former spouse is probably entitled to a share of your retirement.
In most divorces, community property is sold unless both parties can agree on property distribution. Such agreements typically only occur in uncontested divorces where couples decide on the divorce terms. In the event of death, community property laws can be vital in determining who receives property. In any community property state, a surviving spouse is considered to own any property owned jointly or by the deceased spouse.