Property Division

New Mexico is a community property state. This is significant because most states are NOT a community property state. That means that if you get information from your friend in another state you may be receiving wrong information. That is why it’s important to understand some basic aspects of property division in New Mexico.

In the simplest terms, community property is any and all property acquired during marriage. Conversely, separate property is any and all property acquired before marriage. Likewise, community debts and separate debts are defined as to whether they were acquired before or during marriage. These simplistic rules sound easy enough, but in reality they offer many pitfalls and challenges.

For example, consider a couple who marries. The wife sells her house that she had before marriage and uses that money to buy a house with their new husband during marriage. Is the new house community property? Well the house was acquired during marriage so it technically is community property, but the money for the down payment on the community property was money from the wife’s separate property (money from an asset acquired before marriage). In such a situation the house is community property but may have a separate property lien on it from the wife whereby the wife is paid back her down payment (or some form of it) first before anything else is divided from the house. This complication among many others makes community property/separate property challenging.

Another common occurrence arises from what is known as transmutation. That is property that clearly took it’s form at the time it was obtained (ie: separate) but later, through the acts of the parties, changed into another form of property. Thus, that same wife, instead of selling her house, moves her new husband into the house. She adds his name to the deed. They pay the mortgage together, claim it on joint taxes and make a will intending to leave it to each other upon death. Such actions may transmute the wife’s separate property to community property.

These property issues often cause a lot of confusion and lots of money to parties. Don’t be caught without knowing your rights when it comes to property issues. Contact the property experts at Justice Legal Group by calling us throughout New Mexico at 505-880-8737 or email us at info@JusticeLegalGroup.com.