The old adage “what's mine is yours and what's yours is mine” is particularly true for spouses located in community property states. News of the L.A. Lakers star Kobe Bryant’s divorce reminds us how important it is to know whether or not you are located in a community property state and to plan properly if you are.
As a reminder, community property states are states that regard all property acquired during a marriage, except for gifts or inheritances, as being owned jointly by both spouses, regardless of who earned or bought the property during the marriage. As such, in a divorce, both spouses are entitled to half of the community property. It is reported that Kobe Bryant and his wife did not sign a prenuptial agreement, meaning that Mrs. Bryant will likely receive half of the millions Kobe Bryant earned during their marriage.1
Whenever high net worth individuals divorce, it is often asked whether they had a prenuptial agreement. When the answer is “no,” too many times we hear “should’ve, would’ve, could’ve.” As I previously wrote in my post on prenups, it is understandable that most people do not commit to marriage thinking they will get divorced and therefore, do not execute a prenuptial agreement to protect certain assets. However, as a simple reminder to individuals, note whether you are located in a community property state, and if so, be proactive in protecting assets in case of divorce.