Separate Property Agreements

     Under Louisiana Law, absent a specific contract, Louisiana will impose a community property system which will automatically apply to people who are married and domiciled in Louisiana. For people living out of state who move to Louisiana after they are married, the community property regime will apply from the moment that a spouse acquires a domicile in Louisiana. Under Louisiana Law, all assets held by a married couple are presumed to be community property, but it is clear that separate property includes assets that a person owned prior to their marriage, assets acquired by inheritance or donation to such person individually, and assets acquired with separate funds. Further, the fruits of the “fruits and products” of separate property are also deemed to be community property. For example, a client who had a $100,000 CD prior to their marriage would be able to maintain that CD as their separate property as long as it is traceable. However, absent an agreement as detailed below, the interest on that CD would be considered community property.

     The client wishes to alter these rules, they can do so either by a separate property agreement or through the use of a reservation of separate fruits. A separate property agreement is a contract entered into between the two parties that stipulate that they do not wish to have a community property regime. If this agreement is done prior to the marriage, there is no court oversight required, and it is critical that each intended spouse have separate legal representation, and that the agreement be finalized well in advance of the marriage. However, a married couple can still enter into a separate property regime after they are married, but this requires court approval.

     Finally, the parties to a marriage can agree to reserve the quote “fruits and products” of their separate property as separate property. This can be accomplished through a reservation of fruits, products and revenues (also referred to as an Act of Paraphernality), in which case a spouse can specifically protect the income of their separate assets as separate property. Under a recent legislative change, it is now required that the other spouse be notified when one spouse signs the reservation of separate fruits.