Based on the notes in bold below, answer part a & b of question 1.

1a) TRUE OR FALSE Property distribution of the marital estate to the divorcing couple is determined by Federal law.

1b) TRUE OR FALSE Property distribution laws are based on either community property or equitable distribution laws based on where the couple files their divorce

Property Rules Differ in Various States: The forensic accountant should also be familiar with the methods used in his or her state to determine asset distribution. Two general bodies of state laws govern the distribution of property upon marital dissolution: community property and equitable distribution. n eight States,1 the distribution of property upon dissolution of marriage is a fairly simple and straightforward matter in most cases: all assets and income acquired during the marriage, regardless of which spouse's labors (personal efforts but not capital) went into producing or acquiring them, are divided equally between the spouse . These community property states (mostly historically influenced by the Spanish) view a married couple as being one economic unit, with each fulfilling a role in essence equal to the other. So there is no question that the fruits of the labors of each spouse belong equally to the unit. There are exceptions, however, notably for assets acquired by inheritance or gift or brought into the marriage. These are all considered to be nonmarital (also known as separate) assets. As was touched on in chapter 1, though nonmarital assets might not be counted in determining a party's property rights, there may be an exception, particularly involving small businesses or rental property, when separate assets have appreciated as the result of work (per anal efforts) performed by one party during the marriage, which would require that some part of the appreciation be considered a marital (community) asset.