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The Ins and Outs of Community Property Law
-
Jun 2006
While only eight states observe community property laws, there's still a good chance this affects you. That's because 25% of the American population lives in one of these community property states. So perk up your ears if you're a resident of Arizona, California, Idaho, Nevada, New Mexico, Texas, Louisiana, Wisconsin or Washington.
Community property touches everything from personal property ownership to debt to divorce and inheritance. That's why understanding the ins and outs of community property law is essential. You can arm yourself with the information that will help you understand property distribution in your state.
Defining Community Property
Community property is everything a husband and wife own together. This typically includes all money earned, debts incurred and property acquired during the marriage.
Community property states classify the following as a married couple's joint property:
1. Any income received by either spouse during the marriage.
2. Any real or personal property acquired with income earned during the marriage. This includes vehicles, homes, furniture, appliances and luxury items.
3. Any debts acquired during the marriage.
Under community property, spouses own - and owe - everything equally, regardless of who earns or spends the income.
What Stays Separate in a Community Property State
Broadly, separate property in a community property state includes:
1. All property owned by a spouse prior to marriage.
2. Property obtained by a spouse after a legal separation.
3. Any property received as a gift or inheritance during the marriage from a third party (as long as this property remains separate from community property, such as joint banking accounts).
Also, pre-marriage debts remain separate property. For example, educational loans acquired before a marriage wouldn't become community property.
But separate property can transform into community property. For example, if a spouse who owns property before the marriage adds the new spouse's name to the deed, that home becomes community property.
Divorce: When Unity Leaves Community
Rising divorce rates make community property division a reality as joint property becomes separate again. Community property laws rule in divorce court, splitting assets 50/50.
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. These include everything from debt and asset division to child and spousal support. Uncontested divorces require a level of communication many divorcing couples can't achieve. However, they do allow for a level of customization not recognized by community property laws.
Death and Community Property
In non-community property states, laws prevent spouses from disinheriting their other halves. Most states allow a surviving spouse to receive a minimum of one half or one third of any property.
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.
The Spread of Community Property
Community property laws don't just apply to couples living in one of the eight designated community property states. If one spouse lives or owns property in a community property state, those rules could determine your future. And Wisconsin, while not officially a community property state, has laws so favorable to married couples that it verges on community property status.
Like most laws, community property has its critics and defenders. How people perceive it often hinges on where they're standing. But whether you see community property as a savior or a hindrance, being informed is the best defense.
Most Viewed in Divorce
Comments
Submitted by on Mar 3, 2010 - 6:07PM
Momma,
Something I found on Community Property. I'm not sure why Rosanne thought my house would affect Eli at all.
Submitted by on Jun 14, 2010 - 12:44PM
I'd like to know when exactly community property stops being a community property in divotce?
I mean, when complaint is filed? or when answer is filed? or when divorce is over?
Thanks
Submitted by on Jul 21, 2010 - 11:06AM
Hello, and thanks for a great question. Unfortunately, we can't advise you about the specifics of community property. If you'd like to search for an attorney to advise you, please refer to http://attorneyconnect.legalzoom.com. If you'd like to learn more about the divorce documents we offer, certainly give us a call at 800.962.7490 or send us an email (psinfo@legalzoom.com).
Submitted by on Aug 27, 2010 - 12:27PM
I printed out a Community Property Agreement for Washington state and can no longer find the form I need. It is for one for a husband and wife. Can you help me find th eform. It is perfect for what I need. I dated it the day I printed it and did not get it notarized that day and so I need to create a new one to take to the notary today.
I can find lots for divorces and pre-nuptials, but not the one for married spouses.
Thanks for your help in advance.
Submitted by on Dec 21, 2010 - 1:10AM
Does the community property law apply to single people living together?
Submitted by on Jan 7, 2011 - 11:28AM
Hello thanks for your question! Do keep in mind that LegalZoom is not a law firm and cannot provide legal advice regarding community property laws. However, we can help you find an attorney to give you information on community property laws. Please refer to http://attorneyconnect.legalzoom.com to search for an affordable attorney in your area.
Submitted by on May 15, 2012 - 4:09PM
If I lived with someone in texas for four years to date and we split does community property laws affecr me?thank yo
Submitted by on May 25, 2012 - 8:25AM
Hi Delores - Thank you for contacting LegalZoom! While we make creating legal documents easy and affordable, we unfortunately cannot give specific legal advice on whether you would be subject to community property laws. However, feel free to get free legal advice on the LegalZoom Facebook page every Tuesday and Friday. Check out Free Joe: http://zoo.mn/FreeJoe.
Submitted by on Jan 19, 2011 - 6:23PM
How does inherited real estate (FARM) in a community property state apply to estate planning for residents of a non-community property state when decedent has natural children by first spouse, step children by second spouse, and no children by surviving spouse? If mortgage is taken on property by decedent during marriage does Farm change from inherited property to community property?
Submitted by on Feb 3, 2011 - 2:17PM
Upon Death of a spouse does the Community Property Law become null and void.?
Submitted by on Feb 14, 2011 - 9:52PM
Friend's husband died, and had cashed in all insurance, and run up bills unknown to his spouse. At age 78, is she going to have to pay all his bills?
Submitted by on Feb 28, 2011 - 10:57AM
Are proceeds from the sale of inherited real estate considered community ptoperty in divorce settlement?
Submitted by on Mar 4, 2011 - 5:08PM
Hi Richard, this is a really great question. While we do offer divorce services, we are unable to comment on this matter as states have different laws that surround community property. We can help you find an attorney to assist you in this matter. Please refer to our attorney referral network: http://attorneyconnect.legalzoom.com
Submitted by on Jan 29, 2012 - 9:29PM
We live in Idaho and are contemplating divorce. As the wife would I be entitiled to the inherited real estate from my father-in-law?
Submitted by on Feb 21, 2012 - 12:03PM
Thanks for contacting LegalZoom. LegalZoom makes creating legal documents easy and affordable, but since we're not a law firm, we can't give specific legal advice regarding what your wife would be entitled to receive. However, you can get free legal advice on the LegalZoom Facebook page every Friday and Tuesday. Check out Free Joe: http://zoo.mn/FreeJoe.
Submitted by on Mar 26, 2011 - 7:00AM
I wanted to know if you have the forms for a legal separation for the state of North Carolina
Submitted by on Apr 22, 2011 - 4:54PM
Hi Beverly, thanks for contacting LegalZoom. Unfortunately, at this time we do not offer legal separation documents. If you would like help finding an attorney to help you prepare this type of document, please refer to http://attorneyconnect.legalzoom.com.
Submitted by on May 11, 2011 - 5:22PM
Do you have the forms?????? If so, how much do you charge for them.
Thank you for a speedy reply, if possible.
Joyce
Submitted by on Apr 18, 2011 - 6:27PM
I've owned my home for 9 years now. I recently got married approximately 7 months ago. How does this affect my home. I'm not planning on addin his name to my deed or anything and I still pay my mortgage on my own to keep things simple. Is my husband able to get any proceeds if I sell my home?
Submitted by on Apr 23, 2011 - 7:43PM
My wife of 29 years did in March. She bought a new car a little over a year ago and my name is not on any papers on the loan. In fact I didn't know what she paid for the car until I found the papers after her death. As it turns out, she is upside down on the car, she owes $4000 more than the car is worth. I can't afford the payments and I am considering to just let it go back. Will I be held liable for the difference?
Submitted by on May 4, 2011 - 1:20PM
Hi Randy, we are sorry to hear of your loss and extend our deepest condolences. We'd love to help but because we are not a law firm, we are unable to advise you on this matter. However, we can help you find an attorney that might be able to answer your questions. Please visit: http://attorneyconnect.legalzoom.com
Submitted by on May 29, 2011 - 2:21PM
Is there a time limit on suing for my part of 401k in a divorce.
Submitted by on Jun 23, 2011 - 7:45AM
Hi, this is definitely a great question. Since we are not a law firm, we are unable to give you any legal advice regarding this matter. We do offer free legal advice on the LegalZoom Facebook page every Friday. Check out Free Joe Friday: http://zoo.mn/FreeJoe.
Submitted by on Aug 20, 2011 - 2:13PM
I was wondering if I bought a house before we were married and it is in my name, but we moved in it together does that make it community property
Submitted by on Oct 10, 2011 - 10:05AM
Hi, thanks for the question. LegalZoom makes creating legal documents easy and affordable, but we unfortunately cannot give specific legal advice regarding community property. Feel free to contact your local county court for more advice or you can get free legal advice on the LegalZoom Facebook page every Tuesday and Friday. Check out Free Joe: http://zoo.mn/FreeJoe.
Submitted by on Aug 31, 2011 - 10:29AM
Can a spouse purchase real estate without his/her partner and deem it as his/her separate property during a marriage? In other words, can a spouse keep his/her partner off of the title with no ownership rights?
Submitted by on Aug 31, 2011 - 10:30AM
If she buys a home with only her name on the title, is the property separate or is it still community property?
Submitted by on Jan 16, 2012 - 9:15AM
I recently got a DVRO against my wife and her son. She is now out of the home and I am left to pay the bills. Can I hold an estate sale to sell items in the home that were acquired during the marriage to pay the bills? I am planning on filing for divorce. I had to sell both of my cars and most of my personal belongings to pay earlier bills. She took the only car when she was escorted from house by police. The value of the car is around $4000. Does that mean I get $4000 worth of items in the household? I just want out of this nightmare, sell the house and contents and go separate ways.
Thanks,
Steve Baker
Submitted by on Feb 16, 2012 - 7:23AM
Hi Steve. We are sincerely sorry to hear of your situation. While our specialty is legal documents, not legal advice, we have a great way for you to connect to local attorneys to discuss your rights. Feel free to visit https://www.legalzoom.com/attorneys-lawyers/legal-plans/personal.html for more details about our Legal Advantage Plus plan!
Submitted by on Jan 19, 2012 - 1:16PM
My sister owned land in california prior to being married.It was paid for.She got married and had allowed her spouse to build on that land.They are now getting divorced and he is trying to take everything with only paying her minimally. She also supported both of them during the 3 years of marriage as he only worked on the house. Can she force removal of the house from her property?
Submitted by on Feb 16, 2012 - 7:49AM
Hi Joe--Thanks for contacting LegalZoom. LegalZoom makes creating legal documents easy and affordable, but since we're not a law firm, we can't give specific legal advice regarding your sister's house. However, you can get free legal advice on the LegalZoom Facebook page every Friday and Tuesday. Check out Free Joe: http://zoo.mn/FreeJoe.
Submitted by on Jan 26, 2012 - 3:07PM
my husband is about to start a new business funding it with his 401k plan. the business will actually be operated out of his 401k plan. we have been married for 33 years. i know his 401k plan is community property (Louisiana) but is the company he is about to start also community property as well and in case of divorce would he have to buy me out of the company?
Submitted by on Feb 1, 2012 - 7:21PM
can my wife keep our truck in her boyfriends garage and not let me use it if only her name is on the title but i bought it after we were married we are getting devorced papers are filed
Submitted by on Feb 22, 2012 - 8:54AM
While our specialty is legal documents, not legal advice, we have a great way for you to connect to local attorneys to discuss your options regarding your truck and divorce. Feel free to visit https://www.legalzoom.com/attorneys-lawyers/legal-plans/personal.html for more details on our Legal Advantage Plus Plan!
Submitted by on Feb 28, 2012 - 11:05PM
How long do you have to be married in order for community property to apply?
Submitted by on Apr 18, 2012 - 7:18AM
Thank you for contacting LegalZoom. While we make creating legal documents easy and affordable, we can't give specific legal advice regarding community property. However, we may be able to help you find an attorney who can assist you through our Legal Advantage Plus plan! Please visit https://www.legalzoom.com/attorneys-lawyers/legal-plans/personal.html for more details.
Submitted by on Apr 19, 2012 - 12:17PM
I want to give an oil and gas royalty interest to one of my sons. Do you have a deed of gift form to accomplish this?
Submitted by on May 10, 2012 - 12:59PM
Thank you for contacting LegalZoom. While we make creating legal documents easy and affordable, we do not offer a deed of gift form. However, we may be able to help you find an attorney who can assist you through our Legal Advantage Plus plan! Please visit https://www.legalzoom.com/attorneys-lawyers/legal-plans/personal.html for more details.
Submitted by on Jul 2, 2012 - 12:18PM
My spouse of 25 years, passed away in February,in California. I was out of the state at the time and was not able to get back for another 2 weeks, during that time his daughter, my stepdaughter, became the "Informant" for the coroners office, and listed him as being divorced. Then she was able to take the vehicle (that was supposed to be for me to get around)and showed the DMV the death certificate that stated he was divorced and was able to register the vehicle in another state in her name. She has also been able to have his ashes released to herself and any personal effects. What recourse do I have. My best friend is gone and I have nothing to remember him by.
Submitted by on Jul 13, 2012 - 2:05PM
Thank you for contacting LegalZoom. We are sincerely sorry to hear of what you are experiencing. While we make creating legal documents easy and affordable, we cannot offer specific legal advice regarding this situation. However, we may be able to help you find an attorney who can assist and advise you through our Legal Advantage Plus plan! Please visit https://www.legalzoom.com/attorneys-lawyers/legal-plans/personal.html for more details.
Submitted by on Aug 31, 2012 - 11:03AM
I live in arizona and I was sued for a community property debt that was given to my ex husband in our roperty settlement agreement. they have now begun garnishing my wages because he filed for Bankruptcy. my question is since I am remarried and Arizona is a community property state how can they legally take from my current husbands community, ( my wages are technically his).
Submitted by on Dec 5, 2012 - 9:15AM
If you are married, and family member donated a large sum of money for you to buy house, and it is documented, if years later there is divorce, will other spouse be in titled to donated gift amt.? Or does community property start after that donated amt.?
Submitted by on Dec 27, 2012 - 6:58PM
About 2 years ago I got into a accident with a cyclists. I was riding my motorbike (which was not insured) neithe one of us saw each other. The cyclists was taken to the hospital, had a broken leg ec.Today I got served with papers from him for damages. Can he sue me for my personal assests (joint with my wife? Can he go after my home personal property etc? I live in Wisconsin and am nervous that he will go after all we own. This really was an accident and he even knows that. Can I Transfer My Assets to My Wife if I'm Getting Sued? Please, if you could answer my questions I would appreciate it very much. Thank you!
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