Community property law is recognized in the following states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Any community property laws stated in this article should be considered applicable only in community property states.
Community property is a form of joint ownership between married couples which specifies that all money, personal property, and real property accumulated by either spouse during marriage is owned equally by both spouses. Each spouse owns a one-half, undivided interest in the community property, regardless of his or her individual contribution to the community property. Community property ownership applies even if the acquired property contains only one spouse’s name on the title of ownership.
Separate property may be owned by each spouse if the property was acquired before marriage or was acquired by gift or inheritance during marriage. If separate property is commingled with community property to the extent its identity cannot be traced, the commingled property becomes community property. Community property can be converted to separate property if one spouse gives or sells his or her half interest to the other spouse.
Community property ownership is terminated in the event of divorce. Even though community property is owned equally during marriage, the community property may or may not be divided equally in divorce. In some states, a court of law decides the division of community property if the divorcing spouses cannot reach a division agreement. A premarital or postmarital agreement can also help define the division of community property in the event of divorce.
In the event one spouse dies, only one-half of the community property is included in that spouse’s estate. The deceased spouse’s one-half of the community property can be inherited by the surviving spouse or someone other than the surviving spouse; there is no automatic right to survivorship. If a spouse wishes to leave some or all of his or her one-half of the community property to someone other than the surviving spouse, that spouse should elect such in a beneficiary designation or last will and testament. If a spouse dies without a will, intestate succession laws provide for the community property to be inherited by the surviving spouse in most cases.
Sources: legal-dictionary.thefreedictionary.com, family.findlaw.com, wills.about.com, http://www.texasbar.com/
