How Community Property Laws May Affect You


In eight states, community proper laws dictate how property ownership is handled following a divorce or with an inheritance. Those states, including California, comprise approximately one in four Americans, thus you may be affected at some point. Here is what you need to know about community property and the information that accompanies it.

Merely Defined

Matrimony goes beyond the vows and man and woman make. Specifically, it represents a contractual agreement that can have a profound effect on the offspring, personal property and financial affairs. Consequently, couples should consider their vows as sacred with serious repercussions resulting from the dissolution of the union.


In community property states which, incidentally, also encompass Idaho, Louisiana, Washington, New Mexico, Nevada, Texas and Wisconsin, a married couple’s joint property includes the following three areas:

1. Income procured by either person while married. Namely, funds earned on the job, through a business or by means of investing would be included here.

2. Both real or personal property amassed along with monies earned during wedlock. In particular, this would be the home that you share, the car that you drive and even the dog that you both love.

3. Indebtedness amassed while married.  Inclusive of credit cards, mortgages and home improvement loans would be attached here.

Truly, couples living in community property states should be cognizant of one salient fact: everything that the couples owe or own, whether attained or consumed separately or jointly, are usually commingled. Namely houses, cars, stock, securities, investments, automobiles, appliances, jewelry and furniture are what embodies community property.

Property Enumeration

Not all property in community property states can be attached. The exclusions are enumerated as follows:

First, any and all property owned by a spouse prior to matrimony. Specifically, a house, condominium, apartment or other dwelling purchased before you exchanged your vows.

Second, property procured by a spouse after legal separation. For example, your spouse buys a condominium to reside in while your marriage is in the process of dissolution.

Third, gift or inheritance property received by a spouse during matrimony from a third party. A proviso here is that the property remains sundered, as in a joint bank account. Furthermore, debts acquired before marriage also remain separate. For example, student loans, car loans and credit card indebtedness are not conjoined. Couples should know that property owned by one spouse before the marriage will be subject to community property rules after the fact if the new spouse’s name is added to the deed.

If a marital union is separated, then the property is uniformly split between the two individuals. Specifically, this extends to property that some might consider extraneous to wedlock, such as a business or a retirement plan. Namely, a 401k plan that you have treasured may soon be split evenly with your spouse. Moreover, you may be responsible for paying whatever taxes are incurred at withdrawal. See your tax accountant to learn more advises the Griffith, Young & Lass law firm.

Additional Considerations

There are other clauses and codicils to community property laws that should be examined by couples for their respective states. For example, you should know that the decease of one spouse typically transfers the assets to the surviving spouse. Yet, if there are children involved from a previous marriage or some other legally binding arrangement is in place, such as a prenuptial agreement, then other considerations may weigh in.

Spouses who are living separately should know that they may be affected by community property rules, even if they do not dwell in an affected state. For example, you may live in Utah and your spouse in Idaho. If a divorce is filed by your spouse, then Idaho’s community property rules could affect you. Your divorce attorney can assist you if and when community property becomes an issue for you.

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