A Quick Guide to Community Property

A Quick Guide to Community Property

A Quick Guide to Community Property
In order to be eligible for community property, which is a form of property ownership, the two persons involved must live in a community property state. There are only ten states in the United States that allow community property. The term refers to a property that is gained (in ownership) by either the husband or a wife during a marriage, therefore, becoming community property belonging equally to both spouses. 
This does not constitute all the property gained by them as community property, however. The property that is left individually owned by either spouse is known as separate property. In turn, any separate party that becomes interacted with by both parties may eventually become a community property.
The states that allow community property whether by default or contract are: Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Each state has a varying set of community property laws, however, they all base off the principle that most property obtained during marriage can become community property. 
In the case of an annulment, a divorce, or death of a spouse, the property will be divided equally. In the case of division, the property will be divided in items by half, or can also be divided by the value of items, usually a fifty/fifty split. California has a set law that all community property must be divided equally at a fifty/fifty split, and cannot be challenged. The only things kept out of this would be those that are titled as separate property. In recent years, some of the states that allow same sex unions offer community property laws to the parties in these unions.
Community property generally does not include any gifts or inherited properties. These are seen as solely separate property belonging individually to each respective spouse, and can be left behind or distributed accordingly to that person's wishes upon death. It is important, when preparing a person's estate through a lawyer, to determine very carefully what is considered to be community property as opposed to separate property. This can help clarify the property to be distributed in a will at the time of death, and make the process much smoother for relatives. 
One of the reasons that community property isn't widely accepted among other states, is due to the fact that due to high rates of divorce, couples like to maintain some property and assets separate from the spouse in the unfortunate event a divorce is inevitable. They also like to keep some sort of independent control over certain property and assets. These things considered, along with other cons, can represent the reason for the unpopularity of community property law's existence in many states. 




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