Community Property
by Takara Alexis

Community property is a type of joint property ownership that stipulates property obtained during a marriage is jointly owned by both the husband and the wife. When a divorce, annulment, or death happens, all property is divided among the two parties. Community property is considered to be any property that's bought with money earned by either spouse during the marriage.

Not all property that is owned by the spouses is considered community property. Some property is kept separate and called "separate property." Separate property can become so commingled in the marriage that it can't be separated any more. In a case like this, separate property instantly turns into community property.

The specific community property laws in each state vary, but they all generally state that property obtained during the marriage is owned by both couples and is divided between the parties in a divorce, annulment, or death. There may be a few differences, for example, as to how much ownership both parties have involving the property depending on their contribution in its acquisition.

In estate planning, it's important to know which property is considered community property and which is considered separate property. That way you understand which property is controlled by your will. Unless the decedent's will states otherwise, half the community property will be transferred to the surviving spouse.

In community property states, the way property is titled doesn't change the community property laws governing property. For example, a property purchased during the marriage may be titled to only one of the spouses, but in a divorce, annulment, or death, the court would treat the property as if it had been titled to each spouse.

When the decedent's dictates the property go to someone besides the surviving spouse, those directions supersede the community property laws in that state. Some laws might take into consideration spouses and children from prior marriages before dividing community property after a death. If you have specific desires for what should happen to your property in the event of a death, it is important to have a will that details your wishes.