Types of Property Ownership - Community Property

There are several types of property ownership.  Most of the southwest and western states are known as Community Property states.  Community property is a type of ownership that is exclusively for spouses. Each spouse is considered to have contributed and owns 50% of the property acquired during marriage. Community property cannot be divided without the consent of both spouses.  Additionally, all income earned by either spouse is considered to be generated equally by both spouses.  For example, if only one spouse works and makes $100,000 per year, both spouses are considered to have contributed $50,000 to the pool of money. Either spouse can own property separately. But, in most cases it must be inherited, received as a gift or acquired before marriage.       

Curiously, community property does not have an automatic right of survivorship. Meaning that if one spouse dies, the surviving spouse does not automatically inherit the deceased spouse’s half.  The property must go through probate.  If the decedent does not have a will, Texans have a will prepared by the State. The State provided will  has a provision that allocates the decedent’s separate personal and real property as well as the decedent’s share of community property.    If you are uncomfortable with the state provided will, then you should consider having a will prepared for you.

The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

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