Community Property
What Is Community Property?
Community property alludes to a U.S. state-level legal differentiation that assigns a married individual's assets. Any income and any real or personal property acquired by one or the other spouse during a marriage are viewed as community property and hence have a place with the two partners of the marriage. Under community property, spouses own (and owe) everything similarly, paying little heed to who acquires or spends the income.
Community property is otherwise called marital property.
Figuring out Community Property
In community property jurisdictions, every spouse in a marriage is considered to possess a share of the marital assets, including any financial or real assets acquired during the marriage. In certain jurisdictions, for example, California, community property is separated rigorously in half, with every spouse getting half of any assets found to be marital property. In different jurisdictions, for example, Texas, a judge might decide to partition assets in any denomination that they consider equitable to the two spouses.
Generally, gifts to, and inherited assets of, one spouse are not viewed as community property. Assets acquired before the marriage are not viewed as community property (albeit in certain jurisdictions, these assets can be commuted to community property). Obligations acquired during the marriage can be viewed as community property.
For instance, a IRA for the sake of an individual with a spouse, accumulated over the span of a marriage, would be viewed as community property. Generally, the spouse of the retirement account owner who dwells in a community or marital property state must be the sole primary beneficiary of an investment account designated as marital property, except if the spouse gives written consent to have another person designated as the primary beneficiary of the retirement account.
The concept of community property exists to safeguard spousal rights. It originated in Spanish law, a system of civil law derived from Roman civil law and the Visigothic Code. It perceives that the two spouses add to a marriage in various ways, and considers the two contributions financially equivalent under the law.
For instance, community property considers the contribution of a breadwinning spouse who accommodates the family and a homemaking spouse who cares for children and manages the household as equivalent by granting the two spouses a share of the marital property, even however the homemaking spouse might not have brought financial or different assets into the marriage.
In the United States, nine states have community property laws:
- California
- Arizona
- Nevada
- Louisiana
- Idaho
- New Mexico
- Washington
- Texas
- Wisconsin
The Frozen North has a discretionary community property system, wherein spouses might consent to hold some or all marital property in common by making a community property trust or community property agreement. Tennessee and South Dakota have comparable systems.
Features
- In a community property jurisdiction, any income and any real or personal property acquired by one or the other spouse during a marriage are viewed as community property, and consequently, have a place with the two partners of the marriage.
- Under community property, spouses own (and owe) everything similarly, paying little mind to who acquires or spends the income.
- Community property alludes to a U.S. state-level legal qualification that assigns a married individual's assets.
- In the United States, nine states have community property laws: California, Arizona, Nevada, Louisiana, Idaho, New Mexico, Washington, Texas, and Wisconsin.
