Do I Live In A Community Property State?

Holding title to real property as Community Property is a type of ownership available to married couples only. There are currently nine states which offer Community Property status. These states are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. The “marital property act” defined Wisconsin as a community-property state, but individual circumstances will dictate how this act is interpreted.

The property laws in these nine states look at property purchased during a marriage as community property and both husband and wife have an equal right to possess the property during their marriage. In some states, upon the death of either spouse, the surviving spouse automatically receives half of the community property. With community property, neither spouse may sell his or her own share. To transfer the property to someone else, both husband and wife must sign the deed. When one spouse dies and leaves no will, the surviving spouse may acquire the property, but unlike joint tenancy, either spouse may will his half interest to others if he or she so chooses.

Community property laws may become complex, especially when dividing up assets upon a dissolution of the marriage. You may have heard of the divorced couple in which the ex husband filed for his share of the proceeds of the lottery winnings of his former wife. Apparently, his wife had won the lottery, while they were still married, and failed to tell her husband of her winnings. They then divorced and the wife did not reveal these lottery winnings as assets at the time of the dissolution. The husband found out some time later, filed for his share in court, and was awarded the full amount of the lottery money. This occurred in a Community Property state, where all assets of a married couple acquired during the marriage are considered “community property.”

Domestic partnerships may be interpreted as legally married couples in some states or counties. Those jurisdictions would then consider any property that was acquired by either partner before their “marriage” be considered as “separate property,” and will be entitled to keep all of that property after separation. The courts would have the right to distribute the rest of the property based on the equity interest that each partner has in relation to it.

If you have any doubts as to Community Property law in you state, you may want to consult with an attorney to be certain what the implications are of holding title as community property.