Community Property in United States

Community Property Definition

Property acquired during the existence of the matrimonial relation, which in some states (Louisiana, Texas, New Mexico, Arizona, California, Idaho, and Washington) belongs equally to the spouses. The doctrine is of Spanish origin. See Schmidt, Civ. Law, p. 28; White, New Recop. p. 60. The husband, as head of the community (q.v.), has control of the property during the existence of the marriage relation (101 Cal. 563; 3 Wash. 592); but on dissolution of the community by death or divorce, it is divided equally between the parties (63 Cal. 77) ; the testamentary power of the deceased spouse being limited to the testator’s moiety. 18 Cal. 291. [1]

Plain-English Law

Community Property as defined by Nolo’s Encyclopedia of Everyday Law (p. 437-455): A method used in some states to define the ownership of property acquired and the responsibility for debts incurred during marriage. In states with community property laws, all earnings during marriage and all property acquired with those earnings are considered community property that belongs equally to each spouse. Likewise, all debts incurred during marriage are community property debts.

Practical Information

Note: Some of this information was last updated in 1982

In some states a system exists whereby all earnings of either husband or wife constitute a common fund of the husband and wife. The property is known as community property. The central idea of the system is the same in all states where community property exists, but statutes and judicial decisions have directed the development of the system along different lines in the various states. For example, in some states only property that is acquired by the exertion or labor of either party is common, whereas in other states income from separate property is also considered community property. Generally, either husband or wife may have “separate” property, such as that belonging to either of them at the time of marriage, real estate acquired in a state that does not recognize community property, or property given to or inherited by either at any time. Property acquired in exchange for separate property is separate property; that acquired for community property is community property. In some states the husband may dispose of, or encumber, the community property, but the wife may not; nor may the community property be attached for the wife’s debts, except for those contracted for necessities for herself and her children. In states having community property laws, a separation agreement (in U.S. law) should provide for the disposition of community property with sufficient exactness to avoid the implication that the question of division remains unsettled.

In community property states, the prevailing rule at the death of a spouse is that the half belonging to that spouse descends to his or her heirs, except when it has been disposed of by WILL.

To correct the inequalities in tax treatment between residents of community property states and residents of noncommunity property states, the federal government passed statutes allowing joint income tax (in U.S. law) returns, and a marital deduction (in U.S. law) for the federal estate tax (in U.S. law) and gift tax (in U.S. law).

(Revised by Ann De Vries)

What is Community Property?

For a meaning of it, read Community Property in the Legal Dictionary here. Browse and search more U.S. and international free legal definitions and legal terms related to Community Property.

In Divorce

In community property states, property that is acquired by the husband and wife during their marriage belongs to both. Property that was owned by either spouse prior to the marriage is their separate property. However, if separate property becomes commingled with community property it can become community property. For example, where husband and wife combine bank accounts when they get married the amount each had in the accounts before they were married will cease to be separate property. A spouse can acquire separate property during their marriage if the property is given to that spouse as a gift or inheritance.

Community Property Topic

The Community Property subject offers an examination of the classification of property, its management and control, and its distribution upon dissolution of the community according to US state law (including California law).

Community Property (Estate Property Distribution)

This section introduces, discusses and describes the basics of community property. Then, cross references and a brief overview about Estate Property Distribution is provided. Finally, the subject of Liquidations in relation with community property is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Resources

Notes

1. This definition of Community Property is based on The Cyclopedic Law Dictionary.

Community Property